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Testing whether cash transfers alleviate housing insecurity

SIEPR Faculty Fellow Adrienne Sabety is conducting an innovative experiment to see whether a cash assistance program for unhoused people will help alleviate homelessness.

Of the more than half a million unhoused people in the United States, 30 percent of them reside in California. And on any given night, more than 31,000 people are living in shelters or on the streets in the San Francisco Bay Area — a 6.2 percent increase over the last two years.

Those who are experiencing housing insecurity in this country are overrepresented by Blacks and indigenous people, including Native Americans and Pacific Islanders, according to the latest figures by the U.S. Department of Housing and Urban Development. People who identify as Black, for example, make up just 12 percent of the U.S. total population but comprise 37 percent of all people experiencing homelessness.

Those who have experienced homelessness typically have worse health outcomes due to lack of timely and appropriate health care, diminished access to mental health services and living in unsanitary conditions. They are sometimes subject to violence, assault and other trauma—and children in families with housing instability are more likely to have low birth weights and chronic physical and mental disorders as they get older.

Further, the life expectancy gap between the richest and poorest 1 percent of Americans is 12.4 years.

Stanford’s Adrienne Sabety, a health economist who examines social determinants of health, is conducting a novel experiment to quantify the importance of two key structural factors driving health disparities: housing and economic instability.

“What drives these disparities and how can we shrink them?” asks Sabety, an assistant professor of health policy at the Stanford School of Medicine. Sabety is also a faculty fellow at the Stanford Institute for Economic Policy Research (SIEPR) and a core faculty member at Stanford Health Policy.

She is part of a team of academic researchers and Bay Area homelessness experts conducting a bold experiment to see if giving unhoused individuals and families unrestricted and unconditional cash assistance — known in the public policy world as unconditional cash transfers — will alleviate homelessness in the region in an impactful way.

“It’s an ambitious undertaking, especially given its scale,” said Sabety, who intends to raise $8 million for the three-year project. Her team was recently awarded a Stanford Impact Lab grant of nearly $858,000. They are continuing to raise funds to support as big a study as possible to maximize impact.

Health Currency

The project, Health Currency, is in partnership with Abode Services, a Fremont-based organization that has been working to help unhoused people in the Bay Area since 1989. They will randomly give 1,100 households 12 monthly, unconditional payments on reloadable, no-fee debit cards. The payments will total $13,000 for individuals and $16,000 for households with children over the same 12-month window. Families will receive on average $1,333 a month. A large innovation of Health Currency is that it targets individuals exiting Abode’s Rapid Rehousing Program, giving individuals cash when they face a housing cliff.

“At the individual level, we anticipate increased access to primary and behavioral health care, improvements in mental health and reduced hospitalizations and emergency services,” Sabety said, adding they also expect to see an uptick in families getting health care of their children.

Abode has secured the support of government agencies and departments across the five counties that will be served by the project: Alameda, Santa Clara, San Mateo, San Francisco and Santa Cruz.

Sabety, who has a PhD in health policy, has advised congressional staffers on how to structure financial bailouts to hospitals under the emergency COVID-19 Cares Act. She designed and raised $3 million for a 14-month study with the Department of Health and Mental Hygiene in New York City examining barriers to accessing health care for uninsured, undocumented immigrants.

There is a huge demand for research on the effect of unconditional cash transfers in America, Sabety said. She believes Health Currency will be the first to quantify the impact of unconditional cash transfers on health care utilization among recently unhoused adults and the children.

“Health Currency builds on the existing body of work by focusing on a novel suite of outcomes and creating an intervention that gives policymakers, researchers and practitioners a practical way to embed unconditional cash transfers into the existing safety net,” she said.

This story was originally published Aug. 22 by Stanford Health Policy.