The Austin guaranteed income pilot tested how direct cash might help individuals and families with low incomes weather their unstable housing circumstances in some of the highest-poverty and most rapidly gentrifying neighborhoods in Austin, Texas. In September 2022, UpTogether and 10 community-based partners worked with the City of Austin’s Equity Office to enroll 135 households to receive $1,000 per month for one year.

Why This Matters

Direct cash transfer programs have grown in popularity across the US in recent years, with ongoing test pilots in more than 150 jurisdictions, from Birmingham to Minneapolis. As cash transfer pilots have grown, so has our understanding of the outcomes associated with them. Many proponents of direct cash consider it an efficient, equitable way to quickly get resources into the hands of people who need it, while also giving them agency over how they spend their money.

The Austin guaranteed income pilot was designed primarily to address housing precarity. Across the country, nearly 20 million renters are cost burdened. The Austin metropolitan area had the fastest-rising rents year over year as of early 2022. When households spend more than a third of their incomes on housing, that leaves limited capacity for other necessities such as transportation, groceries, health care, or saving for future needs. By disbursing cash to people experiencing housing instability, Austin policymakers hoped to better understand the role of direct cash in promoting housing stability for Austin residents. Based in part on the promising results of the program, the Austin City Council recently approved a new program to offer “family stabilization grants” to Austin residents who are housing insecure.

Key Takeaways

The research team found that participants applied their additional cash to the following goals and purposes:

• Participants’ most common goals for the cash payments were to achieve financial stability, stay healthy, support their families, and find stable housing, and around 83 percent of participants said that the cash helped them achieve their goals.
• Participants reported spending, on average, more than 50 percent of their pilot cash to cover financially burdensome housing costs. The average share participants spent on housing was more than twice as much as spending in any other category.
• Around 34 percent of participants reported using the cash for investments in their future, including financial investing, skills building, expanding their professional networks, and pursuing additional education.

Participants experienced the following outcomes:

• Participants’ housing security improved substantially over the course of the 12-month pilot, and positive outcomes continued to grow or were sustained after the cash disbursements ended. Six months after the pilot, the share of participants who reported being caught up on rent had increased by 19 percent over baseline, from 48 percent to 67 percent.
• Median household incomes increased overall over time, even six months after the pilot period ended. This outcome could be due to investments in upskilling and education.
• Although labor market participation did not change notably during the pilot period, 30 percent of participants said they had secured better employment or a higher salary.
• Mental health outcomes were mixed and changed over time. Participants’ mental health reached notable levels of improvement at six months into the one-year pilot, but six months after the pilot ended, more participants reported feeling anxious than before the pilot began.
• Although participant food security rates were highest at the end of the pilot, participants were still better off six months after the pilot than at baseline.

This evaluation brings forth several lessons to inform changes in implementation and policy for future cash transfer programs.

• Austin participants used their monthly cash allotments in a range of ways to solve housing, employment, and caregiving challenges at the same time. Such flexibility is a key advantage of direct cash since restrictive US safety net programs do not offer freedom of choice to participants.
• Even minor infusions of cash may connect recipients to other people in intriguing ways that lead to better outcomes for mental health, job quality, and housing stability. For example, some Austin participants reported using their extra cash to help others—either directly or as a volunteer—which, in turn, connected them to supportive friends or fruitful job contacts. This hypothesis deserves further study.
• More research is needed on how to minimize the stress of transition out of direct cash programs, as well as on the appropriate dose and duration of the cash transfer based on recipients’ circumstances and goals in relation to job attainment, housing stability, and long-term child well-being.

How We Did It

Our research methods included four surveys, including surveys at baseline and six months following the intervention; extensive participant and policymaker interviews; document review; and in-depth analysis of external data sources (including US Census Bureau Household Pulse Survey data) and participant social networks.