In a recent report published by CTV News Vancouver, more than 23,000 people in British Columbia were at one point homeless in 2019 and the most recent homelessness count from 2020/21 shows that hundreds of children in British Columbia do not have homes. It’s anticipated that the figure is much higher as many children may not have been counted.
There are a multitude of factors which influence the rate of homelessness in a city. The homelessness crisis in British Columbia is a reflection of people struggling with poverty, mental health conditions in which there is a significant gap in services, seniors on fixed income, First Nations, foster youth aging out of care and people with drug addictions as well as the lack of supply of affordable housing for those with low incomes.
There are many assumptions and misconceptions as well as varying political opinions about how to eliminate the homelessness crisis in British Columbia. However, a new study sheds light and challenges the status-quo of traditional methods implemented by charitable organizations.
In the new study conducted at the University of British Columbia, Dr. Jiaying Zhao, associate professor of UBC’s department of psychology and Institute for Resources, Environment and Sustainability discovered that giving money directly to homeless people in Vancouver, British Columbia, was far more beneficial than donating the funds to charitable organizations.
This challenges a common assumption that many people have about homelessness and their ability to manage their own financial affairs.
The study found that after giving money directly to 50 homeless individuals, the individuals found housing faster, secured food and even reduced their spending on substances such as alcohol and drugs. More importantly, the results of the study showed that a cash transfer of $7,500 to each homeless person allowed each person to obtain stable housing more efficiently. They retained $1,000 more in savings over the year and achieved food security sooner than the control group who received no direct cash transfers.
More importantly, the study demonstrated that from a cost-benefit analysis, the homeless person receiving the $7,500 cash transfer led to a savings of $8,172 per year from reduced reliance on the shelter system (which equates to a net savings of $672 per person per year or $405,000 yearly cost savings to the shelter system in total). In other words, the direct cash transfer approach is more cost effective and has the potential to save the government and taxpayers significant funds while effectively helping to eliminate homelessness.
This study was supported by Foundations for Social Change who hopes to expand their project to other cities in Canada. We commend their work and research in adopting science and hope their work will lead to changes in how the government addresses homelessness in Canada.