Giving people $1,000 in 'emergency cash' could prevent homelessness

For people on the brink of losing it all, cash can be a lifesaver.

That's according to a study published in the August 2016 issue of Science, which found giving the near-homeless roughly $1,000 in "emergency cash" substantially reduced the chances they would end up on the street - over both the short and long term.

Researchers from Notre Dame University, who carried out the study, say the findings provide an important insight for helping millions of people remain dignified, independent members of society.

"Policymakers and housing experts have long debated how best to address the persistent problem of homelessness in the United States," James Sullivan, Notre Dame economist and study co-author, said in a statement. "Our study shows that not only do targeted prevention programs work, but they also can save the community money."

Each year, cities spend tens of thousands of dollars to keep homeless people alive. In New York City, where there are more than 62,000 homeless people, the city spends millions each year to put them up in publicly-funded hotel rooms and offer health-related services.

The new study explores what happens when cities invest in prevention rather than treatment. Sullivan and his colleagues explored the impact of financial assistance for 4,500 people and families in Chicago who called the Homelessness Prevention Call Center between 2010 and 2012.

The HPCC is a hotline people can call if they feel they're right on the brink of becoming homeless and need emergency cash. Though many qualify, not all will receive funding, due to the HPCC's limited resources.

Sullivan and his team compared outcomes for people who received money from the HPCC - an average of around $1,000 - and those who did not, despite qualifying for it. Researchers found people who received money were 88% less likely to become homeless in three months and 76% less likely in six months. Even over a two-year period, people were less likely to end up on the street.

The findings seem to reinforce what other research has found - namely, that people in poverty seem to be keenly aware how extra money could improve their circumstances. That outcome has been found repeatedly in developing countries throughout Africa, though the data on low-income pockets of the US is still pretty light.

However, there is plenty of evidence that giving the homeless a place to live improves their wellbeing and longer-term outcomes. In Utah, for instance, chronic homelessness has been nearly eradicated - mostly because the state decided to give people houses.

"If you want to end homelessness, you put people in housing," Gordon Walker, the director of the state Housing and Community Development Division, told The Washington Post. "This is relatively simple."

The latest data from the Notre Dame Study suggests poverty works exactly the same way.