• Oregon is giving some of its homeless youth $1,000 a month.
• The state’s DHS says recipients report spending money on housing and food.
• The program is among dozens nationwide trying to alleviate poverty with a guaranteed basic income.

Oregon has a severe homelessness problem.

It’s home to the third-worst homeless rate in the country, according to a federal count published in December. And it has the highest rate anywhere of unaccompanied homeless youth.

As state leaders scramble to address the problem, one solution is showing some promise: Give those young people $1,000 cash every month, no strings attached.

The Oregon Department of Human Services launched its Direct Cash Transfer Plus Pilot in February 2022. The program targets homeless people between 18 to 24 who have an “intention to become housed,” the DHS wrote last year in a report on youth homelessness in the state.

So far 120 young people across the state are receiving the direct cash payments, the report says. About 75 of the recipients are in Multnomah County, home to Portland. Initial payments for participants in the program started in February 2023 and are scheduled to run until January 2025.

Participants receive payments of $ 1,000 a month. They can also receive a one-time $3,000 “enrichment fund” payment. The program started implementing the larger payment after conversations with participants who said they still had “significant financial obstacles” after receiving initial payments from the program, the document says.

The only qualification for the program is to be a young person who is unhoused, though there are other factors — like being a member of the LGBTQ+ community — that can give applicants priority. There are no limits on how participants spend the money.

Recipients said they spent the funds mostly on housing, repairing vehicles, furniture, and moving costs, the DHS says.

While more than 65% of the participants said they were unhoused when the payments began, after six months about 63% of them said they had found housing, the report says. About 85% of recipients reported still needing “at least occasional assistance” with getting access to food.

Point Source Youth, a national nonprofit focused on addressing the problem of youth homelessness, partnered with the state to help design, plan, and structure the program. The nonprofit has helped with similar programs in other cities and states nationwide.

Anjala Huff, a senior director at the organization, told Business Insider that enrollees have been able to obtain housing, enroll in school, and purchase cars since receiving payments.

The program’s team has helped about two-thirds of the participants find housing. The goal is for the program to act as a sort of “housing intervention” that can be funded with public money in the future, Huff said.

“It’s not just about obtaining housing. We are helping to navigate creative housing conversations on how to maintain housing beyond enrollment in the program,” Huff told Business Insider. “After receiving the cash for one year, we are seeing youth who are interested in furthering their education to jump-start their careers.”

The program also helps the young participants with other strategies to ensure long-term housing, like reducing debt, sharing housing, finding higher paying jobs, and accessing community resources, Huff said.

Oregon lawmakers, meanwhile, are considering a bill that would provide 12 monthly payments of $1,000 to people who are experiencing homelessness, at risk of homelessness, severely rent-burdened, or earn at or below 60% percent of median area income.

Several other states and cities nationwide are experimenting with guaranteed basic income plans, which are different than universal basic income plans because they target specific groups of people, but are similar in that they are direct cash transfers with no limits on how recipients can spend it.

The Baltimore Young Families Success Fund, for example, gives young parents in the city $1,000 a month. Tonaeya Moore, director of policy of the CASH Campaign of Maryland, previously told BI that surveys suggest participants mostly spent their money on the same general necessities, such as housing and food.

In Denver, the city recently extended a basic income program offering some residents up to $1,000 a month after participants reported increased housing security. And researchers in Austin found that most participants in a similar program there spent most of their funds on food and housing.

Despite the apparent success of these small regional experiments, not everyone is on board. Lawmakers in Iowa, South Dakota, Arizona, and elsewhere have proposed bills that would prevent such programs from taking place.

In January, Texas state Sen. Paul Bettencourt sent a letter to the state’s attorney general asking him to declare unconstitutional a program in Harris County, which includes Houston, to give low-income residents $500 a month.