Salesforce CEO Marc Benioff and his wife, Lynne Benioff, are helping fund a pilot program in Oakland to pay some rent directly to the landlords of 200 households deemed most vulnerable to losing their homes, one of several taking a more targeted approach to housing aid in the face of much-needed affordable housing solutions.
The $3.4-million program will pay an average of $726 a month for 18 months to fill the gap to get the selected households’ income down to 50 percent of their housing costs. It will focus on tenants who have experienced homelessness in the past, make no more than 30 percent of the area median income, pay more than half their incomes towards housing costs and live in Oakland neighborhoods with high rates of gentrification.
The idea is not only to keep these families in their homes, but also to see if smaller, direct payments could be as effective as the more traditional federal housing vouchers that typically subsidize a larger portion of a household’s rental needs but are in notoriously short supply and not always accepted by landlords.
Benioff, who has advocated national adoption of a universal basic income to address income inequality and the impact of jobs lost to technology, in 2019 made the largest private donation to fund homelessness research. The UCSF Benioff Homelessness and Housing Initiative, created by the Salesforce CEO’s $30-million contribution, will evaluate the Oakland program’s effectiveness at keeping people in their homes.
“The world needs a North Star for truth on homelessness,’’ Benioff said at the time. The UCSF initiative “will be that North Star, providing the latest research, data and evidence-based solutions to ensure we’re investing in programs that will help solve the homelessness crisis.”
The “shallow subsidy” direct rent study will be a “proof point” that will “prevent and rapidly resolve homelessness in Oakland,” Oakland Mayor Libby Schaaf said in a press conference. It will “expand our homelessness response system,” she said, and hopefully lead to changes of the voucher system at the federal level.
The subsidies are one of many strategies being examined in a series of small pilot programs that hope to reduce the growing problem of homelessness in the Bay Area.
“Between 2017 and 2020, the Bay Area’s homeless population grew by 6,878 individuals to a total of 35,118—accounting for more than a quarter of the growth in the total U.S. homeless population,” according to a report by the Bay Area Council Economic Institute. “During that time, the share of the Bay Area’s homeless population without access to basic shelter increased from 67 percent to 73 percent, the highest rate in the U.S.”
While more affordable housing must be built, the think tank wrote, it also underlined just how difficult that is to do in one of the most expensive areas for land and construction costs in the country. It estimates that, as of 2018, the average unit of new or rehabilitated affordable housing in the Bay Area cost about $530,000.
In San Francisco, a single unit of subsidized affordable housing costs $730,000. In addition, it costs $36,000 a year to keep a person in a supportive housing unit in San Francisco, while the median cost for a skilled nursing bed is $149,650, according to the San Francisco Department of Disability and Aging Services and the city’s Department of Homelessness and Supportive Housing. For assisted living, it’s $73,200 a bed and emergency shelter can cost as much as $80,000 a year per bed.
Schaaf said that many of Oakland’s seniors and families are “one economic emergency away” from losing their housing and needing these expensive short-term solutions.
The city launched another pilot program called Keep Oakland Housed in 2018 to provide one-time emergency assistance payments to residents who make less than 30 percent of the area median income, or up to 50 percent for legal assistance with an active eviction. As of the end of 2020, Keep Oakland Housed reported that it had served nearly 5,000 households with $9 million in emergency financial assistance and $2.5 million in legal aid.
The city is also experimenting with a guaranteed income program called Oakland Resilient Families that gives East Oakland families $500 every month for 18 months to spend on whatever they need, not just housing. The first phase of the program began in June and serves 300 low-income households chosen at random; an additional 300 will be able to apply for phase two of the program soon. More than 9,000 people have subscribed to the program’s email notification list for the next round.
Oakland’s guaranteed income program was inspired by a similar one in Stockton, which was one of the first in the nation when it began in February 2019 and gave $500 a month for 24 months to 125 randomly selected low-income city recipients. There were no strings attached and no work requirements for the $3-million privately funded program. A report on its results found that people who received the payments were better able to find full-time jobs, pay emergency bills and had fewer incidences of depression and anxiety.
There are now more than 40 mayors nationwide who have signed on to look into starting basic income pilot programs in their communities, with Twitter founder Jack Dorsey donating $15 million to their efforts at the end of 2020.
Earlier this year, Governor Gavin Newsom signed a bill offering $35 million in funding to support current or future guaranteed income pilots. South San Francisco just launched one last week and they are already underway in Santa Clara County, Oakland, Marin County and San Francisco. Each program is slightly different—some might be for foster youth while others support pregnant women—but they all offer between $500 and $1,000 a month to low-income households to spend on whatever they see fit.
A Stockton grandmother of six named Mekie said she used money from the city’s guaranteed income program to make rent and car payments. She was also able to pay for her teenage son’s football camp and get him new shoes.
“Things got a little easier,” she said.