Sacramento Rent Fund Just Another Name for Basic Income

Sacramento Rent Fund Just Another Name for Basic Income

Last week, I wrote about a controversial plan in the City of Stockton to essentially hand a selected group of people wads of cash each month to do nothing.  Under this universal basic income scheme, they wouldn’t have to work or adhere to some milestone to be eligible for the money.

The Stockton proposal has received national attention as a way to address high poverty rates, temporary disruption caused by innovation, and rising housing costs.

Clearly, Sacramento city leaders were listening when Stockton Mayor Michael Tubbs was in town recently to promote his plan.

The City of Sacramento has been battling a homeless problem that is growing worse by the day, along with rising housing costs due to the city’s inability to build enough supply to keep up with the demand.

Faced with the prospect of both a statewide and local push to expand rent control (which he opposes), Mayor Darrell Steinberg is proposing his own plan to hand out cash to people.

Earlier this year, he told Sacramento’s Fox 40 News that he wants to create a so-called “rent stabilization fund”, which would “provide up to $1,000 to people who are facing eviction because of an unexpected expense . . . some examples (of which) would be an emergency car repair payment or medical injury . . .”

Consider this a form of basic income in Sacramento for those who are about to be evicted.

Unlike the Stockton proposal, there would be some verification under Sacramento’s plan.  Steinberg says, “the idea of having a pot of money, it would have to be verified of course, where you could give somebody that one shot that would help with what they need.”

The money would come from city and federal funds, from a temporary half-cent tax increase (that Steinberg hopes to make permanent with a one-cent sales tax increase measure on the November ballot), plus potentially private donations, too.  More details will come next month when Steinberg formally announces his plan.

Many Sacramentans and Californians live from paycheck to paycheck each month.  I’m sure they’d love some free money to help them pay the rent or the mortgage.  But just handing out free cash to someone about to be evicted isn’t the way to help them or address our housing and poverty problems.

Sure, the extra $1,000 may help them one month, but what will happen the next month?  They’ll likely be right back on the edge of being evicted.  Will Steinberg say no when they come looking for cash again?  Probably not.

Just as we recommended to Mayor Tubbs, Steinberg should instead embrace free-market policies in Sacramento so we can attract more private sector jobs and industries of the future that pay better wages.  We also need to reform our schools so those teetering on the edge financially can get the training they need to get a better paying job or start their own business and gain some financial stability.

To make lower housing costs, any hurdles standing in the way of building more housing supply in California’s capitol city must be removed.  There’s plenty of land in the Sacramento region to build lots of housing.  Government policies just make it too costly and complex to build.  More housing supply means more housing affordability.

Steinberg is well-intentioned in his efforts.  But handing out cash to people struggling to pay the rent will inevitably make them more dependent on the government and that’s not a good thing for Sacramento or its hard-working taxpayers.

Tim Anaya is communications director for the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.