In 2012, one in every 135 homes in Stockton, California, was in foreclosure and the city was in bankruptcy protection. Although the area’s housing market is certainly now in recovery mode, local officials believe that many residents still need something extra to help them make ends meet. As a result, the city will be the first in the United States to debut a pilot Universal Basic Income (UBI) program that will give 100 Stockton residents $500 a month for 18 months starting in 2019.
“The goal is to create an income floor no one will fall beneath,” explained CNN Money. Residents who qualify for the funding will receive it with no strings attached, including work requirements or spending parameters.
Stockton has a Large Population Living in Poverty
With about a quarter of the entire population of the city living in poverty, proponents of the program suggest that a broad-scale UBI program could help residents afford basic housing or other necessities. Median income is just over $49,000, far below the national median of $57,617.
Stockton mayor Michael Tubbs explained, “We have a bunch of folks starting off life already behind, born into communities that don’t have a lot of opportunity…. I want Stockton to be [a place people] want to live in.” Tubbs added he fears many of his constituents could be replaced by “the looming threat of automation,” which is another reason he supports the UBI concept.
UBI Will Affect the Real Estate Market
Whether you think UBI is a great idea, a terrible one, or you just aren’t entirely sure, you can be confident of one thing: UBI will, if adopted on a large scale, affect the local housing markets where it is offered. Whether this occurs in the form of a new type of housing that appeals to UBI recipients or more general effects stemming from the impact of UBI on the local economy remains to be seen. The Stockton program is intended to generate data to help address policy questions about UBI, and it will likely provide, on a micro level, insight into how such a policy will affect housing and the economy as well.