A California city is giving new parents $500 a month. It's one of a growing number of basic income pilots focused on families.

• Pomona is launching a basic income pilot for families with children under 4 years old.
• Funded by the American Rescue Plan Act, the pilot offers $500 monthly to 250 eligible families.
• New parents can spend the no-strings cash on housing, groceries, and childcare.

Babies are expensive: Formula, diapers, clothes, toys, frequent pediatrician check-ups, and a crib can cost new parents thousands of dollars — and that doesn't include childcare or household bills .

That's why city officials in Pomona, California — a city in LA county — are planning to offer guaranteed basic income to new parents. Beginning in August, 250 families with children under 4 years old will receive $500 a month for 18 months.

The basic income pilot — called Pomona Household Universal Grants Pilot Program — is run through the city and FORWARD, an organization that helps governments administer resources to their communities. Funding will largely come through President Joe Biden's American Rescue Plan Act .

Pomona's program mirrors over 100 basic income pilots across America. As an approach to poverty reduction , cities and counties have given low-income residents between $100 and $2,000 a month for a set time period. Participants can spend the money as they choose, with no strings attached. Like Pomona, a growing number of cities are choosing to direct the cash to financially-vulnerable families.

Along with having a baby or toddler, eligible families must meet at least one of the following criteria: have experienced a negative financial impact from the pandemic, live in a high rent-burdened area , be enrolled in federal safety nets like SNAP or Section 8 housing , or have an income at or below the median area income, which is $81,150 for a family of three. People who fit the income criteria and are currently pregnant can also be eligible.

The 250 families will be randomly selected from 600 eligible applicants, and the remaining 350 applicants will be placed in a control group so researchers can study the effects of the program. Throughout the 18 months, both groups will share their experience with researchers at the University of California, Los Angeles.

Mayor of Pomona, Tim Sandoval, told Business Insider in a statement that basic income allows the city to "extend a lifeline" to families during crucial developmental years.

"It provides parents with the stability and resources they need to create nurturing environments for their children, setting the stage for lifelong success and well-being," Sandoval said.

Pomona's GBI pilot joins others aimed at new parents

Pomona joins cities like Baltimore and St. Louis , which have directed basic income to young families. BI has heard from parents across the US who have received GBI, and some used the money to pay bills and secure stable housing , while others were able to afford groceries and childcare .

For example, low-income mothers of color based in Marin County, California received $1,000 a month between 2021 and 2023, and a 2024 extension of the program gave some families an additional $7,500. Participants reported using the money to pay rent, buy food, build savings, and pay off debt. During the pilot's run, the number of families with housing stability rose by 15%, and participants reported an 8% decline in homelessness.

Elsewhere in the US, Flint, Michigan's pilot called RxKids is currently offering basic income to all mothers with a baby born in 2024. New mothers receive a $1,500 lump sum and $500 a month during the first year of their baby's life.

These programs are in addition to other federal safety net programs geared toward families, like the Child Tax Credit , Temporary Assistance for Needy Families ( TANF ), and Women, Children and Infants ( WIC ) that provide aid to parents with young children.

Luke Shaefer, a co-director for RxKids and public policy professor at the University of Michigan, told BI that a family's household income often drops to its lowest point during a person's pregnancy or when their child is an infant, due to lost work hours.

"Combine that with the fact that a new child comes with all these added expenses: you're in a perfect storm of income dropping and expenses rising," Shaefer said.

He added that no-strings basic income can help families fill this earnings gap, and parents have the flexibility to spend the money "where it will help their kids the best."

Still, GBI research reflects short-term results. Some participants experience more housing and food security while receiving money, but it's not clear if families remain financially stable after the pilots end. Basic income continues to face political and legal opposition across the US, and not all policymakers agree that cash payments are a sustainable approach to poverty.

As Pomona looks toward its first GBI payments this summer, Sandoval is hopeful the money will support the city's "youngest residents," he said.

"It allows us to invest in the future of our community as a whole," he said.

Have you benefited from a guaranteed basic income program? Are you open to sharing how you spent the money? If so, reach out to this reporter at allisonkelly@businessinsider.com .