You make (3) sound like a bad thing but it's probably the most rational of the options, $1200 is enough to buy yourself some temporary escapism, not make rent.

Anything less than "UBI is a guaranteed for life amount that will cover rent, medical care, food, water, electricity, heat/ac, and internet" is going to skew the incentives to the point of uselessness.

Once you reach a point where you can simply exist for the rest of your life worry free is when you reap the benefits.