Rent Banks: An Innovative Strategy in a Time of Crisis

Posted on April 22, 2020
By Christine Hadekel
new westminster

As the economic toll of COVID-19 continues to deepen across Canada, Canadian renters are facing an unprecedented housing crisis. Many have lost their jobs and are worried about keeping a roof over their head in the months ahead. While renters wait for federal and provincial relief programs to come into full effect, local rent banks are ramping up their efforts to support low-income households that are no longer able to pay their rent or utilities.

Most rent bank clients live below the poverty line and spend more than 50 per cent of their income on housing. With minimal savings, they are very vulnerable to housing instability during unforeseen events such as the medical emergencies and layoffs. Rent banks are an innovative strategy that prevent people from falling into homelessness when faced with an unexpected financial crisis like the one we are seeing now.  Rent banks create housing stability through providing financial assistance in the form of repayable short-term loans for rent, utilities, and damage deposits. Many rent bank programs also provide financial literacy classes, mediation between tenants and landlords, and referrals to agencies that can help with food, clothing, and transportation.

Local governments play a key role in ensuring the development, growth and sustainability of rent banks by contributing resources and expertise. In the 2019, the provincial government in BC provided $10 million to the Vancity Community Foundation to develop a province-wide rent bank system. Currently, the BC Rent Bank provides support to 10 rent banks across the province including rent banks in Vancouver, New Westminster, and Kamloops. In 2018-19, rent banks in BC granted 206 short-term loans to households at risk of eviction. A research project which evaluated the impact of the Kamloops Rent Bank found there was high client satisfaction, high loan repayment, and all clients were still housed one year after receiving their loan.

Since the onset of COVID-19, the BC Rent Bank has been working with rent banks across the province to increase their capacity to serve more communities. New Westminster’s Rent Bank has expanded its service area to Burnaby to provide support to families facing financial difficulties. The rent bank program has enhanced loan capacity to support more residents to access the program and developed interim loan recovery terms to allow for flexibility for the duration of the COVID-19 pandemic.

Take your learning further:

Poverty Reduction, Cities Reducing Poverty, Housing, British Columbia, Christine Hadekel

Christine Hadekel

By Christine Hadekel

Christine joined Tamarack as a Manager of Cities with the Vibrant Communities – Cities Deepening Community team. Her previous work has taken her across the globe where she has worked with community leaders, policymakers, funders, and researchers to catalyze cross-sectoral poverty reduction and food security initiatives.

Related Posts