Rent banks, a financial safety net designed to assist renters facing eviction due to financial challenges, play a crucial role in preventing homelessness, according to research conducted by Alison Smith, an associate professor of political science at the University of Toronto Mississauga. While not a comprehensive solution to the housing crisis, rent banks offer significant short-term relief, allowing individuals to overcome immediate financial hurdles.
In her research project, “Rent Banks as a Tool of Eviction Prevention: A comparative study of rent banks in Canada and Europe,” supported by a Connaught New Researcher Award, Smith delves into the effectiveness of rent banks in averting homelessness. The study examines rent bank programs across Canada and Europe, engaging with service providers to gain valuable insights into their impact.
“Rent banks are an important intervention for the people who it is designed for,” says Smith, who collaborates with colleagues from McGill University and research managers at Montreal’s Old Brewery Mission emergency shelter.
Smith’s research reveals that rent banks serve as a valuable intervention for renters needing a short-term reprieve, allowing them time to stabilize their financial situation, whether through finding a new roommate or securing a higher-paying job. The consequences of eviction, Smith emphasizes, can have long-lasting effects on housing stability, particularly in a challenging market where finding equivalent housing in terms of cost and quality becomes increasingly difficult.
However, Smith’s findings also uncover certain downsides to rent banks. In some jurisdictions, tenants may only access a rent bank once every two years, proving insufficient if they encounter financial difficulties within that time frame. Additionally, while rent banks address immediate needs, they may function as a temporary fix to a broader, systemic issue. Emergency interventions, especially amidst escalating rents, risk diverting funding from more sustainable long-term solutions, such as investing in purpose-built rentals and non-market housing units.
“I think it’s a real challenge that housing providers and advocates are really confronted with,” says Smith. “They are trying to balance the very real emergency needs and crises that people are living in. They want the current moment to be stable for people, but that is very expensive.”
In Ontario, rent banks are typically administered by local governments or non-profits, offering financial support to landlords on behalf of tenants, covering rent arrears or providing emergency funds for households facing sudden financial strain. Smith highlights variations in these programs, such as the provision of grants in Ontario versus loans in other provinces like Manitoba, which tenants must repay.
The Connaught New Researcher Award is enabling Smith’s team to extend their exploration to rent banks in Europe, aiming to draw comparisons with the Canadian context. Ultimately, Smith aspires to leverage her research to assist the Old Brewery Mission, Quebec’s largest emergency shelter and service provider, in establishing a pilot rent bank to proactively prevent homelessness.
“It would be so innovative for an emergency shelter to be working intensively on prevention. It would be an interesting shift,” remarks Smith, emphasizing the potential for positive change through a more proactive approach to housing challenges.
