Programs that provide emergency financial assistance to households at-risk of eviction due to rental or mortgage arrears, or a sudden inability to pay rent, exist globally. ‘Rent Banks’ (as we call them in Canada) are an important homelessness prevention strategy when people face evictions, or are at imminent risk of losing their housing due to structural/systems failures. In different jurisdictions, these programs' eligibility, governance and funding vary widely. Our team gathered evidence on a wide range of models found internationally to determine what works best for keeping people housed, including across Canada, the US, and Wales. In this blog, we share some initial learnings from Canada and Wales.
Different Program Models for Keeping Households from Eviction
When structural forms of eviction prevention such as social housing and tenant protections fail, emergency financial assistance programs, or ‘rent banks’, step in to administer funds to keep people housed. Rent banks are becoming increasingly important. Due to the rising cost of housing, more households are at-risk of homelessness.
While their general purpose remains the same, emergency financial assistance takes different forms and names globally:
- Rent banks: this is the term used in Canada, generally to indicate a pool of funds available through a social service provider or a municipality (occasionally a province/territory) to assist with a households’ rent arrears or inability to pay rent when they are at risk of eviction. They operate on both loan and grant models.
- Eviction Diversion/Emergency Rental Assistance Funds/Homelessness Prevention and Housing Stability Services/Rent Relief: in the United States and Australia, more large-scale emergency financial assistance programs have been introduced either permanently or temporarily (especially in the context of COVID) by the federal or state governments. These programs are more top-down in their funding structures but are often still administered by social service providers and can be loans or grants.
- Legislative: in certain jurisdictions, such as Italy, emergency financial assistance can be administered as a legislative consequence once a landlord has filed for eviction or there has been an eviction ruling. This assistance is generally from public funds.
Case Studies
We gathered evidence on how these programs operate by meeting with different emergency financial assistance service providers in Canada, the United States and the United Kingdom. The examples below highlight how certain factors can impact the interventions available to households at risk of eviction. These factors include the political context, the funder, eligibility criteria, and the type of assistance provided (whether it's a loan or a grant). Ultimately, these factors influence how service providers view the effectiveness of a rent bank intervention. Below we provide two examples from Toronto, Canada and Wales, UK:
Toronto, Canada
The Toronto Rent Bank is funded by the City of Toronto and is administered through a central organization and community partners across the Greater Toronto Area. It began as an interest-free loan program (tenants repaid the rent bank over time) but was transformed into a grant program during COVID-19. The rent bank is an emergency measure for households who can pay their rent normally but are in a temporary financial crisis or are in rental arrears. It offers grants up to $4,000 every year.
The rules and eligibility criteria are set out by the City of Toronto and the Rent Bank; application of these criteria is at the service-provider level. Notably, the Toronto Rent Bank does not provide assistance to people receiving social assistance.
Wales, United Kingdom
The Housing Wales Act 2014 is the country’s structural homelessness prevention framework (often referred to as “Duty to Assist”). This act frames the Welsh emergency financial assistance programs in a larger effort to prevent homelessness.
Discretionary Housing Payments are an emergency measure for households who can pay their rent normally but are in a temporary financial crisis (households must be “working” toward stabilizing their housing situation). Funds are provided and administered by local councils. Amounts allocated to households depend on regional council funds for the program and individual household need.
The program has rigid criteria for eligibility. For example, it can only be accessed by those living in Council (government-funded social service provider) housing or private rental market. Further, households must also already be accessing the Housing Benefit (Wales).
Wales also had the now discontinued Homeless Prevention Grant. It was provided by the Welsh government and was administered by the councils. It had flexible eligibility criteria, and funds were administered to anyone accepted for the program by the council. Funds were used to support “prevention” whether it be arrears, emergency repairs to a building, etc.
As indicated in the Housing Wales Act, neither of these programs can operate as a grant; only loans may be administered to households at-risk of eviction.
Promising Practices
Through meetings with service providers in Canada and the UK, we found that certain features contributed to the efficiency of keeping households housed:
- Careful consideration of loan versus grant program models: loans require households to pay back money they probably do not have, but they contribute to the longevity of the rent bank (the more money that is paid back to the rent bank, the more households benefit from the rent bank). Grants require a significant investment as the money is not paid back to the program.
- Wrap-around services: many households benefit from psychosocial support as well as interventions in financial planning and legal education.
- Balance between frontline discretion/flexible programming and strong governance structure and eligibility criteria: eligibility criteria need to be clear and impartial, but service providers also need to be able to adapt programming to the evolving and unique needs of service users in their community. Governance needs to consider programming that promotes long-term housing stability.
- Permanent funding models: continuous public funding is essential to ensure that no eligible applicants are turned away.
- Straightforward application processes: individuals who need to access a rent bank are clear how it works and what they need to provide.
- Streamlined and open discussions between funder/governance structure and service provider.
- There is a recognition that targeted interventions must be accompanied with broader and more structural solutions, including strengthening tenant protections and increasing affordable housing supply, notably through the development of non-market housing.
Our research team is using the information we gather globally to develop an evidence base for promising practices of emergency rental assistance programs. Equipped with these promising practices, we hope to inform future rent bank models for successful interventions that keep individuals and families housed.
Hannah Brais is the research coordinator at the Old Brewery Mission, Quebec’s largest homeless service provider.
Alison Smith is an associate professor in the Department of Political Science at the University of Toronto.
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This post is part of our #CAEH23 blog series which highlights research on preventing and ending homelessness that is being presented at the 2023 National Conference on Ending Homelessness, November 8-10 in Halifax, NS. Learn more about the authors’ work through their presentation in the "Learning from New Approaches to Homelessness and Housing Support" session.
References
- Dej, Erin, Stephen Gaetz, and Kaitlin Schwan. 2020. “Turning off the Tap: A Typology for Homelessness Prevention.” The Journal of Primary Prevention 41: 397–412.
- Hanratty, Maria. 2017. “Do Local Economic Conditions Affect Homelessness? Impact of Area Housing Market Factors, Unemployment, and Poverty on Community Homeless Rates.” Housing Policy Debate 27 (4): 640–55. https://doi.org/10.1080/10511482.2017.1282885.
- Kenna, Padraic, Sergio Nasarre-Aznar, Peter Sparkes, and Christoph U Schmid. 2018. Loss of Homes and Evictions Across Europe: A Comparative Legal and Policy Examination. Edward Elgar Publishing.