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In many communities across Canada, renters who can’t make their next payment have a safety net that can protect them from getting evicted: rent banks.

Rent banks are essentially pools of money available to people who are at risk of eviction due to financial difficulties. While not a solution to the housing crisis, they’re an important service that can prevent people from becoming homeless, according to research by Alison Smith, an associate professor of political science at the University of Toronto Mississauga.

Smith is exploring the role that rent banks can play in helping prevent homelessness through her research project, Rent Banks as a Tool of Eviction Prevention: A comparative study of rent banks in Canada and Europe. For her research, which is supported by a Connaught New Researcher Award, Smith is studying rent bank programs available to Canadians and speaking with service providers across the country.

“Rent banks are an important intervention for the people who it is designed for,” says Smith, who is collaborating with colleagues from McGill University as well as service providers and research managers at Montreal’s Old Brewery Mission emergency shelter.

Smith’s research shows that rent banks can help renters who need a month or two to get into a more stable position – whether that’s getting a new roommate, or a higher paying job. 

“If people are evicted, there are a lot of consequences for that, that will follow them for a long time,” Smith says. “In the event that people are being evicted for financial reasons, research shows that there’s a downward trend in housing stability. Especially in this market, somebody is not going to be able to find an equivalent place to live in terms of cost or quality if they are evicted.”

While rent banks can help tenants in the short term, Smith is discovering downsides. For example, in some jurisdictions, tenants can only access a rent bank once every two years, which doesn’t help if they run into financial trouble again within that time.  

Smith is also finding that rent banks might be a bandage solution to a larger, systemic problem. A risk of this kind of emergency intervention, especially amid rapidly rising rents, is that it may take funding away from other measures that could provide greater long-term benefit – for example, investing in more 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 usually administered by local governments or non-profits, who provide funding to the landlord on behalf of the tenant. This funding covers rent arrears or provides emergency financial support to households that are suddenly unable to pay their full rent one month. While these payments may be grants that don’t need to be repaid, programs in other provinces, like Manitoba, provide loans that the tenant must repay.

Smith says the Connaught New Researcher Award will help her team explore rent banks in Europe, and how they compare to Canada. Ultimately, she hopes to use her research to help Old Brewery Mission, the largest emergency shelter and service provider in Quebec, establish a pilot rent bank to help residents.

“It would be so innovative for an emergency shelter to be working intensively on prevention. It would be an interesting shift,” Smith said.