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Ripple of Change: Rent Bank, Momentum's innovative approach to housing challenges

The long-term impact of Momentum's "Rent Bank" from 1999 to 2010, an initiative designed to support affordable housing in Calgary.

  • Article
  • Community matters
  • Our impact

Thu Aug 31, 2023 by Momentum Staff

Momentum often tells stories of individual participants who, through programs, are building assets, achieving a sustainable livelihood, and creating the breathing room they need to be able to contribute to their community. A second, important component of our work is how we participate to make change happen at a systems level. These efforts don’t always have the impact we hope for, but when they do, they can positively change the lives of thousands of people. Our Ripples of Change series shines light on these longer-term, more complex stories of impact. This time we look at Rent Banks to address housing challenges.

A shortage of affordable housing. Almost zero rental vacancies. Rising levels of homelessness. Sound familiar? We’re talking about the housing squeeze of the late 1990s. For those living on lower incomes it was often a stretch to pay for both the security deposit and first month’s rent needed to move into a new rental.

In response, Momentum launched an initiative in 1999 to lend individuals the money they needed to put up the security deposit for their new home. Renters could more affordably get into rental housing and pay off the low-interest loan over time.

In 2005, homelessness was increasing in Calgary, so Momentum expanded the loan program for people who were struggling to pay rent or utilities. Momentum also collaborated with 10 community organizations who ensured that people who needed support to maintain their housing got connected to the Rent Bank program. An external evaluation of the Rent Bank demonstrated its effectiveness--70% of loan recipients maintained their housing up to one year after receiving the loan.

From 2005 to 2010, the Calgary Rent Bank provided almost 1,000 loans totaling over $640,000 to loan recipients with over 72% of the loans paid in full.

The launch of the Calgary 10 Year Plan to End Homelessness led to significant new rental supports, including a Homeless Eviction Prevention grant program. With grants now available, it no longer made sense to offer loans, especially to folks already struggling with high levels of consumer debt. After 10 years of operation, demand was on the decline. It was time to close the Rent Bank.

By openly sharing the story of the Calgary Rent Bank closure, two unexpected ripples occurred. First, Momentum was honored with a social innovation award from the Calgary Chamber of Voluntary Organizations (CCVO) -- and most importantly – the closure announcement resulted in inquiries from other communities interested in setting up their own rent bank programs.

Momentum responded to a community organization in British Columbia that wanted to launch a Rent Bank by providing training, loan policies, and stories of successes and challenges. The Rent Bank launched in 2010 in the Lower Mainland area and incorporated a key change in the program design—an openness to providing financial support through a mix of grants and loans. This change expanded eligibility and made the program more appropriate for folks struggling with both housing and high debt levels, which is a very common combination.

Based on the success of the model in the Fraser Valley and several other BC communities, the Vancity Community Foundation expanded the Rent Bank province-wide in 2021 with support the BC government. In 2022, the BC Rent Bank provided financial assistance to 1,112 households (746 loans, 288 grants and 78 grant/loan combos), which contributed to preventing over 2,200 people from being evicted or having their utilities disconnected.

A 2022 evaluation survey of the BC Rent Bank model demonstrates that the program worked to prevent homelessness – 94% of survey respondents maintained or improved their housing situation. The results indicate the significant social and economic impact of increasing housing stability. Prevention of a single eviction directly saves a tenant $2,932 and a landlord $8,663 according to research by Canada Mortgage and Housing Corporation.

The ripple effect of the BC Rent Bank program and the positive impact it has achieved is remarkable. Perhaps it is Calgary’s turn to learn from BC and explore whether an evolved Rent Bank could contribute to addressing the housing affordability facing Calgary today.

The Calgary Rent Bank program was funded collaboratively by the United Way of Calgary and Area, the Calgary Homeless Foundation, the federal government, and an anonymous donor.