A look at the BC Rent Bank, the first of its kind in Canada

The bank provides interest-free loans to help low or moderate-income earners, including post-secondary students

Art by Kristen Frier

Art by Kristen Frier

British Columbians pay some of the highest rent prices in the country, with Vancouver consistently being listed as the most expensive city to live in for the past five years. 

On average, experts say people should spend between 25 to 30 per cent of their income on rent and utilities. However, with the living wage in Metro Vancouver being $20.52 and the provincial minimum wage being $15.20, it can pose challenges for people in the working class and post-secondary students to get ahead or live comfortably. 

According to the Canadian Rental Housing Index, 38 per cent of people between the ages of 15 to 29 pay more than 30 per cent of their income on rent and utilities, with 15 per cent paying over 50 per cent of their income. With renters paying a large portion of their income on rent, it can cause individuals to make difficult choices between buying food or paying rent on time. Last year, a study from the University of British Columbia found that the province has the highest eviction rate in the country, with more than 10 per cent of renters reporting having been evicted from their homes.

To respond to these challenges, B.C. became the first province in Canada to have a rent bank that provides 100 per cent rent coverage loans to those experiencing financial hardships so they don’t have to worry about losing their home. The BC Rent Bank, a project of the Vancity Community Foundation with seven locations in the Metro Vancouver area, now offers services across the entire province. The loan can be directed towards an individual’s rent, utilities, or a first month’s rent deposit for those who have secured housing but can’t meet the lease requirements. 

Melissa Giles, project lead for the BC Rent Bank, says she has seen an “astronomical” growth in applications. 

In a typical month, she says the bank sees roughly 240 to 270 pre-assessments. After posting a press release on their website, she saw the number climb to over 900 applications in November of last year tripling their daily applications after only one day of the bank being available province-wide. 

“Between November and the first week in December, we’ve received almost 1,200 pre-assessments, and this whole year we’ve received 3,600,” says Giles.

“I think that demonstrates the need that’s within the province. People have not fully financially recovered yet from the pandemic, so they’re still needing support to keep their housing.” 

To qualify for the interest-free loan, applicants must be 19 or older, be a current resident of the province or be moving to B.C., and provide documents such as their current tenancy agreement, three months of bank statements, and two pieces of ID. Applicants can apply online through the BC Rent Bank website.  

Out of the applications Giles and the BC Rent Bank caseworkers have gone through, Giles has seen people from all walks of life, including post-secondary students. She says it’s often students who are beginning their post-secondary studies. 

“They underestimated the cost to get themselves going. So moving onto campus or moving to start school, plus all of those first expenses,” she says. “They end up in a situation where money is a bit tighter than they expected.” 

“One of the dynamics for students to consider is the level of debt that they’re carrying,” says Giles. 

She adds that it’s important for students to consider their level of income and if they can pay for a monthly loan while also covering the cost of their studies.

“We’re really trying to provide an alternative that people [don’t have to] go into places like Payday Loans or Money Mart, where they’re going to pay really high interest on their loans.” 

In Surrey, the average monthly cost of living as a single person is $1,205 before rent, according to the Metro Vancouver Home Source. For post-secondary students, it can vary before including tuition, textbooks, and other expenses. 

“When you’re feeling desperate about your situation, you need solutions. But you aren’t able to think about the long-term implications in those moments because your stress level is so high. If you don’t see another avenue in front of you, of course you’re going to choose an option like that, because everybody needs a safe place to live,” says Giles.

“Until we have longer term solutions in place to address those issues, we do need those interim solutions.”

Andrey Pavlov, a finance instructor at Simon Fraser University, says although the BC Rent Bank program is effective in helping people, it is only a short-term solution to affordable housing. 

“I like it because it puts money in the hands of actual renters,” he says. “The longer-term solution is to increase housing supply of all shapes and forms so that rents are affordable to begin with.” 

He says the BC Rent Bank provides renters with the flexibility to choose where they live instead of needing to live in a specific area due to its affordability. 

“There are clear trade-offs between the quality of the accommodation itself, location, and price. We all consider those trade-offs and choose a housing package – location, space, and price, that fits our needs and preferences best,” Pavlov wrote in a follow-up email to The Runner

“When a government, provincial or municipal, tries to provide housing directly, they remove this flexibility and force people into solutions that may be far from optimal for them,” he said. 

Pavlov says the provincial and municipal governments typically will build modular housing units in certain areas throughout a city to help with affordable housing, which limits the areas people can live if they rely on affordable housing projects.

He says each modular unit costs over $140,000 just in construction and says that the government can invest the money it costs to build these units into affordable housing for everyone. 

“Basically we’re telling people, ‘Yeah sure, we can help you, but only if you live in the place we’re offering you and that’s it. If you don’t want to live there, want to live somewhere else, or use the money in different ways, you can’t do that.’” 

Pavlov adds that in order to move closer to housing affordability, we need to remove obstacles such as long development permitting processes, development taxes and fees, and artificial limits to available land. He says by eliminating these barriers, people who need help are more likely to receive it, and the housing market can provide the needed housing.

For now, Pavlov says rent banks offer the chance for people to get back on their feet and says he was happy to learn about this service.

“Rent banks are a good idea because it helps people who are normally doing okay and they’re just experiencing financial difficulties,” says Pavlov. “And then programs like Rent Bank can be limited to people who really experience difficulty, perhaps for other reasons, not because housing costs are so expensive.” 

Similar to housing unaffordability in the province, the pandemic has also created additional financial barriers for renters. To ease the strain, B.C. mandated a rent increase freeze throughout 2020 and 2021. However, on Jan. 1 the rent freeze expired, and the Residential Tenancy Branch announced the 2022 maximum rent increase to be 1.5 per cent, a decrease from 2.6 per cent in 2019. 

Penny Gurstein, an instructor in the school of community and regional planning and the director of the Housing Research Collaborative at the UBC, says she has noticed that the pandemic has heightened problems for renters.  

“Even before COVID, there was an undersupply of affordable rental housing, and so now with COVID, it’s been sort of exasperated,” she says. 

“Even though there’s been some change in short-term rentals, they’re turning some of their units into more permanent rentals, but the fact is that people just can’t afford the rents that they’re currently in.” 

For post-secondary students, the pandemic has increased housing instability for some. According to the B.C. Centre for Disease Control, this includes pushing them into homelessness due to financial strain from job loss and seeking alternative housing options such as “couch surfing” or temporary shelters due to many university residences no longer being available. 

“There just needs to be more affordable rental housing options for people. They’re building more rentals, but they’re not building more affordable rentals,” says Gurstein, who adds that post-secondary students are more vulnerable to unsuitable housing options.

“They are usually left to some of the most unsuitable kinds of housing and secondary suites that are not very well maintained. So [governments need to provide] some support for them, maybe give them more options about where they can live.” 

While in favour of programs like the BC Rent Bank, Gurstein says one of the problems she sees potentially arising is landlords raising the rent comparable to the support the renter receives, causing renters to have little to no money left after paying their rent still. 

However, Gurstein says the bank is a step in the right direction and that the province is leading the country by example. 

“B.C. has been an innovator in housing for a while,” says Gurstein. “They are recognizing this and we are one of the most unaffordable [provinces] right now in Canada.” 

“In the major cities like Vancouver, over half of the population since the 1970s have been renters, and there really hasn’t been much support to recognize that in terms of security in tenure,” she says.  

While the BC Rent Bank continues to see an increase in their applications, Giles says their hope is that rent banks don’t become a permanent fixture in society. 

“Then that means we’ve actually addressed the underlying cause.”