Across Canada, access to stable secure housing continues to be one of the most difficult issues people face. Stable, secure housing is understood to be one of the most basic elements for well being with many calling for Canada to formally recognize housing as a human right. For vulnerable people, the current housing crisis is dire and solutions are desperately needed. Youth exiting government care, lone low income parents of young children are amongst the demographics of tenants who frequently face disproportionate challenge in access to housing particularly when transitioning from supportive housing to the private rental market.
Through the support of a Vancouver Foundation Fostering Change grant, Ready to Rent BC, in partnership with Aunt Leah’s Place, is concluding research of the use of risk mitigation funds. Also referred to as Landlord Guarantee Funds, these funds essentially provide landlords with a 3rd party financial guarantee in the event a tenant causes damage above the amount of a security deposit or when tenancy is at risk due to arrears. These funds are put in place to support tenants who are likely to be viewed as high risk by landlords when applying for housing.
For example, young people who have no rental experience are often required to have a guarantor to access housing. For youth exiting care and other vulnerable youth, they often do not have that support. This fund would act as that guarantor.
Our research, literature review and interviews found that risk mitigation funds are growing in use across the United States. Primarily backed by municipal funding, the risk mitigation funds have an established track record of success particularly when combined with tenant education. RentWell in Oregon operates a state wide centrally run Landlord Guarantee Fund available to 800 eligible tenants a year, each of whom have completed a 15 hour tenant education course. Research also shows that the perceived risk is rarely realized and while some claims are made, they few and far between allowing funds to roll over and become available again.
To date there are no equivalent examples in Canada though several Housing First programs utilize operating funds to pay primarily for damages and move out expenses. Our research shows this is scaleable model that would compliment Ready to Rent’s RentSmart education and the supportive housing sector.