For months, Emmanuel Ofori-Attah had been feeling the financial squeeze of the pandemic.
The 31-year-old was working full-time in marketing and branding before COVID-19 hit last year, but since his work relied heavily on events, his income dried up when those stopped. And the majority of his monthly federal emergency benefit payments were eaten up by rent costs — $1,700 of the $2,000.
“When you’re a young, healthy, able-bodied person, when the ability to work is taken away from you, it’s very stressful,” he said. “You feel powerless … it’s the only thing that’s on your mind.”
That’s when he saw a poster in the lobby of his apartment, advertising a city-funded program offering interest-free loans to renters in a pinch. He called the number listed, and roughly a week later, $2,600 was transferred directly to his landlord — slightly more than a month and a half worth of rent.
Ofori-Attah is one of nearly 1,000 households last year who took advantage of the city-funded “Rent Bank” program after COVID-19 hit. While advocates and clients praised the program for offering quick help in dire circumstances, those who spoke to the Star noted the loans were only a temporary fix — and in a pandemic with no clear end in sight, they’re urging more fundamental and long-term measures.
More Torontonians flocked to the rent bank during the pandemic than before, with the number of households granted loans between March and December up 37 per cent from 2019 to 2020. While $1.8 million was loaned for rent, arrears and deposits in that 2019 period, preliminary city data shows $3.1 million in loans were granted between March and December last year.
The program is operated by the non-profit Neighbourhood Information Post with city funding; it can only be accessed by households paying market rent, who qualify as low-income but aren’t receiving social assistance.
Some kind of spike during COVID-19 was anticipated. The city padded the rent bank’s coffers with an extra $2 million last spring; increased the maximum loan for up to three months from $3,500 to $4,000; deferred repayments for up to a year; and slashed a rule about needing steady income moving forward.
Ofori-Attah said needing the loan was a “gut-check” for him, about setting more money aside in case of emergencies. He said the steep increase in use last year shows how many Toronto residents live without a financial safety net.
“For the last couple years, we’ve been talking about how personal household debt is rising, and I think now is a time to recognize that and make fundamental changes,” he said.
He urged officials to look at ways to reduce the cost of things like childcare. “This is not the kind of situation where you can say ‘just pull yourself up by your bootstraps, brown bag your lunch.’”
The city will evaluate the rent bank program this year, including considering whether it could provide grants instead of loans. A city report in November report noted that eliminating repayments for outstanding loans alone would mean forfeiting nearly $6 million. The city is currently facing a budget gap of nearly $1 billion for 2021.
Bahar Shadpour, a spokesperson for the Advocacy Centre for Tenants Ontario, believes a grant option could help tenants facing financial pressure. But she worries the rent bank won’t help those who might have fallen into deep arrears or deep debt. While arrears may show up through eviction processes, the amount of debt is harder to see, she said.
Both her organization and the Federation of Rental-Housing Providers of Ontario have been pushing for a residential rent relief program from the province.
L. Wysocki, who asked that his first name be omitted for privacy while discussing his past financial troubles, also turned to the rent bank during 2020.
As a restaurant server, his work also ground to a halt when the pandemic began, but Canada Emergency Response Benefit was enough to cover his $1,080 rent. He returned to work in June, but as cases climbed in the fall, his work tapered off.
He drained his bank account, then used a line of credit. “I used basically anything I had to pay the rent,” Wysocki said.
Finally, he turned to the rent bank, which he said he’d used many years ago, when he was injured and needed help with one month’s rent.
Within about 10 days, three months of rent was transferred to his landlord, he said. He’s grateful for the program and how quickly it helped him, but like Shadpour, he worries that the loans are only a temporary fix in a pandemic with no defined end date, during which renters may continue to struggle with payments.
Wysocki’s loan covers payments until the end of February. From there, he’s on his own to cover the monthly cost again.
“It’s only going to be a stopgap,” he said.
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