The Toronto rent bank supplied funds to help 1,744 financially stressed households avoid eviction during an 11-month pilot loan forgiveness period that came to an end March 31, 2022. City staff are now recommending a permanent transition from interest-free loans to a grants-based model, while continuing to collect some of the outstanding loans previously disbursed through the program.

A report prepared for City Council estimates the ongoing annual cost of this approach at roughly $4.8 to $6 million, of which the largest share would come from the recently launched provincial homelessness prevention program. Projected adequate funding for the next fiscal year has already been allocated in Toronto’s 2022 city budget.

“If Rent Bank issues the same number of grants in 2022 as it did during the pilot time period (May 1, 2021 to Mar 31, 2022), at the average payable amount of $2,747, it would cost the program $4.79 million. If Rent Bank sustains its Q1 2022 service levels throughout the 2022 year, it is projected to cost the program $5.94 million,” the report to City Council states.

The pilot was part of a package of enhanced relief measures introduced over the course of the COVID-19 pandemic. As well, the loan (or grant) ceiling was raised from $3,500 to a maximum of $4,000 to cover up to three months of rent arrears and the threshold for income eligibility was increased by $15,000.

The rent bank additionally supplies funds to cover rent deposits, calculated as the following average amounts per unit size:

• $1,500: studio
• $1,700: 1-bedroom
• $1,900: 2-bedroom
• $2,100: 3-bedroom or larger.

Although previous loan recipients were offered a 12-month repayment hiatus in sync with the pilot program, 2,935 continued to render payments — collectively contributing about $457,000, which was, in turn, granted to new program applicants. The pilot period saw a 52 per cent increase in households receiving support — up from 1,150 in 2020 — which the report frames as an ultimate saving on costs in the city’s shelter system. Nearly 4,100 applications were submitted during the 11 months.

“The grants pilot was also more efficient to administer as clients did not need to submit banking information (which was required in the loans program), thus making the grants program more accessible for clients who may not have been eligible previously as a loans program,” the report states.

If City Council opts to switch over to a grants-based model, the report recommends selective forgiveness on existing loans depending on the ability to repay. There is currently an unpaid balance of about $12.5 million since the rent bank was launched in 1998.

“Repayments that are collected will supplement the Rent Bank Fund beyond the approved base funded budget and allow more grants to be provided,” the report notes.

The report will go to Toronto’s planning and housing committee for consideration on May 31.