The Great Recession has led a significant portion of the population to take public transportation instead of purchasing an automobile, eat at home more frequently than going out to eat and to rent an apartment instead of buying a home.
In order to save money in this tough economy, which is marred by debt, stagnant incomes and unemployment, the “Recession Generation,” a term used recently by Bloomberg News, more people are opting to rent rather than buy, whether it’s a home, car or clothing. Akin to the Great Depression that changed the way people lived, the financial collapse of 2007/2008 transformed a life of decadence to an existence of simplicity.
Even if rent may seem to be a cheaper alternative to owning a $300,000 home, many tenants can certainly find it difficult to keep up with the monthly rent, whether it’s due to illness or a job less. When there are no personal emergency savings, the credit card is maxed and there are no other choices, renters may turn to establishments called rent banks.
These institutions provide interest-free loans to low-income households in order to stave off an eviction for failure to pay rent. Public officials and financial experts call this initiative as part of a homeless prevention strategy.
Since its success in Toronto, Ontario and Surrey, British Columbia, rent banks have started to make their way across Canada and the United States.