Possible solutions if you can’t afford the rent

Rent hikes. Job loss. High costs for everything else. Divorce. No rent control. Parental leave. Illness. Thousands of Canadians are finding it increasingly difficult to pay rent. 

Rent was a big contributor to rising inflation in May, up 8.9 per cent over the last year. Many are feeling the same squeeze you are.

Short-term solutions are necessary to quickly close the gap; here are a few ideas to afford rent when times are tough.

Short-term solutions to cover rent

Quickly determine how big a gap there is between what you can afford and what’s being asked. Are you short $500? $1,000? All of it? Be realistic about how long you really need to stay put. Are you keeping this place for six more months? Not moving at all? This thinking gives you a view into solving the rent-rate challenge for a few months, not just for next month.

Popular solutions my students and clients are trying right now are getting roommates, even if it’s not ideal; subletting their places as furnished units if their lease permits it (then moving in with a friend at a less expensive cost); AirBnB’ing their rental if permitted, however that looks for them; and giving back parking spaces and storage units to the landlord in exchange for a rent reduction.

Most are pairing these ideas with selling anything they don’t need on Facebook Marketplace or Kijiji — clothing, golf bags, older tech — and using the proceeds to pay rent. Some have opened Rover accounts and are dog walking, nannying, tutoring and side-hustling.

My advice is to have a conversation with your landlord about potential rent relief for a set period of time, say until your new job starts or until EI kicks in. The worst that can happen is that they say no. It’s a pain for them if you don’t pay at all or have to give notice, which creates an unplanned vacancy.

If debt must be taken on to pay rent, use the least expensive kinds and try to avoid credit card balances or any of the loan sharks. Should family or friends have flexibility, see if a private loan can be arranged, with a clear and reasonable repayment plan. 

Longer-term solutions to cover rent

One of my students is an artist and was able to qualify for a rent-geared-to-income subsidy. She pays what she can afford as determined by their annual adjudication process, and it saves her thousands of dollars annually. 

These grants, subsidies and rent programs can be explored online, and because they take time to process applications, you’ll want to apply sooner rather than later. If you need free access to the internet, head to your local library. Libraries are also connected to local agencies, charities and churches that might be able to provide alternative housing solutions depending on your situation.

Say your situation isn’t as dire (perhaps you have some savings you can rely on), but definitely can’t continue as is; it’s key to begin exploring alternative housing options, and possibly in a less expensive place. Plenty of Canadians move to cheaper locations to save money, and more are returning home as adults to their parents’ home for some financial reprieve. Friends, families and partners are coming together to split costs and share space. Another student of mine provides room and board for post-secondary students during the school year, while balancing being a working single mom, and that adds $1,100 to her income monthly.

Securing a higher-paying job is an important tactic for everyone whose income just isn’t enough for rent, groceries and the basics. However, it takes time to reconfigure a resume, LinkedIn profile and start securing interviews. So prioritize this for sure, but just know that it won’t offer immediate relief. 

If your debt is overwhelming, consider meeting with a licensed insolvency trustee to review if a consumer proposal would be right for you in the long-term.

Need to rent, but don’t meet the income requirements?

While in between jobs, if this is your situation, apply for government employment benefits and inquire about eligibility for additional programs and benefits. There are municipal, provincial and territorial assistance programs and ones targeted to retired seniors as well. The federal government has a webpage to help you navigate the credits and benefits you might be eligible for.

Many landlords are OK renting to you if they understand your sources of income, including if they are from the government. Others might request a guarantor (another person that guarantees the rent if you fail to pay) if you don’t earn enough. Still others won’t care about your income and are satisfied if they see you’ve got savings. 

In Canada, tenants have rights; but in some provinces, they aren’t strong. Get familiar with your landlord tenant board rules and understand how well protected you are from predatory manoeuvers from landlords like exorbitant rent hikes or unjustly kicking you out of your home.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star