Debt advice for tenants with unpaid rent

Trained providers offer tenants with unpaid rent advice to address their debts, often supporting establishment of debt repayment plans, budgets, and tools to keep track of income, debts, and spending. Advice can be limited to overdue rent payments or address debt more broadly, as many tenants with unpaid, overdue rent also hold other debts. Debt advice can be offered face-to-face or via telephone (Evans 2011); advice is also frequently offered through formal rental housing counseling services. Such services can include broader efforts to navigate complex systems and assistance programs, such as help for residents applying for funds to assist with unpaid and overdue rent; mediation for issues between tenants and landlords; assistance building and protecting assets through counseling on credit, renters’ insurance, and emergency preparedness; assistance with long-term financial goals and planning; and education about maintaining healthy homes (US HUD-Rental counseling toolkit 2018).

Expected Beneficial Outcomes (Rated)

  • Reduced debt
  • Reduced evictions

Other Potential Beneficial Outcomes

  • Reduced stress

Evidence of Effectiveness

There is some evidence that providing debt advice to tenants with unpaid, overdue rent can reduce debt levels (Evans 2011, Hyde Group 2016) and evictions due to unpaid rent (Holl 2016). Debt advice alone is not sufficient to address the complex financial, social, and health issues facing tenants with low incomes, including significant rent burdens, sudden income loss, and financial emergencies; however, as part of a broad, multi-component program, debt advice counseling may improve housing stability outcomes (Holl 2016). Additional evidence is needed to confirm effects, especially over the long-term.

Debt advice appears to reduce levels of overdue rent when provided face-to-face and via telephone (Evans 2011). European case studies suggest debt advice as a component of housing advisory and counseling services may prevent evictions (Gerull 2014). Debt advice can be part of a housing plus approach to addressing poverty, and may be especially beneficial for young people living in poverty by preventing evictions and homelessness (Morris 2015).

An evaluation of the Money House, a UK-based program that includes debt advice, suggests such programs improve financial confidence and reduce stress among 16-24 year olds from disadvantaged backgrounds (Hyde Group 2016). Debt advice to support residents in debt is also a suggested strategy to reduce the costs of health care and social services, as debt burdens are strongly associated with increased stress and mental health issues (Evans 2011).

Debt advice may be more effective when provided early, before levels of unpaid, overdue rent are substantial or residents are facing eviction. Experts suggest landlords and public housing agencies establish effective pre-emptive referral mechanisms that track rent-related debt and encourage residents to take up debt advice to prevent unpaid rent accumulating to substantial levels. Holistic debt advice may be more effective than advice that focuses only on rent-related debt (Evans 2011).

Overall, providing debt advice for tenants with unpaid, overdue rent appears to be cost-effective; a UK-based study estimates a 22% return on investment for landlords through reduced debt and associated costs (Evans 2011).

Impact on Disparities

Likely to decrease disparities

Implementation Examples

The US Department of Housing and Urban Development (US HUD) supports housing counseling agencies around the country that offer free or low cost advice on housing issues, including renting, debt advice, and credit issues (US HUD-Housing counselor). US HUD also offers a guide to expanding housing counseling services, particularly to reach rural and underserved communities and to expand rental and homeless counseling programs (US HUD-Expanding housing counseling).

The Homebase program in New York City is an example of a program that includes financial counseling and money management advice for tenants with low incomes, at risk of losing their homes and entering the homeless shelter system (NYC-Homebase).

The National Foundation for Credit Counseling is one non-profit organization that provides credit and debt advice services, including housing and money management counseling. It has locations in all 50 states (NFCC-Debt counseling).

Implementation Resources

LHS-COVID-19 response - Local Housing Solutions (LHS), NYU Furman Center, Abt Associates. COVID-19 Housing response plans.

US HUD-Rental counseling toolkit 2018 - US Department of Housing and Urban Development (US HUD), Office of Housing Counseling. Rental assistance housing counseling toolkit. 2018.

CFPB-Toolkit - Consumer Financial Protection Bureau (CFPB). Your money, your goals toolkit: Includes dealing with debt.

Citations - Evidence

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Evans 2011 - Evans G, McAteer M. Does debt advice pay? A business case for social landlords. The Financial Inclusion Centre; 2011.

Hyde Group 2016 - Hyde Group. The Money House - Sharing success. 2016.

Holl 2016 - Holl M, van den Dries L, Wolf JRLM. Interventions to prevent tenant evictions: A systematic review. Health and Social Care in the Community. 2016;24(5):532-546.

Gerull 2014 - Gerull S. Evictions due to rent arrears: A comparative analysis of evictions in fourteen countries. European Journal of Homelessness. 2014;8(2):137-155.

Morris 2015 - Morris S, Clarke A, Hamilton C, Jones M, Oxley M. The role of housing and housing providers in tackling poverty experienced by young people in the UK: A review of the literature. Cambridge Centre for Housing & Planning Research; 2015.

Citations - Implementation Examples

* Journal subscription may be required for access.

US HUD-Housing counselor - US Department of Housing and Urban Development (US HUD). Talk to a housing counselor.

US HUD-Expanding housing counseling - US Department of Housing and Urban Development (US HUD), Office of Housing Counseling. Best practices for expanding housing counseling services.

NYC-Homebase - City of New York (NYC), Human Resources Administration. Homebase: Resources and services.

NFCC-Debt counseling - National Foundation for Credit Counseling (NFCC). Connect with an NFCC certified credit counselor: Services include credit and debt counseling.

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