Compared with homeowners, renters in the US have historically received limited supports and protections when facing economic hardship. During the pandemic, however, the federal government distributed almost $47 billion in rental relief, giving communities the opportunity to experiment with new programs to support renters.

In collaboration with the Cities for Financial Empowerment Fund, we examined partnerships between housing stability organizations and organizations offering free, one-on-one financial counseling designed to help renters achieve housing stability (PDF). We looked at how municipal Financial Empowerment Centers (FECs) in five cities co-created support strategies with local rental assistance and eviction prevention programs from March 2022 to February 2023. Each pilot site established processes to quickly connect clients with FEC services and provided guidance for negotiating with landlords. They also assisted clients with their financial well-being goals, including tackling debt and delinquent accounts, opening bank accounts, and identifying saving strategies.

As renting costs continue to rise faster than income, partnerships among rental assistance providers, eviction prevention programs, and financial empowerment service providers could help renters work toward financial and housing stability in the short and long terms.

Though take-up rates were low, financial counseling services helped improve the financial well-being of some renters

During the nine-month study period, 185 clients attended at least one FEC session. Approximately 65 percent of these clients were Black or African American, 21 percent were white, and 8 percent were Latine. Just over three-quarters of clients were female.

Although all clients were referred to FECs by housing stability organizations, only two-thirds of clients who attended a FEC appointment had housing debt. This is likely because of the availability of federal rental assistance during the period. Among those who came to a FEC, clients who were late on rent owed an average of $1,029 to their landlords and $229 in utilities.

Across the five cities, the number of clients who scheduled a meeting or attended a FEC session was much smaller than the number of clients that housing stability program staff had referred to FEC services. The caseworkers we interviewed attributed low take-up rates to the fact that clients were experiencing a housing crisis. To address this, one program began referring clients to financial counseling as soon as their emergency rental assistance was approved, when clients would be more stable.

Clients who were employed were slightly more likely to attend more than one FEC session. In response, another program prioritized referring clients with incomes, including those who receive public benefits, to FEC services because they thought these clients may find more value in the service.

Among clients who attended more than one session, 15 percent reduced the number of their delinquent accounts within the nine-month study period. Seven percent reduced their debt by at least 10 percent.

As one FEC counselor explained, “This time last year, they couldn't pay their rent, and [now], they are mastering their money.… They have savings accounts. They’re just very proud of themselves, with good reason.”

Though the partnerships helped some clients improve their financial stability, further research is needed to explore how and when financial counseling can best support renters.

Partnerships between housing stability service providers and FECs can help provide holistic supports to people facing housing instability

In our interviews, several clients described the challenges of maintaining economic security in the face of benefit cliffs, revealing a need for supports beyond housing services. After being furloughed and eventually let go, one client explained, “I received [unemployment] assistance during that time. [Then] I found a job working for a clinic. Worked there. The assistance cut off because I made too much money. I worked there for about 8 to maybe 10 months. After that, I had lost my vehicle. I lost that employment as well.”

Programs that offer multiple types of support to renters facing a housing crisis have been shown to benefit renter stability. The local FEC partnership model presents an alternative to the “one-stop shop” approach some organizations used during the pandemic. There are often limits to the depth and breadth of services one organization can offer, whereas building partnerships between existing providers allows organizations to focus on their strengths.

Many of the partnerships created between FECs and local housing organizations remained in place as federal pandemic assistance ended. In Pennsylvania, Allegheny County created a new, local grant program that formally combined rental assistance with FEC counseling. In Lansing, Michigan, an eviction diversion court now actively refers clients to their local FEC. As one local partner stated, the “FEC has a lot to bring low-income clients and has a lot of benefit to the antipoverty work that we’re doing.… It’s been good to see what FEC can do for folks. Nearly all of our clients would benefit from the financial coach.”

How policymakers could help renters facing a housing emergency

Building robust partnerships between local housing stability programs and other supportive services like financial counseling can help renters in a housing crisis in the short term and set them up for long-term success. To better support such partnerships, federal, state, and local government agencies could take the following actions:

• Encourage communities to link supportive services, such as financial counseling, to housing and community development funds to foster collaboration between service providers. During the pandemic, the federal Emergency Rental Assistance program allowed localities to use up to 10 percent of the funding they received toward housing stability services. This allowed many states and localities to create long-term, targeted relationships with service providers. To build a robust and sustainable network of services, communities should build these partnerships when they aren’t facing a crisis.
• Give housing service providers time to assist clients facing housing instability and connect them with financial counseling. Establishing a minimum period, such as a 30-day notice, between late payment and eviction filing could help housing stability service providers have enough time to make referrals and ensure clients can access them.

Some federal programs already have these minimums in place. Since the start of the pandemic, multifamily property owners with backing from a government-sponsored enterprise must provide a 30-day notice to vacate to renters. The US Department of Housing and Urban Development also began a rulemaking process to require public housing agencies and owners of properties participating in its multifamily rental assistance programs to notify renters in writing at least 30 days before filing for an eviction from nonpayment. Still, most localities don’t require private landlords to notify tenants in advance.

Though accessing financial counseling may not be enough to prevent an eviction, these resources can help clients start working toward longer-term financial stability.