Finding the S in ESG With Flexible Rent Payments - Zenbase

Finding the S in ESG With Flexible Rent Payments

Financial Health September 13, 2022
Finding the S in ESG With Flexible Rent Payments

Written by: Koray Can Oztekin

Housing supply is at its lowest level and vacancies are at record low, 3% nationwide. When residents are spending up to 50% of their income on rent, there is a significant need to expand on the “S” (Social) in ESG with solutions that improve the financial health of rental communities.

What is ESG in housing?

ESG is the acronym for “Environmental, Social and Governance” that has become crucial for investment considerations globally. Multifamily developments that invest in sustainable features (Environment) and/or provide affordable housing (Social) are more likely to find options from capital sources looking to meet ESG targets. With the current housing policies, it’s extremely hard to invest in “S” by building affordable housing though luckily it is possible to help tackle affordability challenges by offering alternative solutions.

More flexibility in rent payments to improve financial wellbeing

A Equifax report published last week said:

“Credit card balances rose to the highest level since the fourth quarter of 2019 and the average credit limit on new cards is over $5,800, the highest it has been in the last seven years.”

Bloomberg

To avoid racking up credit card debt, paying late fees and being stuck between paychecks households need more flexibility in paying their bills, starting with rent.

Almost 40% of the households are spending 30-50% of their income on rent leaving them with very little buffer between paychecks to manage household expenses as a whole. Such affordability issue is creating financial stress for residents from all income brackets who end up with two options: a) find a new home or b) deal with it.

Finding a new home is statistically challenging

Apart from the mental, social and economical challenges around changing homes, current trends make it extremely difficult to find a new home

  • Nationwide vacancies are at an all time low of 3%. For instance only 1% of the rentals in Vancouver are vacant.
  • Turnover rates remain as low as 7.4%. People are simply staying put.
  • Required growth in housing supply to accomodate demand is 3X of what is projected. There are always more new renters than new homes.

When finding a new home is not a real option, residents can do nothing but just deal with their rent payments and affordability issues.

Navigating affordability issues using alternative rent payment methods

We, at Zenbase are not housing developers therefore cannot fix the housing supply shortage and avoid affordability issues. However we can partner with property managers, owner & operators to help residents navigate affordability issues by splitting their rent payments and giving them flexibility & control to manage their household expenses as a whole. We think it’s unfair that the biggest expense of the month needs to be paid on the 1st while it takes at least 14 days to receive all monthly earnings to cover that expense.

Flexible rent payments is an effective option in the toolkit of our partners to boost their “S” initiatives in ESG and help improve their residents’ financial health with flexible rent payments. Learn more here.

Philipp Postrehovsky | Zenbase COO

Philipp is a marketing leader, brand builder and product visionary who has been involved in the fintech scene for over 17 years. In 2013 he co-founded RentMoola, which continues to be one of North America's leading fintech companies with the mission to eliminate the rent cheque and modernize rent collection for the enterprise. Before that, he was a marketing leader for Mogo Technologies, Wonga Canada and began his career at Electronic Arts. Most recently he was SVP, Marketing at Progressa and VP, Digital Marketing at goeasy. He founded Grind For Kids, a program that raised over $1 million for BC Children’s Hospital Foundation and is a mentor to new entrepreneurs.

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