Housing Solutions Lab
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Understanding the impacts of greater rent payment flexibility
September 16, 2024
Researchers at the Housing Solutions Lab and the NYU Furman Center have partnered with the Flagstone Initiative, a financial technology nonprofit focused on preventing eviction by increasing financial stability, to study the impacts of rent-splitting, micro rent loans, and other interventions. With generous support from Robin Hood, we are evaluating the ability of these tools to reduce rent delinquency and evictions in New York City and beyond.
Image credit: Getty Images
Overview
In 2023, we partnered with the Flagstone Initiative to rigorously study the impact of rent-splitting and micro rent loans on tenant stability. Rent-splitting allows renters to pay their rent in multiple installments over the course of the month, rather than paying the entire amount at the beginning of the month. This flexibility may allow renters to better align rent payment with their paychecks and avoid snowballing late fees. Renters can also qualify for a no-fee, no-interest loan for about half their monthly rent. The loan amount is paid directly to the landlord and the renter repays Flagstone in small weekly installments. In combination with rent-splitting, micro loans may allow renters to better absorb small shocks like car troubles or an unexpectedly high electric bill and still pay their rent on time.
Study purpose and methods
There is little existing research about the impact of interventions to increase rent payment flexibility. The Flagstone Initiative has introduced rent-splitting and rent loans in rental buildings in several cities including Louisville, KY; Bessemer, AL; and Oklahoma City, OK; with promising outcomes. With support from Robin Hood, we partnered with Flagstone and a New York City affordable housing owner to rigorously test rent-splitting and rent loans in a subset of their buildings. Now, using the landlord’s rent roll data, we are assessing whether and how the treatment helps households stay current on rent and maintain stability, compared to similar households that were not offered these payment options. We are also drawing on rent roll data from Flagstone’s other sites to understand how impacts may vary across different markets and regulatory contexts.
Policy contributions
If our study finds positive impacts, it could encourage broader uptake of these tools and guide housing finance agencies, state and local governments, and lenders in crafting policies that encourage housing owners to allow greater rent payment flexibility.
