Rent control: definition, how it works, pros and cons
If you live in a highly populated or high-cost-of-living area, you might’ve heard the term “rent control” before. But what is rent control? Does it mean that your landlord can’t raise your rent? And how is it different from rent stabilization? Let's find out.
This article is for informational purposes and it is highly suggested to research your particular state laws.
What is rent control?
Rent control is a government policy limiting how much landlords can charge for an apartment and the rate at which landlords can increase the rent for their properties, often on an annual basis. The objective is to make housing more affordable and accessible, especially in rapidly developing areas where the demand for housing can sometimes outstrip supply.
Rent control isn’t new, dating as far back as ancient Rome, when Julius Caesar reportedly deployed a set of laws regarding how much landlords could charge for rent. Over 2,000 years later, the U.S. would start to see its earliest rent-control laws passed in the 1920s. Since then, rent-control protections have evolved and become a hotly debated issue in some areas. Currently, only a few states in the U.S. have rent-control laws in place.
What is a rent-controlled apartment?
A rent-controlled apartment is an apartment protected by rent-control laws. What this means for the cost of leasing and lease renewal, however, varies by location. In New York City, for example, rent-controlled apartments may have strict limits on the total rent that can be charged on certain apartments for certain residents. In other cities, rent for a rent-controlled apartment can be increased, but only by a certain percentage.
How does rent control work?
Generally, rent control limits how much landlords can raise your rent annually or upon renewal. This doesn’t mean that if your apartment is rent-controlled that your landlord can’t raise the rent; it may simply limit any potential rent increases to a certain percentage set by a local regulator.
Though often confused with each other, “rent control” and “rent stabilization” are not the same thing. Both may place certain limits on rent but have different scopes of protection. Rent control, in many areas, is considered more stringent, with heavier regulations on the cost of leasing and renewing leases. Rent stabilization is regarded as less restrictive but often comes with a wider array of protections, such as a right to renewal and stricter prerequisites for eviction.
The specifics of rent control or rent stabilization policies, however, vary widely by location. If you’re curious about how rent control works in your area, check the specific laws and regulations for your state, county or city or consider speaking with a local tenant organization.
Rent control pros and cons
Rent control is a highly debated topic within the housing sector, providing both advantages and disadvantages for landlords and tenants to consider. Here’s an overview of some of the potential positives and negatives:
Pros
- Affordability: Rent controls help make rent more affordable for existing tenants, promoting housing stability.
- Predictability: By limiting how much rent can rise, tenants can better anticipate future housing costs.
- More lease renewals: A potential advantage for landlords is an increased likelihood of rental renewals, meaning better tenant retention and less time without rental income.
Cons
- Limited revenue: Capping potential revenue for homeowners can, in some cases, make it more challenging to cover rising maintenance or tax costs.
- Older properties: Rent-controlled properties tend to be older, meaning that tenants seeking rent-controlled apartments might be less likely to find units that come with more modern amenities.
- Reduced property upgrades: With limited income, landlords may be less incentivized to upgrade or maintain properties, potentially leading to deterioration over time.
- Decreased housing supply: Some critics argue that rent control can potentially deter developers from building new rental units in rent-controlled areas, believing they won’t get a reasonable return on their investment.
In summary
What is rent control? Rent control is a series of government policies designed to limit how much landlords can charge for rent for protected properties. It’s a tool sometimes deployed in rapidly expanding areas where market forces could potentially make housing unaffordable for general residents, promoting stability and housing security. Rent control specifics can vary widely, so check your local regulations regarding how rent control works for your area.
Rent control FAQs
How do I find out if my apartment is rent-controlled?
To determine if your apartment is rent-controlled, you could consider checking with your local housing authority or government agency that oversees housing regulations. They typically maintain lists or databases of rent-controlled properties. Additionally, your lease agreement might specify the rent-control status. You can also speak with your landlord directly. Familiarizing yourself with your locale’s rent-control ordinances may provide additional information.
Who benefits from rent control?
Rent control is primarily designed to safeguard tenants and help promote housing security and affordability. These protections help long-term residents avoid displacements due to rapidly rising rents in their area and help keep areas accessible when market forces might otherwise make them too expensive. There are, however, other potential upsides and downsides for both tenants and landlords to consider.
What states have rent control?
State policies on rent control are subject to change due to evolving legislation and housing policies. To determine which states currently have rent control, consider consulting government resources such as the National Apartment Association or the U.S. Department of Housing and Urban Development. Additionally, local housing authorities that oversee housing regulations in your state may be able to provide up-to-date information about your location’s specific rent-control policy.
