What Is Rent Control?

What Is Rent Control?

Rent Control

he concept of rent control can be enticing for many renters since it helps keep rent affordable in areas where rent is typically higher than the national average. If you’ve heard about rent control, you’re most likely interested in learning more, but the rules of rent control can seem overwhelming. Most renters find themselves asking: What is rent control?

In the most basic sense, rent-controlled apartments are units that can only increase their rent by a fixed percentage, usually decided by a municipality or board. Rent control in the United States has a long and controversial history. Today rent control is offered in only a few US cities and states.

WHERE CAN I FIND A RENT-CONTROLLED APARTMENT?  

Before you start your search, make sure your area offers rent control. Presently, 37 states have laws prohibiting or preempting rent control, while eight states allow cities to enact rent control, but no city has yet to implement it. So, how do you find one of these coveted units? It’s not as simple as finding a unit and applying because you should understand the laws of your area before signing a lease.

In 2021, rent-controlled apartments can be found in 182 cities in five states: New York, New Jersey, California, Washington, DC, and Oregon. Typically, rent control is most common in cities where there are more renters than rentals. Each of these cities have their own set of rules, typically enforced by a municipality.

New York

New York City has the longest-running history with rent control. In New York, rent-controlled apartments can be either single units or entire buildings, and they fall under two terms: rent control or rent stabilization. Rent-controlled apartments apply to apartments in buildings built before 1947, and the tenant has to have continually lived in the apartment since July 1, 1971. The only way to acquire a rent-controlled apartment today would be if the unit was passed down to you by the family member leasing the unit, and you had been living in the unit for at least two years prior to the family member’s death.

Rent stabilized apartments are a bit more common, but still have intricate rules. These apartments must be constructed before 1974 in buildings with more than six units, and the rent rises by a certain percentage, decided by the NYC Rent Guidelines Board each year. For leases starting on or after October 1, 2020 and on or before September 30, 2021,  rent cannot be raised for renewing a one-year lease. For a two-year lease, rent cannot be raised for the first year, and can be increased one percent for the second year.

While you have to inherit a rent-controlled apartment, rent stabilized units are common throughout the five boroughs of New York.  A complete list of rent stabilized units can be found on the New York City Rent Guidelines Board’s website

New Jersey

In New Jersey, there is no state law requiring or prohibiting rent control, so municipalities have the option to enact their own laws regarding rent control.

In 2021, Newark is the only municipality to adopt rent control laws. The Newark Rent Ordinance determines rent increases for specific residential rental units and non commercial units. Certain types of residential units may be exempt from Newark’s rent control laws. These include all public housing and all existing owner-occupied one to four family dwellings. Newly constructed multi-dwelling buildings may be exempt for 30 years if the owner applies for an exemption prior to occupancy.   

California

California has had a patchwork history with rent control because certain cities have had rent control laws since the 1970s. Starting January 1, 2020, California has implemented rent control, known as the Tenant Protection Act of 2019, across the entire state. Now, landlords with apartments and condominiums, in communities that previously did not have rent control, can only raise rent prices by the cost of living plus five percent, up to a maximum of ten percent (if the rental is 15 years old or older). Single family homes owned by individuals and duplexes where the owner lives in one of the units are exempt from rent control. The laws for cities that already had rent control, Santa MonicaWest HollywoodBeverly HillsCulver CityInglewood, and unincorporated neighborhoods of Los Angeles County, will not be overridden, but it will cover units that weren’t previously covered by local rent control laws.

This law also includes eviction protection. Tenants who have lived in a unit for over a year can only be evicted based on at fault or no fault. At fault would be something like a lease breach (not paying rent, health or safety violations, etc.), but landlords have to give tenants time to fix the fault. A no fault eviction would be if renovations need to be made to the unit, or the landlord withdraws the unit from the market. In those instances, the landlord would have to pay the tenant’s relocation fees equal to one month’s rent. Note that unless renewed by the California legislature, statewide rent control will sunset in 2030.

Maryland

Only one city, Takoma Park, offers rent control in Maryland. From July 1, 2020 through June 30, 2021, the rent cap is .4 percent. Landlords are able to apply for larger rent increases if they can prove that the rental facility can’t be maintained due to escalating operating expenses. Landlords also have to give two months notice for rent increase notification. Rent control in Takoma Park does not apply to single family homes, accessory apartments or duplexes where one of the units is occupied by the owner as its primary residence.

Washington, DC

Rent control in Washington, DC is governed by the Rental Housing Act of 1985. This law prohibits landlords from raising rent by the Consumer Price Index plus two percent on units built before 1975 and exempts units that fall into the following categories: any rental housing built after 1975, units vacant when the law was enacted in July of 1985, federally or district-subsidized units, and units owned by a natural person who owns no more than four units in the District. Unfortunately, there are many loopholes in this law that let landlords file petitions that allow them to raise the rent more than two percent.

Oregon

In March 2019, Oregon became the first state to adopt statewide rent control. The law restricts annual rent increases to no more than seven percent plus the increase in the consumer price index, but there are no rent restrictions between tenancies. Similar to California, these laws apply to buildings with multiple units that were built 15 or more years ago, and the law also requires landlords to give tenants a 30-day probation period to fix any lease violations before eviction. If it’s a no-fault eviction, tenants have to be given a 90-day notice and paid up to one month’s rent relocation fees. Property owners who have less than four rental units do not have to pay a relocation fee.

THE PROS AND CONS OF RENT CONTROL 

If you’re on the fence about rent-controlled apartments, it’s important to weigh the pros and cons. The best, and most obvious pro, is that you won’t have to worry about having to move because of rent surges year after year. Because of this, the majority of rent-controlled apartments have long-term and responsible tenants. Another big pro is, when it’s enforced correctly, rent control allows families and individuals with fixed incomes to be able to live without fear of being driven out of their area due to rising costs.

Before making a commitment to a rent-controlled apartment, be sure that you’re going to remain in this area for a while so you can get the most out of it. Rent-controlled units are difficult to obtain, so you’ll want to make sure you’re staying in your area longer than a year to make the search worth your effort. The other bit of information to keep in mind is that these apartments are usually older and might not have all the bells and whistles of newly built apartments.

While each municipality that offers rent control has their own rules and laws, you have a few ways to secure one of these sought-after apartments. First, identify which areas have these apartments and narrow your search. When using Apartments.com, search for your city or neighborhood then select “more” to find a section labeled “keywords,” and use terms like “stabilized” to find units. It might take a little extra work, but rent-controlled apartments are out there.

Rent control is complicated, so it’s important to understand the rent control rules and laws in your area before you sign your lease. Do your research and take your time deciding whether a rent-controlled apartment is for you.

Published April 2, 2021

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