What Is Rent Control?
Rent control is a government initiative designed to regulate the amount a landlord can charge for renting or renewing the lease on a property. Although the specifics can vary across different municipalities, the primary goal remains the same: to keep housing costs affordable for lower-income residents.
Rent control isn’t a widespread practice in the United States. A 2019 study revealed that only 182 municipalities in the U.S. have implemented rent control regulations, mostly concentrated in New York, New Jersey, California, Maryland, and Washington, D.C. In fact, as of February 2022, 31 states have laws that prevent or prohibit local governments from enacting rent control measures.
As housing costs continue to rise disproportionately to stagnant wages, the call for rent regulation has gained traction in recent years, especially in cities facing a housing affordability crisis. Oregon led the way in 2019 by becoming the first state to introduce a statewide rent control law, capping annual rent increases at 7% plus the growth rate in the consumer price index.
Key Takeaways
- Most rent control laws limit the amount that landlords can increase rents for existing tenants.
- Rent control remains controversial with 31 states enacting laws to prevent it.
- Rent-controlled apartments are highly coveted, particularly in New York City.
- Rent stabilization differs from rent control.
- Oregon pioneered statewide rent control legislation in 2019.
How Rent Control Works
The concept of rent control dates back to the 1920s in the U.S., initially introduced as outright rent freezes, which were eventually deemed impractical. The notion resurfaced in the 1970s under a new guise: ‘rent stabilization’.
New York City offers a noteworthy example with its dual rent control programs:
- Older Rent Control: Phased out since the 1970s, it heavily restricts rental prices, only applicable to tenants who’ve resided in certain buildings since 1974 or earlier.
- Rent Stabilization: This regulates approximately half of the city’s rentals. Rate increases are limited to one or two years and are determined by the Rent Guidelines Board, appointed by the mayor.
Despite rent control efforts, cities like New York continue to struggle with exorbitant living costs. As of March 2022, the average rent for a one-bedroom apartment in Manhattan exceeded $5,000 in buildings with doormen and around $3,400 in buildings without.
Advantages and Disadvantages of Rent Control
Rent control has its share of supporters and critics. Current regulations often address rent hikes for existing tenants rather than new renters, which can be beneficial for landlords who can charge market rates on vacant apartments.
Arguments Against Rent Control:
- Reduces the supply of quality housing as landlords may convert buildings for commercial use or condos to avoid profit limitations.
- Slows down investment in new rental housing.
- Compromises building maintenance due to reduced financial incentives for landlords.
**Arguments For Rent Control: **
- Addresses the rapid rise in rental prices in many U.S. cities as compared to wage growth for middle-income jobs.
- Helps moderate-income families and elderly on fixed incomes live affordably, without fear of significant rent hikes.
- Contributes to neighborhood stability with long-term tenants occupying rent-controlled units.
What Does Rent Controlled Mean?
Rent control refers to apartments with rent limits set by government programs, managed by local municipalities. Such regulations prevent landlords from unfairly increasing rent annually, contributing to more affordable housing for residents who might not be able to pay market rates.
How Can I Get a Rent-Controlled Apartment?
In most cases, such as New York City, rent-controlled apartments are passed down through families and aren’t typically available to the general public. Succeeding a rent-controlled lease can also involve navigating complex regulations.
How Do I Know if My Apartment Is Rent Controlled?
You’ll likely be aware if you live in a rent-controlled apartment, as these properties are usually inherited within families in accordance with intricate succession rules.
Related Terms: rent stabilization, rental market, housing affordability, real estate laws
References
- Urban Institute. “Rent Control: What Does the Research Tell Us About the Effectiveness of Local Action?”, Page 3.
- National Multifamily Housing Council. “Rent Control by State Law”, Page 1.
- Oregon State Bar. “Rent Increases”.
- New York City Rent Guidelines Board. “Rent Stabilization and Rent Control”, Page 1.
- New York City Rent Guidelines Board. “Appendix V, The Rent Guidelines Board (RGB) Rent Index”.
- New York City Rent Guidelines Board. “Board & Staff”.
- M.N.S. Real Estate NYC. “Manhattan Rental Market Report: March 2022”.
- Urban Institute. “Rent Control: What Does the Research Tell Us About the Effectiveness of Local Action?”, Page 6.
- NYC Rent Guidelines Board. “Rent Control FAQ”.
- Bungalow. “All About Rent Control: What It Is, How It Works, and How It Impacts Your Housing Market”.
