As rental prices continue to rise across the US, many renters find themselves grappling with the challenge of managing frequent rent increases, compounded by stagnant wages. To help both tenants and landlords navigate these changes, tools like a Rent Increase Calculator have become invaluable, allowing for better financial planning and forecasting of rent hikes. While landlords use rent increases to cover costs and upkeep, especially in times of high inflation, some cities are taking action to protect tenants by implementing rent control measures aimed at improving affordability.
Though over 30 states have banned rent regulation as of 2024, the issue is still being debated at local and state levels. Understanding rent control is crucial for landlords and tenants to navigate costs and access affordable housing options. In this article, we define rent control and discuss how it helps manage housing costs.
What Is Rent Control?
Rent control refers to policies that certain municipalities make to help renters better afford housing over time. While rent control technically means that rent is “frozen” at a specific rate indefinitely, this arrangement is incredibly rare. Instead, current rent control regulations target “rent stabilization,” often placing percentage-based caps on how much a landlord can raise rent each year.
The first rent control policies in the US date back to the 1920s, when total rent freezes mitigated rising housing prices. [1] These were generally ineffective since they led to less maintained and often unlivable properties managed by landlords who couldn’t afford improvements. The idea of rent control emerged again in the 1970s, in the modern and more moderate form we now know as rent stabilization.
Today, rent is controlled only in certain jurisdictions, and Oregon is the sole state or territory that has enacted statewide rent control laws.
Types of Rent Control
There are many types of rent control, going beyond complete freezes and more moderate stabilization. While rent stabilization allows moderate price increases between tenant turnovers, other options include the following:
- Hard Rent Control: Absolute rent caps set the maximum amount a landlord can charge for any property within a specific jurisdiction.
- Vacancy Control: Rent restrictions remain even after the tenant leaves. These regulations prevent landlords from illegally evicting tenants to charge a new tenant the updated market value for a unit.
How Does Rent Control Work?
Rent control works by regulating how much landlords can raise rents each year, often setting a maximum percentage increase. Without vacancy control, tenants may not see the benefits of a rent-controlled apartment when they first sign because landlords will set their initial prices at market value.
However, the benefits of rent control tend to grow over time, as tenants can avoid the effects of sudden increases in market rates while living there.
The specifics of any rent control arrangement vary by locality. Generally, the individual mechanisms of rent control include:
- Government-Set Rent Ceilings: The local or state government for the jurisdiction will determine how much landlords can charge in rent for specific types of units, considering key factors like square footage and the number of bedrooms and bathrooms.
- Rent Increase Limits: The governing body will also set a maximum percentage of rent that landlords can raise on tenants in a specified period, such as 2–3% per year.
- Applicability: Finally, the governmental body will determine which people and property types are eligible under rent control laws in that area. For example, criteria might be based on the building’s age or the tenant’s income.
Pros and Cons of Rent Control
The overall effects of rent control on jurisdictions and the people residing in them can be both positive and negative. The pros of rent control may include:
- Housing Stability: In areas under rent control, rent payments become more predictable for tenants in the long term. This stability allows them the proper time to plan for any payment increases so they can remain in one place longer without facing housing insecurity due to rapidly increasing rent.
- Positive Impacts on Lower-Income Communities: Those with fixed, low-to-moderate incomes can live more comfortably under rent control. A base of long-term tenants in rentals can also lead to more stable communities and safer neighborhoods due to less tenant turnover. [2]
- Increased Occupancy Rates: Since rent-controlled apartments are in high demand, landlords will not suffer the financial consequences of holding long-vacant apartments. They can rely on long-time tenants who are more likely to pay on time consistently. Landlords may also avoid the costly eviction process due to nonpayment more often, since tenants will more likely be able to pay the set rates.
- Increased Tenant Protections: If landlords increase rent above the amount set by the governing body of a rent-controlled area, tenants can report them for the violation. This system gives tenants clear options for recourse if a landlord takes advantage of them by significantly raising rent prices in too short a period.
On the other hand, the potential cons of rent control include:
- Lower Housing Supply: With rent control restrictions in place, developers have a lower chance of making back their money after creating new rental buildings, discouraging them from providing new housing in growing areas. Also, existing tenants in rent-controlled apartments will be less likely to leave, meaning available housing will dwindle for new tenants looking to rent.
- Declining Housing Quality: With less financial ability and fewer incentives to make improvements and complete property maintenance, landlords and building owners will more likely allow properties to fall into disrepair. This will worsen the living conditions for tenants in rent-controlled areas.
- Costly Court Proceedings: In many rent-controlled systems, landlords have few options outside court to resolve rent-related disputes with tenants. Legal representation and cases can be costly for both parties, so appearing in court to handle a problem that already deals with issues regarding the two parties’ finances is not ideal.
State Laws on Rent Control
Use our convenient reference table to find out where rent control is permissible across all 50 states and Washington, DC.
| State | Does the State Prohibit Rent Control Laws? | Accompanying Statute (If Applicable) |
|---|---|---|
| Alabama | Yes | n/a |
| Alaska | No; minimal rent control allowed in housing emergency areas | 3 Alaska Admin. Code § 90.110 |
| Arizona | Yes | Ariz. Rev. Stat. § 33-1329 |
| Arkansas | Yes | Ark. Code § 14-16-601 |
| California | No; rent control exists both statewide and locally | Cal. Civ. Code § 1954.53 |
Alternatives to Rent Control
Because local rent control laws are not widely available in every state and municipality, there are several more accessible and affordable rental housing options:
Section 8 Housing
The US Department of Housing and Urban Development offers vouchers to help very low-income families afford housing until their circumstances improve under a program called Section 8. [3] The program works by distributing vouchers to eligible tenants that let the landlord know that HUD will cover the difference between what the tenant can pay in rent and the actual cost.
All landlords are free to accept Section 8 vouchers, but not all do, so it’s important to ask your landlord about it before enrolling. Also, only tenants under certain income restrictions are eligible for the program. Interested tenants can begin applying by contacting their local Public Housing Authority (PHA). [4]
Rent Subsidies
HUD also supports public or subsidized housing, which works differently than its Section 8 program. Instead of working directly with tenants in need, HUD connects with apartment owners to subsidize their buildings so they can charge less rent. Then, local PHAs can help place tenants needing more affordable housing in these specific, less expensive apartments. [5]
Inclusionary Zoning
Inclusionary housing or zoning regulations require developers to be inclusive of moderate- to low-income members of the community by providing a certain amount of affordable units within new buildings. [6]
In cases where this is not possible in a current development project, builders can often pay an “in lieu of” fee for government-provided affordable housing or choose to provide more affordable housing in another local project instead.
The Importance of Understanding Rent Control
Rent control has long been controversial and nuanced for landlords and tenants. Its many pros and cons impact both parties and communities at large. Whether you’re a landlord or tenant in or outside a rent-controlled area, knowing about rent control can help you better navigate rental pricing and payments.
Understanding tenants’ difficulties in affording rent can aid landlords in setting reasonable rental prices that keep units more consistently occupied. On the tenant side, learning about all the rent-related resources available, including different ways to pay rent, can help them make better decisions about where to live and how to cover rent.
Frequently Asked Questions
How do I know if I’m living in rent-controlled housing?
You can check your rental agreement or contact your local housing authority to confirm whether your unit should be rent-controlled.
How can I secure a low rental rate?
If you live in an area with rent control laws, search local databases frequently for vacant rent-controlled units. You may also inherit a rent-controlled apartment from an existing tenant if you live with them for a certain period before the transition.
Are any property types exempt from rent control laws?
Yes, every jurisdiction has different eligibility criteria for rent control. Frequent exemptions include new buildings, luxury units, and student housing.
