Rent control is an increasingly important topic in the US housing market as inflation continues to increase. So, what is it, exactly? Rent control is a government regulation designed to help keep housing more affordable in high-demand areas. The idea is simple enough: limit the amount of rent charges a landlord can charge. Rent control also limits the amount (or frequency) landlords can increase rent yearly.
While the goal is to make rent more accessible, rent control policy impacts millions of renters and property owners in various ways, impacting the overall rental market across major US cities.
Whether you're a tenant searching for affordable housing, such as a rate-controlled rental property, or a property owner trying to figure out the right rate to charge within your local regulations, it's important to understand the details of rent control.
Read on to learn more about rent control: what it is, how it works, and how you can ensure you're set up for rental success.
What is Rent Control?
It's a common misconception that rent control is a federally regulated policy. However, rent control legislation is handled at the state and municipal levels. While rent control laws differ by city, they all have one thing in common: a cap on the maximum rent that can be charged for a unit.
For example, some cities are considering capping annual rent increases at 5% for corporate landlords who own more than 50 units in 2024. Others will tie increases to inflation or operating costs. These laws often include additional tenant protections like eviction controls and landlord maintenance requirements.
You’ll find rent control most often in cities with intense competition for limited housing, and market-rate prices are out of reach for low and moderate-income residents. Major cities like New York, San Francisco, and LA have had rent control for years, each with its way of balancing tenant protections with landlord interests.
In San Francisco, much of the city’s rental housing is rent-controlled; New York City has had some form of rent regulation since 1943. In these high-demand markets, rent control is a key tool for preserving affordable housing and preventing the displacement of long-term residents.
How Does Rent Control Work?
Let's look a bit closer at how rent control works in practice.
Where Does Rent Control Apply?
Rent control is mainly used in big cities, where the demand for housing is out of balance with the supply. Local or state governments will instruct a rent control board to apply and manage rent control based on their constituents' housing needs.
As mentioned above, cities like San Francisco, New York, and LA have implemented these policies to address housing affordability crises. In California, for example, statewide rent control applies to properties 15 years and older, while individual cities may have stricter local ordinances.
Setting Base Rent Prices
When a unit is rent-controlled, the base rent is set according to local housing rules. This initial rent is usually the rent when the law is passed or a calculated “fair market” rent.
For new tenants, some jurisdictions allow landlords to reset rents to market rate when a unit becomes vacant (known as “vacancy decontrol”), while others keep strict control even between tenancies.
Knowing Annual Increase Limits
Each jurisdiction has its own rules for how much rent can increase annually. While not always equal across the board, most rent regulation policies seek to balance out property owner benefits with the ability for individuals to afford housing units:
- Local rent boards or housing agencies set the maximum allowed increase
- Increases are often tied to inflation rates or the Consumer Price Index (CPI)
- Some cities have a fixed percentage cap (like 5% per year)
- Larger increases can be allowed for capital improvements or hardship
Oversight and Administration
Rent control regulations are administered by local housing agencies or rent boards that:
- Process landlord applications for rent increases
- Hear tenant complaints and appeals
- Enforce regulations
- Keep registries of rent-controlled units
- Issue guidance on annual rent changes
Exemptions and Special Cases
Most rent control laws have specific exemptions and carve-outs, which may or may not include:
- New construction is often exempt to spur development
- Small properties (like owner-occupied buildings with few units) are often excluded
- Major capital improvement increases
- Hardship exemptions for landlords in financial trouble
Related: How to Report Rental Income: A Complete Guide for Landlords
Rent Increases and Rent Control
Annual Increase Guidelines
Rent control laws set the road rules for how and when landlords can raise the rent. Local rent boards, like New York City’s Rent Guidelines Board, set annual allowed increases based on inflation, operating costs, and economic conditions.
For example, in 2024, some jurisdictions propose 5% for larger property owners, and others are tied to the Consumer Price Index (CPI).
Protection from Market Fluctuations
These regulations protect tenants from real estate market shocks that could otherwise price them out of their homes.
This predictability is essential in high-cost cities where unregulated real estate rents can jump 20-30% yearly. For example, while uncontrolled units might see 20-30% annual increases in hot markets, rent-controlled units have stable regulated increases that help preserve affordable housing.
Rent Appeals
Most jurisdictions have a formal process for tenants to challenge rent increases they think are unfair or illegal. Tenants can appeal to local rent boards if:
- The increase is above the legal limit
- Proper notice wasn’t given
- The unit has significant issues
- The landlord is trying to get around rent control laws
Renter Protections in Rent-Controlled Apartments
Rent control laws do more than just set prices—they create a whole system of tenant protections to keep housing stable and prevent displacement. These protections recognize that affordable rent isn’t enough; tenants need protection from arbitrary eviction and harassment to benefit from rent control.
Just Cause Eviction
Just cause eviction requirements prevent landlords from evicting tenants from rent-controlled apartments arbitrarily.
Under these provisions, landlords must have a legally valid reason to evict, such as non-payment of rent, significant lease violations, or the owner wanting to occupy the unit. This protects tenants from evicting because a landlord seeks to reset rents to market rate or replace them with higher-paying tenants.
Maintenance
Most rent control laws require landlords to maintain their properties to specific standards even if rents are below market rate. This includes timely repairs, proper building maintenance, and essential services. These requirements prevent landlords from trying to pressure tenants out by allowing properties to fall apart so rent-controlled units stay safe and habitable.
Required Disclosures
Rent control laws usually require clear communication between landlords and tenants. This includes notice periods for any changes to the tenancy (usually 30-90 days), written documentation of rent increases, and clear explanations of tenant rights. These disclosure requirements provide transparency and give tenants time to respond to changes or seek help.
Succession Rights
Many rent control systems have succession rights, which allow qualifying family members who have lived in the unit to inherit the tenancy if the primary tenant moves out or passes away. This protects family stability and prevents displacement of long-term household members who may have depended on their home's rent-controlled status.
What Rent Control Laws and Regulations Should I Know About?
Rent control laws in the United States are governed by several key laws and acts at the federal and state level. These laws work together to create a system of housing protections and guidelines.
Federal Housing Protections
The Fair Housing Act is the foundation of housing law in the US, including where rent control lives. It doesn’t regulate rent prices directly but ensures that housing policies, including rent control, don’t discriminate against protected classes.
Statewide Rent Control
In recent years, there has been a trend towards rent control at the state level rather than city by city. California’s Tenant Protection Act of 2024 is one of the most comprehensive statewide rent control laws, capping annual rent increases at 5% plus inflation for qualifying properties.
Rent Control Preemption Act
Unlike the trend towards statewide rent control, some states have rent control preemption acts. These laws prevent local governments from implementing rent control, effectively banning it in the state.
States like Texas and Tennessee have passed preemption acts, and the debate continues whether rent control should be regulated locally or banned altogether. Property owners support these preemption measures, protecting property rights and encouraging development.
What Are The Pros and Cons of Rent Control?
Rent control remains one of the most debated topics in housing policy. There are plenty of advocates and critics on both sides.
While supporters argue it's essential for maintaining affordable housing and preventing displacement in high-cost areas, opponents contend it can inadvertently reduce housing supply and quality over time.
However, rent control typically succeeds at its core goal: keeping housing affordable for existing tenants. Rent-controlled units protect low and moderate-income residents from rapid rent increases that would otherwise price them out of their neighborhoods.
Advantages of Rent Control | Disadvantages of Rent Control |
| Maintains affordable housing for existing tenants, especially low and moderate-income residents | Can discourage new housing development, potentially reducing construction in controlled markets |
| • Prevents sudden rent spikes that could force tenant displacement | May lead to deferred maintenance as landlords face reduced income |
| Provides predictable housing costs for long-term residents | Can reduce property tax revenue for cities due to lower property values |
| Helps preserve neighborhood diversity and community stability | Often benefits higher-income long-term tenants alongside lower-income residents |
| Offers strong tenant protections against arbitrary eviction | May reduce overall housing supply as units are converted to other uses |
| Ensures landlords maintain minimum housing standards | Can create a two-tiered rental market with high prices for non-controlled units |
| Protects vulnerable populations like seniors and disabled residents | May discourage mobility as tenants remain in units that no longer suit their needs |
| Reduces housing cost burden in expensive urban areas | Can increase costs for new renters entering the market |
Finding Rent-Controlled Apartments
Finding a rent-controlled apartment means knowing where they are and how to find them. While rent-controlled apartments can save you a lot of money compared to market rates, they are hard to find due to low turnover and high demand. Here’s what you need to know to find these gems.
Where to Look
Rent-controlled apartments are usually in older buildings in cities with rent-control laws. In NYC, most are in buildings built before 1974; in SF, buildings built before 1979 are generally rent-controlled. Tenants should focus their search on older neighborhoods in these cities.
Research Local Laws
Before you start searching, research your city’s rent control laws and requirements. Some resources:
- Local housing authority websites
- Tenant rights organizations
- City rent board databases
- Housing advocacy groups such as the National Multifamily Housing Council
Many cities have public registries of rent-controlled buildings that can help you search, and agents are always willing to help tenants find rent-controlled apartments.
New Construction and Rent Control
The relationship between new construction and rent control affects housing development in many cities. Many modern rent control laws have provisions for new construction:
- Exemptions (15-20 years) to encourage development
- Inclusionary housing for larger projects
- Density bonuses for rent-controlled units
- Mixed-income development
Rent control affects how developers finance new construction, with lenders often requiring higher down payments in rent-controlled markets and higher rates may be set to offset risk.
Related: Essential Guide to Property Management Accounting Best Practices | TenantCloud Property Management
Rent Stabilization: An Alternative to Rent Control?
While traditional rent control puts strict caps on rent, rent stabilization is an alternative approach to regulating housing costs. This system balances tenant protections with landlords’ need to maintain profitable properties; many consider a more sustainable model for long-term affordability.
How Rent Stabilization Works
Unlike strict rent control, rent-stabilized apartments allow for more market-rate responsiveness in rent. New tenants might pay the market rate when they move in, but subsequent increases are regulated. For example, a rent stabilization board might allow annual increases based on the Consumer Price Index plus a small percentage, which is more flexible than traditional rent control but still protects tenants from big spikes.
Like rent control, rent stabilization has tenant protections. These usually include:
- Protection from arbitrary eviction
- Lease renewals
- Basic services and maintenance
- Rent increase procedures These protections create housing stability while allowing landlords to maintain their properties.
What Are The Effects Of Rent Control – And How Can Landlords Navigate The Market?
For tenants, rent control can offer a path to stable, affordable housing in expensive markets. And for landlords who can navigate its complexities, it can provide a steady stream of income.
However, finding and securing a rent-controlled unit often requires research, patience, and an understanding of local regulations. Keep track of your rental payments and maintain good tenancy documentation—a rent ledger can help you stay organized and protect your rights as a tenant.
For property owners and housing providers, success in rent-controlled markets depends on understanding and adapting to local regulations while maintaining profitable operations. While rent control may present challenges, many landlords successfully operate within these systems by focusing on efficient property management, strategic improvements, and stable, long-term tenancies.
Want to learn more about how to succeed as a property manager or landlord? TenantCloud is your go-to resource for tenant relationships and property management. Visit us online today to learn more!
