Housing affordability is a hot topic in today's rental market—especially with inflation still on the rise. When housing prices rise higher than wages can keep up, the US government has many levers they can pull to relieve pressure for tenants, landlords, and homeowners. One of these levers is called rent control.
What is Rent Control?
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 a landlord can charge monthly and annually until the market catches up.
While the goal is to make rent more accessible, rent control regulations can largely impact renters and property owners in various ways. So, whether you're a landlord of a high-demand area or a tenant looking for a rate-controlled rental property, it's important to understand the details of rent control policies and how they work.
How Does Rent Control Work?
It's a common misconception that rent control is a federally regulated policy. However, this type of legislation is handled at the state or local levels. Rent control policies often tie into inflation increases and include additional tenant protections like eviction controls.
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.
You'll find rent control most often in cities with intense competition for limited housing. Typically, the market-rate prices have risen high enough to be out of reach for low and moderate-income residents. Many major cities like New York City, San Francisco, and Los Angeles have rent control caps, easing tenant burdens while respecting landlord needs.
Examples of Rent Control
Currently, only roughly 305 municipalities in the U.S. have rent control regulations. The states with rent control policies in place include California, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, and Washington D.C.
As an example, in California, the Tenant Protection Act caps rate increases at 5% + CPI (Consumer Price Index, aka the measure of the average change of prices over time) for most properties, helping to regulate the overall costs for renters.
Future of Rent Regulation: 2026 and Beyond
As inflation continues to rise, it's likely we may see an increase in rent controlled properties across certain areas of the US to ensure that rental units remain affordable.
For instance, for the first time in Massachusetts, a statewide measure is expected to appear on the November 2026 ballot, proposing caps at CPI or 5%, whichever is lower.
What is Rent Stabilization vs. Rent Control?
Both rent control and rent stabilization are similar levers used to regulate the housing market and protect tenants from unreasonable rent increases.
Rent control is more aggressive, putting strict caps on what landlords can charge for rent. Historically, rent control was used during World War II to freeze rents and prevent price gouging. It was also used in the 1920s to address rent for the working class.
Today, rent stabilization is considered a more moderate approach of rent control, allowing landlords to raise rents by a set percentage. This system balances tenant protections with landlords' need to maintain profitable properties. Many people consider rent stabilization to be 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. With rent controlled units, a new tenants might pay the market rate when they move in, but any subsequent increases will be regulated.
For example, a local 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 laws include tenant protections. These usually include:
- Protection from unnecessary or wrongful eviction
- Lease renewals at reasonable rates
- Rent increase procedures
Rent stabilized units keep housing affordable while supporting landlords and property owners.
How Are Rent Rate Caps Determined?
Rent rate regulations are determined by local or state governments. They may look at various inflation and market formulas as well as consult local boards to come to a decision. These include:
- Current inflation rates
- CPI-linked boards, such as Rent Guideline Boards who vote annually on increases
- HUD (Housing and Urban Development) fair market guidelines
- Local market conditions
What Are The Pros and Cons of Rent Control?
Rent control remains a highly debated topic. While supporters argue it's essential for maintaining affordable rent and preventing displacement in high-cost areas, others worry 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 |
How to Set the Right Rent Prices
How do you set rent rates in a rent-controlled area? Here are a few tips:
1. Set the Base Rent
If a unit is in a rent-controlled area, you can set the base rent according to local housing rules. This is usually the price that was set when the law is passed or a calculated “fair market” rent.
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.
2. Know Annual Increase Limits
Each jurisdiction has its own rules for how much rent can increase annually, so you'll need to find out what your local rent regulation policies are. Some cities will have a fixed percentage cap, while others will be tied to the CPI.
Exemptions and Special Cases
Most rent control laws have specific exemptions and carve-outs, which may or may not include:
- New construction
- Smaller properties (like owner-occupied buildings with few units)
- Major capital improvement increases
- Hardship exemptions for landlords in financial trouble
California, for example, exempts newer construction and certain rental units (such as condos).
Related: How to Report Rental Income: A Complete Guide for Landlords
New Construction and Rent Control
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
Renter Protections in Rent-Controlled Apartments
Rent control laws do more than just set rental prices—they create a whole system of tenant protections to keep housing stable and prevent displacement.
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
Knowing your local rent rate laws is essential in keeping rent increases fair and legal.
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 controlling rent should be regulated locally or banned altogether. Property owners support these preemption measures, protecting property rights and encouraging development.
Where to Find Rent-Controlled Apartments
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.
- Older Units: Rent-controlled apartments are usually in older buildings in cities that are rent stabilized. Look for buildings built before 1970s for the best bet.
- Rent Controlled Areas: Research your city's rent control laws and requirements via local housing authority websites, city rent board databases, and housing advocacy groups such as the National Multifamily Housing Council.
Navigating Operating Costs as a Property Manager
You can find success with rent-controlled apartments and rentals as long as you take time to understand and adapt to local regulations. While rent control may present challenges, you can operate within these systems by focusing on efficient property management, strategic improvements, and stable, long-term tenancies.
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