Kara Sears
Rent control laws are implemented in a few states and cities across the United States to regulate rental prices and protect tenants from steep increases. While most states don't have rent control, and many ban local governments from enacting rent control measures, some cities and townships have passed rent control ordinances. These laws vary depending on the state and municipality, and they may be enacted by federal, state, or local governments. For example, California, New York, and San Francisco have robust rent control laws, while over 100 cities and townships in New Jersey have passed rent control ordinances.
| Characteristics | Values |
|---|---|
| Number of cities with rent control ordinances | Over 305 |
| Cities with rent control ordinances | New York, San Francisco, Los Angeles, Oakland, Portland, South Portland, Takoma Park, and several others |
| States with statewide rent control laws | California, New York, and the District of Columbia |
| States with partial rent control laws | Connecticut |
| States that ban cities from enacting rent control laws | Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming |
| States with no statewide rent control laws | Maine, Minnesota, New Jersey |
| States that allow municipalities to establish their own rent control laws | Maine, New Jersey, Texas |
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What You'll Learn
California's statewide law and stricter local ordinances
California was one of the first states to pass statewide rent control laws in 2019. While there are no limits on the initial rent a landlord can charge for a vacant rental unit, California's rent control laws prevent excessive rent hikes. The Tenant Protection Act (AB 1482) caps rent increases for most residential tenants in California. Landlords cannot raise rent more than 10% total or 5% plus the percentage change in the cost of living – whichever is lower – over a 12-month period.
The California Tenant Protection Act caps rent increases statewide for qualifying units at either 5% plus the increase in the regional consumer price index (CPI), or 10% of the lowest rent charged at any time during the 12 months prior to the increase, whichever is less. The 2019 rent control laws cover all types of multi-family rental properties in California. However, there are a few exceptions. For example, AB1482 only applies to structures that aren't already covered by stricter municipal regulations in cities that have implemented rent control laws.
In addition to the statewide law, several California communities have their own rent control regulations. The state's rent control laws can contradict the city's rent stabilization ordinance. If a city's local rent control laws are contradictory to the state law, the city law will take precedence if it was passed before September 1, 2019, and/or if it provides more protection for tenants.
Local rent control laws may further restrict how much a landlord can increase rent annually. For example, in Los Angeles, annual rent increases are limited to 8%. Furthermore, the landlord is only allowed to raise the rent once a year. However, if a new roommate moves in, the Los Angeles landlord may increase the rent by up to 10%.
In California, landlords are prohibited from increasing rent in the middle of a fixed-term lease for certain types of discrimination (such as age or race) or certain types of retaliation (such as in response to the renter complaining about bugs). Landlords are allowed to raise the rent for any reason if they give the tenant proper notice. The only time this is prohibited is if the increase is retaliatory or discriminatory.
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New York City's rent control system
New York City has had rent control laws in place since 1943, making it the longest-running rent control program in the United States. The system is based on the Maximum Base Rent (MBR) system, which sets a maximum allowable rent for each unit. The MBR is calculated to ensure that rent covers the cost of building maintenance and improvements and is updated every two years to reflect changes in expenses. Landlords may increase rents by up to 7.5% (as of 2012) every two years until the MBR is reached. However, tenants may challenge these increases if they believe the building has violations or that the increase exceeds what is needed to cover expenses.
Rent control in New York City applies only to residential buildings constructed before 1 February 1947, where tenants have been in continuous occupancy since 1 July 1971. Tenants who moved in after this date but before 1 July 1974 into buildings of six or more units built before 1 January 1974 are generally rent-stabilized. Rent stabilization sets maximum rates for annual rent increases and entitles tenants to receive required services from their landlords.
When a tenant moves out of a rent-controlled apartment, the apartment becomes deregulated. If the building was constructed before 1 January 1974 and contains six or more units, it becomes rent-stabilized. Owners of more recently constructed buildings can agree to rent stabilization in exchange for tax benefits.
Rent control and rent stabilization policies are often coupled with just-cause eviction measures, which limit the ability of landlords to evict tenants without a valid reason. These policies are intended to preserve affordable housing and protect tenants from steep rent increases. However, critics argue that they can distort the housing market by discouraging the development of new rental housing and expediting the deterioration of existing housing stock.
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New Jersey's local rent control laws
While most states don't have rent control laws limiting the frequency or amount of a rent increase, some do have bans in place to prevent cities and towns from passing their own rent control laws. As of April 2024, 33 states prohibited or preempted local governments from enacting rent control measures.
However, New Jersey is not one of these states. While there is no statewide rent control in New Jersey, the state allows local governments to impose their own rent control laws. This means that landlords are free to increase rent at whatever rate they deem appropriate unless the local government has imposed its own rent control laws. More than 100 local governments in New Jersey have implemented rent control ordinances, including in Atlantic City, Elizabeth, Lakewood, Fort Lee, and Edison.
The amount of allowable rent increase varies from location to location. For example, in Edison, a 60-day notice period is required, while in Lakewood, the maximum rent increase is 6.5% if the landlord pays for heating, and 5% if the tenant pays for heating. In Elizabeth, the maximum rent increase is 3%, but it is limited to $20. In Atlantic City, the maximum rent increase depends on the Consumer Price Index (CPI).
New Jersey rent control laws tend towards rent stabilization, in which landlords are permitted to make specific, incremental increases, rather than rent control, in which rent is capped at a certain number to control prices. Most New Jersey rent increases are calculated using the Consumer Price Index (CPI), which determines how much the cost of living has increased every year. Some municipalities allow for rent increases of a certain percentage plus the cost of living increase, while others have limited the percentage by which rent can be raised annually.
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Rent control in the District of Columbia
Rent control laws are in place in a few states and cities across the United States to regulate rental prices and protect tenants from steep rent increases. In the District of Columbia, rent control laws were established by the Rental Housing Act of 1985, which applies to all rental housing accommodations in the district.
The Act limits rent increases that a landlord can institute in apartment buildings constructed before 1975. The law applies to most rental units in the city unless otherwise exempted. All rental properties in DC must be registered with the Rental Accommodation Division (RAD), which is part of the Department of Housing and Community Development (DHCD). If a rental unit is not registered with RAD, rent control automatically applies.
Under the Act, landlords must follow several rules when raising the rent on a unit. Rent increases are generally limited to once a year, based on the CPI-W2. The maximum allowable rent increase is 2% more than the CPI-W2 percentage, not exceeding 10%. For elderly or disabled tenants, the increase is limited to the CPI-W2 percentage, with a cap of 5%.
The District of Columbia's rent control laws also provide eviction protections for tenants. If a rental unit fails to comply with municipal health and safety ordinances, tenants may be able to suspend rent payments until the landlord makes the necessary changes to bring the unit into compliance.
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Texas' rent control laws
Texas does not have any statewide rent control laws in place. However, in certain cases, Texas law allows cities to establish local rent control ordinances. For instance, a state of disaster must have been declared, and the city must find that a housing emergency exists. The governor must approve the ordinance before it can be implemented.
In Texas, landlords are generally free to increase rent as much as they like and whenever they like, except during the lease term. Landlords with fixed-term written lease agreements must wait until the current lease expires before increasing the rent. However, if a landlord is trying to increase the rent by a large amount, the tenant can try to negotiate or choose not to renew their lease.
There are certain cases where increasing rent in Texas might be against the law. Firstly, a rent increase cannot occur before the present lease expires. Secondly, it is illegal if the increase is done in a discriminatory manner, for example, based on race, nationality, disability, religion, age, or sex. Finally, a rent increase is unlawful if it is done in retribution, for instance, if a landlord raises the rent to punish a tenant for exercising their legal rights.
Texas law also allows landlords to collect "reasonable" late fees if the rent remains unpaid more than two full days after it was due. However, in order to collect this late fee, the landlord must have included notice of it in a written lease.
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Frequently asked questions
Over 100 cities and towns in New Jersey have implemented rent control ordinances, including Portland and South Portland. New York City and San Francisco also have rent control laws in place. Other cities with rent control policies include Los Angeles, Oakland, and cities in California, the District of Columbia, Maine, Maryland, Minnesota, Oregon, and Texas.
Rent control laws are government-enforced limits on the rents that landlords can charge, also known as rent stabilization, rent freeze, rent caps, or anti-price gouging. These policies aim to regulate rental prices and protect tenants from steep increases.
Rent control laws mandate artificial caps on rent without monetary investment or compensation by the governing jurisdiction. While the specifics vary depending on the state and municipality, these policies often include just-cause eviction measures and other restrictions on landlords' abilities to manage rental communities.
Advocates of rent control laws argue that they help maintain affordable housing and provide stability for tenants. On the other hand, critics argue that rent control distorts the housing market by discouraging the development of new rental housing and expediting the deterioration of existing housing stock.
