How Does Rent Control Work?

No matter how you cut it, your monthly housing payment comprises a major portion of your monthly bills. Worse yet, if you’re renting, your landlord may be able to raise your rent every time you sign your lease for another year. That’s part of why terms such as “rent stabilization” and “rent control” are like candy to people looking for apartments.

However, these terms only tell you so much. How did they first develop? What exactly are they? How does one differ from the other? Where does rent control legislation exist? Read on to find out how rent control works.

How did rent control first come to be?

The first rent control legislation in the U.S. can be traced back to World War I, but rent control as renters know it today is a product of housing shortages during World War II and the Great Depression. Additional rent control legislation emerged following President Richard Nixon’s enactment of wage and price controls in 1971. However, since these formative moments for rent control, many states have placed massive restrictions on rent control.

What is rent stabilization?

Nationwide, “rent stabilization” is a less common term than “rent control.” Like rent control, it varies by region. 

In New York, for example, in rent-stabilized buildings, landlords can only increase tenant rents by small, government-regulated amounts. Although the New York government doesn’t outline specific requirements that a building must meet to qualify for rent stabilization, the majority of rent-stabilized buildings are of a certain size, were built in a certain era, and don’t exceed a state-mandated rent cap. 

What is rent control?

Although some people may conflate rent stabilization with rent control, the two terms are rarely synonymous. To again use New York as an example, the two terms mean entirely different things in the Big Apple. There, rent control is rare, as not even two percent of New York apartments are rent-controlled. 

In New York, to qualify for rent control, a building must have been built prior to 1947. Additionally, the same family must have occupied the building since 1971. Rent control can only be maintained within the building if an existent tenant dies and leaves the property to a family member who has lived there for at least two years. 

However, outside New York, the term “rent control” is far more common than “rent stabilization.” In fact, “rent stabilization” is a virtually non-existent term outside New York. Nationally, renters should concern themselves more with the term “rent control.”

How does rent control vary by region?

Rent control rules vary immensely by region, as do the number of homes subject to them. In Washington, D.C., for example, the government classifies 79,000 of its rental units as rent-controlled. In these units, landlords can raise the rent by no more than five percent. In San Francisco, rent control laws only apply to buildings built before 1979, so the legislation has done nothing to curb developers from pushing the city’s rental market into its notoriously, controversially expensive modern-day state.

Where does rent control exist?

Despite the frenzy about rent control, only a few states have it in some form. Those states are California, New Jersey, Maryland, Oregon, and New York. Washington, D.C. also has rent-stabilization legislation. Far more states – 37 in total actively limit or ban rent stabilization. In other words, rent control may not be something you need to prioritize if this is a concern you have with your next apartment.

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