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LEASING 101: WHAT A PROPERTY MANAGER NEEDS TO KNOW ABOUT
RENT CONTROL Contributed by the Team at LIVABLE
ent control refers to legislation restricting rental rates in a city or state. The maximum rent that can be charged for a unit and the amount that the rent can be increased per year varies per municipality. Cities use rent control laws to regulate the housing
In the United States, rent control is not often used. According to a 2019 Urban Institute report, 182 towns in the United States have rent control laws, all of them located in New York, New Jersey, California, Maryland, or Washington, DC. In fact, 31 states prohibit municipal governments from passing rent control legislation. However, in recent years, the subject of rent regulation has resurfaced, particularly in cities and states where rising living costs combined with stagnating earnings have produced a housing affordability crisis for middle- and low- income individuals, as well as for seniors living on fixed incomes. Oregon was the first state to enact a statewide rent control law. The rule, which was passed in March 2019, limits annual rent increases to 7% plus the consumer price index increase.
HOW DOES RENT CONTROL WORK?
The earliest rent control laws in the U.S. date back to the 1920s and were often outright rent freezes. These generally proved unworkable. In the 1970s, the idea of rent control surfaced again, this time in a more
moderate form usually called “rent stabilization.” New York City, for example, has two rent control programs:
• For decades, the earliest rent control program has been gradually phased out. It imposed strict rent controls, but the only renters still protected by the law are those properties built prior to 1947 and only renters who have lived at those properties before 1975.
• About half of the city’s rentals are regulated under a more recent rent stabilization policy from the 1970s. The Rent Guidelines Board, whose nine members are selected by the mayor, determines the allowed percentage increase each year. The laws and exceptions are complicated, and they are overseen by a mix of city and state entities.
The high cost of living in New York City is frequently cited as proof that rent control doesn’t work. The average rent for a one-bedroom apartment in Manhattan was $4,642 for a doorman building and $3,167 for a non-doorman installation as of November 2021.
HOW TO OFFSET UTILITY BILLS IN RENT- CONTROLLED AREAS
To offset utility bills in rent-controlled areas, you
market.
APARTMENT MANAGEMENT MAGAZINE - MAY 2022 CS-23