Finding an affordable place to live can be difficult, especially if you’re renting. When combined with utilities and other necessary expenses, rent can put a serious strain on your monthly budget.
The costs associated with renting are the reason many people seek rent-controlled properties when looking for a place to live. Rent control aims to improve housing affordability by preventing landlords from raising rent prices to overly high levels.
There’s more to rent control than meets the eye, however. Let’s take a look at how the program works, how to find rent-controlled apartments and other ways to secure affordable housing.
What Is Rent Control?
Rent control is a legal method used by states and local governments to cap the amount that landlords can charge for rent. It also limits the amount that landlords can raise rent for existing tenants.
Every municipality determines the rent control law’s provisions and puts any caps in place. It’s important to note that rental rates will typically fall below the current housing market rate, making the rentals more affordable. This method is also known as rent stabilization because it keeps rental prices from surging each year.
Keep in mind that rent control ordinances aren’t implemented everywhere. In fact, more than 30 states have passed laws making it impossible for cities and towns to implement rent control regulations. Fortunately, there are other forms of affordable housing that are available across the U.S. We’ll discuss those options later on in the article.
How Does Rent Control Work?
In an area with rent control, the jurisdiction or municipality determines how much landlords can charge for specific rental properties, and this is often based on square footage or the number of bedrooms in the unit. The municipality also caps the percentage that landlords can raise the rent on existing tenants each year.
If the landlord tries to charge too much or attempts to raise rent by more than is allowed under the rent control law, tenants can report the landlord to the city’s housing authority for the violation.
In a rent-controlled property, tenants won’t have to worry about paying more than the city deems appropriate. The rent will be capped at the maximum, and any rent increases will be limited to the levels that the municipality has set.
This can make rent payments more predictable for tenants. It also allows tenants to choose a house or apartment that they can likely stay in for years without having to worry about the rent becoming a major financial burden.
The Pros And Cons Of Rent Control
Rent control has been in place in some large cities for decades and has advantages and disadvantages for both tenants and landlords. Let’s take a look at some of these pros and cons.
The Pros Of Rent-Controlled Apartments And Rentals
The pros of rent-controlled apartments extend beyond providing affordable rentals to tenants. Rent-controlled apartments also:
- Create stability: In areas with rent caps, tenants are more likely to stay put. This creates stability for the tenants and the neighborhood.
- Free up money: Stable and fair rent prices allow tenants to use more of their income to pay for necessities and luxuries alike.
- Increase occupancy rates: One of the biggest challenges for landlords is finding reliable tenants to fill their units. Since rent-controlled properties are in high demand, landlords will likely enjoy a higher occupancy rate each year.
- Reduce eviction rates: Landlords may have to end tenancies for different reasons, such as if the tenants can’t afford their rent. This can make it difficult for the former tenants to secure safe housing in the future. Rent control protections reduce eviction rates, making renters more likely to find a new home if they ever need to move.
The Cons Of Rent-Controlled Apartments And Rentals
Although rent control has a number of benefits, rent-controlled apartments can also be:
- Less profitable: Since the law restricts how much landlords can charge for rent-controlled properties, they must accept a lower profit.
- Hard to find: Low profit potential tends to discourage landlords from offering rentals in rent-controlled areas. As a result, some people have a harder time finding an affordable place to live.
- Poorly maintained: Because landlords are limited in how much they can require in rent, they may be less willing to maintain or upgrade their rentals.
- Illegal in some areas: For better or worse, many states and cities have banned rent control. This makes it harder to find affordable rental housing and impossible for municipalities to offer rent-controlled properties.
How To Find Rent-Controlled Properties
Most landlords who oversee rent-controlled properties should tell you upfront if the apartment or rental unit you’re interested in is rent-controlled. However, finding these rentals takes a bit more work than scrolling through real estate listings online.
You’ll need to check with your city government to see if it has a list of rent-controlled properties on