Rent Control vs. Rent Stabilization, Explained


When you start your apartment search, you can sometimes hear about rent-controlled or rent-stabilized apartments. What do these terms mean? Can either of them save you money on rent? How do you find eligible apartments? When looking for your next apartment, it can help you learn about rent regulations, where they are available, and the pros and cons.

What is rent regulation?

Rent regulation policies are laws that guarantee a cap on rent prices in certain areas of the United States. Currently, rent-regulated living is only available in New York City, Oregon, California, New Jersey, Maryland, and the District of Columbia. All other states prevent or prohibit rent regulation, while some have cities that might allow it, but not for various reasons.

If you live in a place that offers rent-regulated apartments, you may need to learn more about the differences between rent control and rent stabilization. It is important to note that the rent regulation is separate from sections 8 and 42 of housing.

What is rent control?

Rent-controlled apartments are a type of apartment where the rent has been essentially frozen and cannot be increased at the end of the lease, regardless of its market value. For example, a rent-controlled apartment today might still have the monthly rental price of 1975.

If you’re lucky enough to know someone who lives in a rent-controlled apartment, this is currently the only way for you to rent one yourself. The laws establish strict criteria for apartments to be considered subject to controlled rent. For example, rent-controlled apartments must have been built before 1947 and have the same family living there since 1971. These apartments can be transferred within the same family as long as the new tenant has lived there for two years. before inheriting it.

If a rent-controlled apartment is in a building with six or more units and becomes vacant for lack of a family to transfer it to, it generally becomes a rent-stabilized apartment.

What is rent stabilization?

Rent stabilization is different from rent control in that the rent for these apartments can be increased at the end of the lease. The stabilization part comes in because they are limited to a small fixed percentage for the increase. This means that rent-stabilized apartments are more common and easier to find than rent-controlled apartments.

Rent stabilized apartments have their own unique criteria that must be met in order to qualify as such. These apartments must have a minimum of six units and have been built between 1947 and 1974. Rent cannot exceed $ 2,700 / month, and if it reaches that amount, stabilization can end. Finally, the tenant must earn less than $ 200,000 per year. If the tenant earns more than $ 200,000 for two consecutive years, the landlord can choose to reverse the stabilization and return the apartment to its current market value.

Rent control and rent stabilization

Although the terms are often used interchangeably, rent control and rent stabilization are very different things. Here are the main differences between the two.

Controlled rent apartment:

  • Built before 1947
  • Employed by the same family, or by members of the same family, since 1971
  • Can be passed on to the next family member online to keep the rent controlled as long as the new tenant has lived in the house with the previous tenant for at least two years
  • The rent is frozen

Stabilized rent apartment:

  • Built between 1947 and 1974
  • The complex must have a minimum of six units
  • Renter’s income is capped at $ 2,700 / month
  • Annual income is capped at $ 200,000
  • Rent can be increased by a small percentage each year

Pros and Cons of Rent Control and Rent Stabilization

A rent-regulated apartment has a number of advantages for the tenant. These include:

  • Rent prices will remain predictable even if you fall below rent stabilization, allowing for small increases
  • It provides affordable housing in otherwise expensive areas and promotes housing security because tenants want to stay where they are
  • Lease renewals high due to protective laws surrounding both forms of rent regulation

Obviously, the advantages tend to be in favor of tenants, so consider the disadvantages of rent regulation as well. The downsides of rent regulation tend to affect landlords or landlords, which may help explain why it may be more difficult to find an apartment with rent regulated.

  • Owners and owners cannot get as much profit from these units. If an apartment’s rent is controlled or stabilized, its tenants could pay a stale amount per month based on the current market value.
  • Homeowners and property owners may be less likely to want to invest their own money in their apartment complexes through renovations and maintenance. It can also make the living situation more difficult for a tenant.
  • Rent regulations could at times dampen the growth of new apartment complexes in the area, as developers cannot compete with the lower prices of rent-stabilized housing.

Requirements for rent control and rent stabilization

As a potential tenant, you will need to meet certain criteria to be eligible for regulated units.

  • Income: If you earn more money than the threshold listed for your building, your landlord can begin the process to end rent regulation on your home.
  • Age of building: Check the age of the building. Rent-controlled apartments are much older, but the apartment you are considering may still be eligible for rent stabilization if it was built between 1947 and 1974.
  • Local laws: Even though rent regulations are allowed in your state, local and municipal laws can override them. Be sure to check your local laws before anything else.

Rental regulations vary in each of the five states and the District of Columbia that still support these laws. Remember to research the criteria for the area in which you are looking for a new home.

While rent-controlled apartments are hard to find, rent-stabilized apartments are easier to find and still offer that sense of budget security when it comes to paying rent. Search thousands of affordable apartments on Zumper and you might find rent regulated.

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