What is Rent ControlBy PRCC Research, Dec. 4, 2020
Rent control protects tenants from excessive rent increases and promotes affordability in the private rental market by creating a schedule for reasonable rent increases. Under rent control, a locally controlled Rent Board sets a cap on rent increases over any 12 month period (“rent cap”). Landlords who manage rental units covered by the policy are prohibited from raising rent beyond the rent cap.
Rent control has a long history in the United States. During WWII, the Federal government enacted a “rent freeze” to protect tenants from potentially harmful disruptions in the housing market caused by wartime labor market changes and an influx of returning soldiers. Although the freeze was repealed in most jurisdictions in the post-war period (with the exception of New York City), the 1970s saw a second generation of “modern” rent control laws enacted in cities such as Boston, Washington D.C., Los Angeles, and San Francisco. In cities that have retained strong rent controls, controlled units have provided an important source of stable, affordable housing and a bulwark against the disruptive effects of gentrification.
The features of modern rent control laws vary significantly from city to city. Although a more comprehensive list of features is provided in Section IV, some key concepts are defined below:
- Rent Board: Rent control ordinances are administered by Rent Boards, locally-controlled administrative bodies responsible for establishing the rent increase cap and/or adjudicating disputes.
- Controlled/uncontrolled unit: Rent control laws may apply to all private rental units or only units meeting certain criteria. For example, new construction may be exempted, or coverage under the policy may be “pegged” to units built before a certain date.
- Vacancy decontrol: Many rent control laws allow landlords to increase rents beyond the rent cap between tenancies or when a unit is otherwise vacant.