Some cities and counties in California, Maryland, New Jersey, New York, and Washington, DC, have laws that limit the amount of rent landlords may charge. Some of these ordinances also restrict the circumstances under which landlords may terminate month-to-month rental agreements or decide not to renew leases. Local rent control ordinances (also called “rent stabilization” or “maximum rent regulation” laws) are now in effect in some of the country’s largest cities, including New York City, Washington, DC, Los Angeles, San Francisco, Newark, San Jose, and Oakland.
Rent control ordinances vary widely. Some (like some of those in effect in New York) have real teeth, while others (in San Jose and Oakland, for example) are practically useless. And rent control is increasingly unpopular politically—so any changes to existing ordinances are likely to be prolandlord. State law often restricts local rent control rules or bans them altogether; 32 states have laws prohibiting local rent control ordinances.
Because rent control ordinances are often extremely complex, we cannot give you a complete rundown of every ordinance. Here's an overview of the most common features found in most ordinances. Generally, these ordinances protect tenants by enhancing the protenant provisions of already existing laws on landlord-tenant issues such as security deposits and evictions.
Not all rental housing within a rent-controlled city is subject to rent control. Commonly, ordinances exempt new buildings; owner-occupied buildings with no more than three or four units; and single-family houses and luxury units that rent for more than a certain amount.
Rent control comes in two basic styles: one that protects only the present tenant, and one that regulates rent over the long term, regardless of turnover. In rent control jargon, these varieties are known respectively as “vacancy decontrol” (rent restrictions turn off when there’s a new tenant) and “vacancy control” (rent restrictions remain in place when the unit rerents).
In most rent control areas, landlords may raise rent as much as they want when one tenant moves out and a new one moves in. This feature, called “vacancy decontrol” or “vacancy rent ceiling adjustment,” means that rent control applies to a particular rental unit only as long as a particular tenant (or tenants) stays there. If a tenant voluntarily leaves or, in some cities, is evicted for a legal or “just” cause (discussed below), the rental unit is not subject to rent control again until the landlord sets the new (and presumably higher) rent. In short, in a “vacancy decontrol” city, don’t expect to pay the same rent as the prior tenant.
In addition to built-in annual increases, most rent control boards allow landlords to petition for a rent hike based on an increase in costs, such as taxes or capital improvements like remodeling or bringing the building up to code.
These rent control ordinances lock in the rent even when a unit turns over. The rent board sets a base rent for each rental unit, taking into account several factors, including the rent that was charged before rent control took effect, the landlord’s operating and maintenance expenses, inflation, and housing supply and demand. The base rent may be raised during the tenancy under certain circumstances, such as an increase in inflation. When the tenant moves out, a landlord cannot raise the rent to market level. Rent stays controlled, subject to the formula of the rent control ordinance.
Tenancies normally end by their own accord: either at the end of a lease or after the proper amount of notice has been given in a month-to-month tenancy. As long as the landlord is not acting with discriminatory or retaliatory motives, the landlord can decide to call it quits, no reasons needed.
But for rent control to work—especially if the ordinance allows rents to rise when a tenant leaves—there must be added restrictions on eviction. Otherwise, landlords could throw out current tenants in order to get a chance to increase the rent. Recognizing this, many local ordinances require landlords to have a “just cause”—that is, a good reason—to evict. Acceptable reasons include:
Landlords who violate these restrictions on evicting tenants often face stiff civil and even criminal penalties. Nonetheless, landlords in vacancy decontrol areas are fairly notorious for devising creative “just causes” to evict tenants—especially long-term ones—in order to get a chance to raise the rent to market rates. Sometimes it’s easy for a landlord to find a reason to justify the eviction, such as pointing to an unauthorized pet. Other times, landlords try to turn a trivial offense into a just cause for the eviction, such as pointing to a single instance of rent arriving a day late as justifying a termination notice.
To prevent these types of disingenuous evictions, some rent control ordinances require that the stated reason for eviction be the landlord’s “dominant motive.” In other words, if you can prove that your one-day-late rent isn’t the landlord’s dominant motive, and that his desire to raise the rent is the true purpose behind the eviction, you may prevail in court. Of course, proving this—sometimes called a “bad faith eviction”—is often no easy task, and, even if you win, you’ll undoubtedly have to devote precious time and money to defend yourself.
If you’re facing a just cause eviction that you feel is a mere excuse for the landlord to raise the rent, one strategy is to fight aggressively to prevent the eviction lawsuit from being filed at all, starting with your first notice of the impending suit. Research your local ordinance and make it clear to your landlord in writing that you do not believe the eviction is legal, and that you plan to defend yourself to the full extent of the law. Emphasize whatever penalties exist in your area for violating the rent control law, and send copies of your correspondence to the rent board. In some areas such as San Francisco, you can file a complaint against your landlord with the rent board for wrongful eviction. While most rent control boards don’t have the power to stop an eviction lawsuit filed in court, they may be able to dissuade a landlord from pursuing an eviction that has little merit by reminding the landlord of the law—and the potential penalties for violating it.
Local rent control ordinances sometimes impose other rules that protect tenants. Check your ordinance to see whether protections like the following apply to you.
Interest payments on security deposits. Some local rent control rules supplement those set out by state law. For example, in Los Angeles, landlords are required to put security deposits in interest-bearing bank accounts, something not required under California state law.
Special notice requirements. Rent control rules are often tighter than state laws as to the amount of notice required when it comes to raising the rent or terminating the tenancy. For example, state law often requires a 30-day notice for a rent increase. A local rent control law might also require the notice to inform the tenant that the rent control board can verify that the new rental amount is legal under the ordinance
If you are protected by a rent control ordinance, get straight information from these resources: