As you begin your Apartment search, you may occasionally hear about Rent-controlled or rent-stabilized apartments. What do these terms mean? Can either of them save you any money on rent? How do you find apartments that qualify? As you search for your next apartment, it could help to learn what rent regulation is, where it’s available, and the pros and cons that come with it.

What is rent regulation?

Rent regulation policies are laws that guarantee a ceiling on rent prices in some areas of the United States. Currently, rent-regulated living is only available in New York, Oregon, California, New Jersey, Maryland, and the District of Columbia. All other states either preempt or prohibit rent regulation, while some have cities that could allow it but do not for varying 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’s important to note that rent regulation is separate from Section 8 and Section 42 housing.

What is rent control?

Rent-controlled apartments are a type of apartment where the rent has essentially been frozen and can’t be raised at the end of the lease, regardless of its market value. For example, a rent-controlled apartment today could still have the monthly rent price from 1975.

If you’re fortunate enough to know someone living in a rent-controlled apartment, that’s currently the only way you have a chance at renting one yourself. Laws state strict criteria for apartments to qualify as rent-controlled. For example, rent-controlled apartments must have been built prior to 1947 and have had the same family living in them since 1971. These apartments can be handed down within the same family as long as the new renter has lived in the apartment for two years before inheriting it. 

If a rent-controlled apartment is in a building with six or more units and becomes vacant due to no family to pass it down to, it usually then becomes a rent-stabilized apartment.

What is rent stabilization?

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

Rent-stabilized apartments have their own unique criteria to meet in order to qualify as such. These apartments must have a minimum of six units and have been built between 1947 and 1974. The rent can’t exceed $2700/month, and if it does reach that amount, stabilization may end. Finally, the renter has to make less than $200,000 per year. If the renter makes over $200,000 for two years in a row, the landlord may choose to cancel the stabilization and bring the apartment up to the current market value.

Rent Control vs. 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.

Rent-Controlled Apartment:

• Built before 1947
• Occupied by the same family, or members of the same family, since 1971
• Can be handed down to the next family member in line to remain rent-controlled as long as the new renter has lived in the house with the prior renter a minimum of two years
• Rent is frozen

Rent-Stabilized Apartment:

• Built between 1947 and 1974
• Complex must have a minimum of six units
• Renter income is capped at $2,700/month
• Annual income is capped at $200,000
• Rent can be raised by a small percent each year

Pros and Cons of Rent Control and Rent Stabilization

A rent-regulated apartment poses a number of benefits to the renter. These include: 

• Rent prices will remain predictable, even if you fall under rent stabilization, which allows for small increases
• It provides affordable housing in otherwise expensive areas and promotes housing security because renters want to stay where they are
• Lease renewal is high because of the protective laws surrounding both forms of rent regulation

Clearly, the benefits tend to be in favor of the renters, so let’s consider the negatives of rent regulation as well. The drawbacks of rent regulation tend to affect the landlords or property owners, which can help explain why it might be harder to find a rent-regulated apartment.

• Owners and landlords can’t make as much of a profit from these units. If an apartment is rent-controlled or stabilized, their renters could be paying an outdated amount per month in terms of the current market value. 
• Landlords and property owners may be less likely to want to put any of their own money into their apartment complexes by means of renovations and upkeep. This can make the living situation more difficult for a renter as well.
• Rent regulation could sometimes stall the growth of new apartment complexes in the area since developers can’t compete with the lower prices of rent-stabilized units.

Rent Control and Rent Stabilization Requirements

As a potential renter, you’ll need to meet certain criteria in order to qualify for regulated units.

• Income: If you make more money than the stated threshold for your complex, your landlord can start the process to end rent regulation for your unit. 
• Building age: Check the age of the apartment building. Rent-controlled apartments are much older, but the apartment you’re considering may still qualify for rent stabilization if it was built between 1947 and 1974.
• Local laws: Even if rent regulation is allowed in your state, local and city laws may override them. Make sure to check with 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 searching for a new home. 

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

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