Rental Price Regulations

Rental price regulations are laws to protect tenants from unwarranted large rent increases and to help maintain access to existing affordable housing. Rent control and rent stabilization laws regulate rents that a landlord can charge tenants and limit the reasons for tenant evictions. A landlord cannot use eviction as a means to circumvent rental price regulations.

Early rent controls adopted in the 1920s and extending through the next few decades set strict price ceilings and rent freezes to lock in rental prices. With the postwar 1950s housing boom, these strict policies, commonly referred to as first generation rent control, were abandoned by most cities.

New efforts for rental price regulations in the 1970s led to 2nd generation price regulations which took a more moderate approach. Rent stabilization policies allowed periodic rent increases during tenancy and applied to certain building types rather than all tenant occupied housing within the city. Rent stabilization allowed rents to increase to market rate between tenancies. A new tenant paid market rent with a limited fixed amount of rent increase as set by ordinance and administered by a governing board.

Most rent price regulations are set by municipalities and counties and vary by location for statutory requirements, type of property, age of the property, tenant income, and other jurisdictional issues such as calculation of maximum rent, exempt properties, eviction restrictions, and enforcement polices and penalties.

Most states have preemptive laws regarding rent regulations. Preemption occurs when a law at a higher level of government overrules authority at a lower level. In the case of rent regulations, preemption means state law prohibits municipalities from passing any type of rent control legislation. A few states follow Dillon’s Rule which requires states to expressly grant powers to local governments to adopt rent regulations. Some states do not address the issue of rent control by statute.

Currently only five states have some form of rent regulations of which two, Oregon and California, have statewide rent control regulations. The other 3 states have laws authorizing local government to adopt rent control ordinances. Approximately 200 municipalities have adopted some form of rent regulations.

Rental price regulations provide benefits to tenants, such as:

  • Affordable housing,
  • Stable rents, predictable regulated rent increases,
  • Automatic lease renewal, and
  • Long term tenancies – costs of moving are avoided.

However rental price regulations can present challenges to landlords, such as:

  • Regulations may limit or restrict ability to make a profit or meet current financial business obligations since regulated units are often priced below fair market rents,
  • Expenses for maintenance and upkeep are rising – some tasks may be deferred,
  • Less incentive for updates and renovations, and
  • Less tenant turnover but no new renters may mean keeping a troublesome tenant on renewal.

Rent regulation can also impact construction of new rental housing. Developers may be hesitant to commit to new construction in certain areas since the new housing market rent would be in competition with stabilized rents.

State Regulations


In 2019 Oregon became the first state to enact statewide rent control establishing a broad-based relatively high cap on annual rent increases. Oregon’s law generally limits rent increases, bars landlords from raising rent during the first year after tenancy begins and requires landlords to give tenants 90 days written notice before raising rent after the first year of tenancy.

These protections of rental increase cap and a tightening of rules for eviction apply only to multi- unit buildings constructed more than 15 years ago whose rent is not subsidized by the government.

The law prohibits landlords from raising current rent by more than 7% plus inflation, a version of the Consumer Price Index (CPI) published by the US Bureau of Labor Statistics during any 12-month period. The Oregon Office of Economic Analysis is required to calculate and publish by September 30 each year the maximum annual rent increase percentage for the coming year. Allowable rent increase for 2022 is 9.9%. The maximum allowable annual rent increase is uniform across Oregon.


Effective in 2020 California enacted statewide rent control legislation to target steep rent increases. Statewide rent control law generally caps annual rent increases for qualifying units, limits the number of allowable annual rent increases and includes additional tenant eviction protections. Specifically the law limits annual rent increase at 5% plus the change in the regional CPI over a specified time period or no more than 10% of the lowest rent charged during any year long period before the date of the increase and prohibits landlords from increasing rent in more than two increments annually if a tenant occupies the unit for at least a year.

California statewide rent control laws will sunset January 1, 2030 unless renewed by the legislature.


New York City

New York City is the most widely recognized municipality with rental price regulations, having both rent control and rent stabilization policies.

Rent control regulations New York City requires:

  • The building must have been constructed before 1947.
  • The same family must have occupied the unit since 1971.
  • Tenants can only pass down their rent-controlled apartment to family members.
  • The tenant’s family member (the individual inheriting the rental) must live in the apartment for at least two consecutive years before ownership can transfer to them.

The rent price is a fixed amount and the landlord cannot legally increase rent when the original lease expires. Moreover the tenant has the right to automatic lease renewals.

Rent stabilization regulations in New York City require:

  • The building must have been constructed before 1974 with six or more units.
  • The rest must be less than $2,700 a month
  • The tenant must earn less than $200,000 a year.

Rent stabilization allows a small increase in rent per year according to guidelines established by a governing board. A mid-year rent increase may be allowed in certain circumstances such as improvements or increased services made to rental unit, major capital improvements, or the landlord’s economic hardship.

In some situations a landlord may be able to deregulate a rent stabilized unit, such as:

  • Landlord or immediate family member needs unit for their primary residence,
  • Building is in disrepair and should be demolished,
  • A high rent vacancy deregulation – legal, regulated rent exceeds $2700/month and the tenant voluntarily relinquishes unit,
  • A high rent, high income deregulation – regulated rent is $2733.75 or more per month and the tenant’s annual income is $200,000 annually in each of the two preceding calendar years, (high rent, high income amounts may vary based on the governing municipality and may change every year),
  • Individual unit improvement — once the unit is vacated voluntarily or through eviction, the landlord can increase rent equal to a specified portion of the cost of any renovations and improvements on the unit in addition to any other vacancy increases applied,
  • Conversion of building to a co-op – any regulated units in the building are deregulated upon vacancy,
  • Expiration of tax abatement – landlords are allowed to charge market rate rents,
  • Tenant buy-out by landlord to pay tenant to vacate regulated unit.

St. Paul MN

In 2021, via a ballot initiative, St. Paul voters passed the first rent control policy in the Midwest. The rent control policy effective May 2022 prevents landlord from raising rents more than 3% a year. The ordinance does not include exemptions for new construction. The cap rate of 3% is not tied to inflation and applies even if the tenant vacates the rental unit. A landlord however may request an exception based upon a limited criteria. Landlords have the right to a reasonable rate of return on their investment. This is defined as the property’s net operating income (NOI) of the base year 2019 adjusted by subsequent changes in the Consumer Price Index.

The city has published factors that will be taken into account for exception requests by landlords. Factors include improvement projects, increased operating expenses or increased taxes. Landlords can self-certify requests for rent increases between 3% and 8% by completing the exemption request online. Landlord exemption requests for rent increases greater than 8% will be processed by city administration staff. Landlords have the right to appeal exemption decisions. A landlord cannot increase a tenant’s rent more than 15% in one year, although, if justified, increases beyond that limit can be deferred to the subsequent year.


The above states and municipalities examples reference only major points in their specific rental price regulations. Landlords will need to conduct due diligence for their own property locations and determine complete requirements for administration and compliances. While many landlords are not currently in markets with rent regulations, rental price regulations are an issue to be aware of as more states and municipalities consider/reconsider rent regulations to address affordable housing issues and housing shortages in many areas of the county.

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