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Dabl At Home Dec 2020
Presented By
Dabl at Home

The Difference Between Rent Control And Rent Stabilization

Although rent control and rent stabilization sound similar, they are certainly not the same thing!

Lately, we’ve had a lot to talk about when it comes to rent control — or the lack thereof. Notably, videos of shocked tenants lamenting rent increases of hundreds to thousands of dollars on social media have gone viral. With no rent control laws in Texas, landlords are free to raise the rent as much as they want. 

Rent control is best defined as a government program that limits the amount your landlord can raise your rent when it’s time to renew your lease. Although the specific limit for individual towns and cities is determined by local governments, the purpose is to prevent housing from becoming unaffordable, particularly for lower-income residents, the elderly, and members of the population who live on a fixed income. In a world with spiraling costs of living where wages aren’t rising nearly as fast as housing costs, rent control can be a lifesaver. 

Although it may sound good in theory, rent control is highly controversial and has already been banned in more than 30 states. The main arguments against rent control are that it reduces the supply of decent housing and decreases local development, puts a ceiling on profitability, can incentivize bad tenants to stay put, and maintenance of rent-controlled buildings tends to be below par because of the poor return on investment for landlords. 

However, tenants have another type of protection from skyrocketing rents, called rent stabilization. Rent stabilization is much more common than rent control. Although both terms sound similar, they are not the same. Rent stabilization means that the given cost of rent for a property only increases by a small amount each year, or when it’s time to renew the lease. This allows for certain areas to avoid being hit quite as hard by rapidly increasing property costs, protecting tenants from sudden rent increases they can’t afford. However, depending on an individual state’s laws, there could be building requirements and lease term minimums that are necessary in order to consider an apartment or rental property rent-stabilized.

Another key difference between rent control and rent stabilization is that rent control essentially freezes the tenant’s monthly payments. Even when renewing the lease, landlords really can’t increase the rent for rent-controlled units. As Apartmentguide says, finding a rent-controlled unit is like stumbling upon a “pot of gold at the end of the rainbow.” With rent stabilization, landlords can raise the rent a small percentage each time the lease is renewed. This helps keep rent affordable and predictable, but also allows the landlord to keep rent at least somewhat consistent with market value. Tenants in rent-stabilized units are also typically guaranteed the right to renew their lease at the end of their lease term. While it is difficult to find rent-controlled properties, rental properties that are protected by rent stabilization are much more common and accessible. 

Rent Stabilization laws are regulated by state governments. Therefore, laws regarding rent stabilization will vary from state to state. If you live in a state that allows rent stabilization, you should be able to begin your house hunt or apartment search using state-specific databases and lists of where and what units are currently available and protected. We also recommend working with a knowledgeable real estate agent who is familiar with the neighborhoods you are interested in.

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