Our country’s history of housing discrimination created the current conditions in which low-income communities and communities of color disproportionately rent their homes, placing them at the whim of a largely unregulated market with few tenant protections. Prior to the COVID-19 pandemic, nearly 10 million renter households in the U.S. were severely cost-burdened (paying more than 50 percent of their income on rent). In 2023, the minimum wage needed to afford a modest one-bedroom home at a fair market rate in the United States is $23.67 per hour. As rents have continued to skyrocket with inflation and other factors, the need for protections for tenants in privately owned residential properties has increased. 

Rent stabilization, sometimes referred to as rent control, is an effective yet underutilized tool to increase housing stability and affordability for current tenants. It works by protecting tenants from excessive rent hikes, usually by creating a predictable schedule for the maximum rent increase allowable each year while ensuring a fair return for landlords. It is a smart, proven policy that can immediately stabilize prices, halt rent gouging, and reduce the risk of displacement and homelessness while increasing housing security and affordability over the long term. By decreasing renter housing cost burden over time, rent stabilization leaves tenants with more money to spend on essential needs and in the local economy. The increased stability and affordability created by rent control also have positive consequences on mental and physical health, children’s educational outcomes, and community stability. 

Rent controls were first implemented in the United States during World War I and World War II era in response to housing shortages and rent gouging, and then were implemented again in many cities in the 1960s and 1970s in response to a growing tenant movement concerned about civil rights and inflation.

The growth of rent stabilization in major cities created a backlash from the real estate industry, which worked diligently to fight its spread by initiating and supporting preemption policies across the country, in addition to undermining efforts through legislation like the Costa-Hawkins Rental Housing Act. More recently, there has been renewed interest in rent stabilization from cities and states. Both California and Oregon passed statewide rent stabilization in 2019, New York strengthened its laws in 2020, and Saint Paul became the first city in the Midwest to enact rent stabilization in 2021. 

What are we calling it? 

Multiple terms are often used interchangeably to describe rent stabilization policies, including:

• Rent regulations: a general term for policies that aim to make private rental housing more affordable to tenants, whether by limiting rent increases, setting maximum rents, establishing rules for determining fair rents, and/or subsidizing lower rents or smaller rent increases
• Rent control: sometimes referred to as “first-generation rent regulations”, these are policies that strictly regulate rent increases through price ceilings
• Rent stabilization: sometimes referred to as “second-generation rent regulations” or “modern rent control”, these are policies that restrict how much landlords are allowed to increase rent annually
• Rent cap: the rate that landlords are allowed to increase annually, most often in the form of a percentage that can be paired with inflation
• Rent freeze: policies that prohibit rent increases and/or strictly set maximum rents, usually for a short period of time such as during a public health emergency
   

See Local Progress, USC Dornsife Program for Environmental and Regional Equity, the Center for Urban and Regional Affairs at the University of Minnesota, and the Right to the City Alliance for more resources on rent stabilization ordinances.

• Elected and appointed state and city officials can champion and pass rent stabilization ordinances and create funding and administrative mechanisms for enforcement.
   
• State legislators can champion and pass enabling legislation to protect the right of local officials to pass their own rent stabilization ordinances (i.e., prevent preemption laws); in states where cities are preempted from passing rent regulations, state legislators can pass statewide rent stabilization laws (see: Oregon and California) or create loopholes that generate opportunities for local campaigns to pass legislation (see: Minnesota).
   
• Tenant associations, community-based organizations, and other advocates can build grassroots campaigns to build public will and advocate for rent stabilization as a tool for the preservation of affordable housing; if state and city charters allow, advocates can place rent. stabilization ordinances on the ballot and pass them via popular vote.
   
• Business leaders can lend support to grassroots campaigns by highlighting the importance of housing stability for employees and the workforce.
   
• Rent boards are sometimes created to oversee policy implementation, with roles ranging from adjudicating appeals to mediating conflicts between landlords and tenants.
   
• The federal government can enact rent stabilization by requiring landlords who receive federal financing to implement various tenant protections, including rent regulation. In July 2023, PolicyLink joined thousands of tenants, grassroots organizers, and policy advocates in encouraging the Federal Housing Finance Agency to implement rent regulations in all federally-backed homes.

Rent stabilization ordinances are often established by city councils or through a ballot initiative process; in some instances, states have also established rent stabilization policies. The key steps to successfully creating and passing robust legislation include: mobilizing a strong case and broad base of support, drafting a strong law that can withstand legal challenges, ensuring maximum coverage of rental homes to protect the most tenants, maximizing long-term affordability, centering tenant voices in program design and implementation, pairing rent stabilization with other tenant protections, and ensuring adequate enforcement and community education. Jurisdictions seeking to implement rent stabilization must consider a range of related legal and logistical questions.

• Fair return. Because the U.S. Supreme Court and California courts have consistently ruled that owners of rent-regulated properties have a constitutional right to a fair return on investment, nearly all rent regulations include a provision that entitles a landlord to a fair return on their investment. When a landlord is able to prove they meet the criteria for not receiving a fair return, they can be granted rent increases above the allowable yearly increase.
   
• Policy design. No two rent stabilization policies look the same. Each jurisdiction must craft a policy that fits their local housing and political context. When designing a rent stabilization ordinance, consider the following elements:
  • Setting limits on rent increases - Maximum annual rent increases can be set as an absolute percentage, linked to changes in the cost of living (often measured by the consumer price index), or structured as a combination of both.
     
  • Vacancy control or decontrol - Vacancy decontrol allows a landlord to raise rent without restriction when a unit becomes vacant, and creates an incentive for eviction and/or tenant turnover. Vacancy control ensures that the maximum allowable rent increase is in place even if tenancy changes. Partial decontrol is a middle ground in which landlords can increase rent between tenancies with some limitations. The strongest rent control ordinances have little to no decontrol.
     
  • Exemptions - The most common exemption in rent stabilization ordinances is for new construction and this can be rolling or fixed (e.g. the first 20 years of the life of a building are exempt or any building built after a certain date is exempt). Exemptions can also include certain sizes or types of buildings. Cities should pay attention to who is more likely to rent certain units when selecting exemptions to avoid undermining housing stability for renter populations who need it most.
     
  • Pass-throughs - Some cities allow landlords to recover a portion of their expenses related to maintenance and capital improvements by passing it on to the tenant. Cities should be careful in specifying what costs are eligible in pass-throughs as to prevent unnecessary rent increases for trivial maintenance and renovations.
     
  • Banking - In some cities with rent stabilization, when a landlord implements a rent increase that is lower than the amount they are legally allowed to make, they are able to recover the foregone rent increase in subsequent years. The “banked” amount can be applied at the end of a vacancy, and limits can be placed on the amounts that landlords accumulate.
     
• Complementary tenant protections. Rent stabilization is most effective when paired with robust tenant protections to create a complete safety net around tenants. Just cause or good cause eviction protections are essential to prevent landlords from evicting tenants in order to raise rents. Tenants should also be protected against landlord retaliation for making complaints, requesting repairs, and generally asserting their rights under the law. Well-designed code enforcement policies that compel landlords to maintain safe and habitable housing are critical. Longer-term stability and permanent affordability can also be achieved by passing the right of first refusal and tenant or community opportunity to purchase policies, giving tenants or preservation buyers the chance to buy their homes.
   
• Oversight and administration. Maintaining records of units covered by rent stabilization is critical for transparency and enforcement. Cities may consider requiring landlords to pay a per-unit registration fee to fund policy implementation and administration. One way cities can administer rent stabilization ordinances is by creating a rental registry through which they can collect data on rental units, monitor changes in tenancy, and track allowable rent increases.