If you’ve been following the headlines recently, you may have noticed rent prices around the country are practically blasting off to space.
And if it’s been a while since you raised your rent prices, you might be wondering:
Just how much am I legally allowed to raise rent?
While it can be difficult to find out, as every state and even county have different laws, there is some useful information you can use to get an idea of:
- How to work within the confines of those laws to make the most of it
- Learn what to look for
- And a simple process for finding out how much you can raise rent in your area
We’ll use California as an example throughout the guide, but toward the end we’ll also cover how to find out your state’s specific rent control laws as well.
In addition, we’ll also touch on COVID-era eviction and tenant protections as they’re an important factor to be aware of in all this.
How much can a landlord raise rent?
In many states, a landlord can raise rent once per typical lease 12-month period by a set single-digit percentage.
For example, in California barring rent control most properties can raise rent by 5% + the percentage change in the CPI (consumer price index).
However, it's important to note that every state and county can differ greatly.
You’ll need to research your state and local laws to find how much you can increase rent on your properties.
Let’s look at another example to show how two states can differ.
According to the Texas State Law Library, Texas has no statewide rent control laws, therefore a landlord can increase rent by any amount whenever a lease is renewed.
However, it’s important to note that Texas allows cities to set up their own rent control laws. So, depending on your area you may have a property in a city with no rent control laws or somewhat strict rent control laws.
And that brings us to another important point:
Across the U.S. the rent control laws of two cities within the same state can vary almost or just as much as they can between two different states.
Like this example from Nolo showing how different L.A. and Inglewood’s (a city which sits right next to Los Angeles) rent control laws are:
That’s why it’s so important to research your local laws as much as your state rent control laws, as those may be more telling than even your state legislation.
What is rent control?
At this point, you might be wondering exactly what rent control is and how it plays into how much you can raise rent as a landlord.
Rent control isn’t one single thing. Rather, it’s any type of legislation which is designed to control how much a landlord can increase rent and how often.
Typically, this refers to one of two types of rent control:
- Pricing control: This dictates how much you as landlord can raise prices each year
- And eviction control: This refers to specific rules related to how and when you can evict tenants
These rules can apply to all properties in an area or they can apply only to certain properties.
For example, California rent control laws generally only apply to more recent properties built in the past 15 years.
What states have rent control?
Along with the question of how much you can raise rent as a landlord, you might now also be wondering what states have rent control laws.
The rules are changing constantly, especially in the wake of COVID-related legislation (see the last section in this guide).
That makes it really difficult to give a set list of, “these states do/these states don’t”.
However, with that in mind, let’s go over states whose base laws don’t include rent control, the same way we talked about Texas earlier.
Again, don’t forget that there may be legislation in place due to pandemic protections which change this for a particular state for the time being.
With that said, most COVID-era restrictions are being rolled back currently in the majority of states.
Have rent control of some kind:
- New York
- New Jersey
- Washington D.C
Don’t have rent control:
- West Virginia
Tenant protections and emergency bans
One last but very important note we need to mention before we cover how to find out your specific state and county’s rent control laws is related COVID policy.
At the beginning of the pandemic, COVID policy was instituted on the state level all throughout the country that applied emergency bans on evictions as well as other tenant protections.
The problem? These protections have begun falling off, but we’re at a point now where they’re in place in certain areas but no longer in others.
While finding out if an eviction ban has been lifted is pretty easy, it can be a bit hard to find out what other tenant protections were published during the pandemic in your state and whether your area still has those protections in place, policies that could impact how much you’re allowed to raise rent.
Legal help platform Nolo has a great page on this summarizing the most up-to-date information for all 50 states here: Emergency Bans on Evictions and Other Tenant Protections Related to Coronavirus.
Lastly, if you haven’t found the answer as to whether your specific state (and county) has rent control laws in place, let’s talk about how to find out.
Because rent control laws aren’t just one single thing, you’ll need to look up a variety of information to make sure you’re fully informed about your area’s rent control laws.
Here’s where to start to get the complete picture:
1. Find out what existing rent control legislation your state has in place from your official state (.org) source
This is relatively easy to find by searching, “does my state have rent control laws [add state url]”.
For that, you’ll need to find out what your state’s official .org site is first.
2. Search about any county-specific rent control legislation
Same process, but this time you’ll want to search for or call about the information related to your county.
Same idea, make sure to find an official source so you know you’re getting both official and up-to-date information.
3. Check with your local county to see if there are any protections or freezes in place
Several types of legislation were used to help tenants during the pandemic, the main two being eviction and price protections as well as rent freezes.
4. Calculate the CPI of your region
Most rent control laws take into consideration the CPI of your region.
If that’s the case for you, head to the U.S. Bureau of Labor Statistics and select your state then country.
Once you’ve done that, if it applies to your area you should see a Consumer Price Index document under a list of documents at the top of the page:
Again, CPI doesn’t apply to every state’s rent control laws, so you’ll need to be clear on your state’s rent control laws before taking this step. However, it does apply to many.
Get the most for your investment
It might take a lot of work verifying your state and local laws and making sure you’re following in line with everything.
However, it’s worth it both to find out how much you can increase rent as well as to make sure you stay out of trouble.
Just make sure to do your due diligence so you’re increasing rent by an amount– and in a way– that is allowed by both your state and local county.