Rent Control vs. Rent Stabilization: What is the Difference?

• Rent control and rent stabilization are types of rent regulations that make apartments more affordable.
• Your income determines whether you qualify for a rent-regulated apartment.
• Rent regulation laws vary around the country, and city laws can trump state laws.

When you’re looking at apartments in major cities, you may hear the terms rent control and rent stabilization. If you’re wondering what these terms mean, you’re not alone. We’ll help you understand these terms, determine whether you qualify for a rent-regulated unit, and learn how to find one.

What is rent control?

Rent control is a policy that keeps the cost of a unit’s rent fixed at a certain rate. The property manager cannot raise the rent, regardless of the current market value. Some rent-controlled units in New York City and other major metro areas have had the same monthly rent for decades. There are often qualification criteria for rent control, such as:

• The units must be built before a certain year.
• The same family, or members of the same family, must have been living in the unit for a set time.
• A new renter must have lived in the apartment with the previous renter for a set period before taking over the lease.

A rent-controlled apartment may become rent-stabilized if a renter can’t pass it to a family member and it becomes vacant. Despite the low cost of rent, there are usually no maximum income regulations for individuals renting rent-controlled apartments.

What is rent stabilization?

Rent stabilization is a policy that allows property owners and managers to raise the fee by a small percentage at a time. Like rent control, it is another regulation that helps keep rental prices under control. Unlike rent-controlled apartments, rent-stabilized apartments aren’t simply passed between family members. There are often qualification criteria for rent stabilization, such as:

• The units must be part of a structure with a set number of units.
• The units were constructed between a specific set of years.
• The units must not exceed a monthly rental cap.
• Renters must not exceed an income cap.

Rent control vs. rent stabilization

If you’re wondering, what is the difference between rent-controlled and rent-stabilized, here’s one aspect that sets the two apart: The ability to raise the rent at all. Rent-controlled units maintain the same rental fee as long as they meet certain criteria (and the renter is a family member of someone who rented it for at least two previous years). Rent stabilization exists to help renters who may not be able to afford their rental properties if the rent goes up significantly, but a property owner can raise the rent on a rent-stabilized unit. 

The regulations that apply to rent control versus rent stabilization also differ, as do the requirements of the renter. Rent-stabilized apartments don’t have to be passed between family members, but renters do have an income maximum. Rent-controlled apartments have no income maximums but must stay within families.

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 of rent regulations

Rent regulations come with many advantages, especially for renters. These include:

• Predictable rent: Rent is stable for rent-controlled apartments, and increases are kept manageable for rent-stabilized units. This helps renters budget their money more effectively.
• Affordable housing: Rent regulations keep rental prices low in otherwise expensive areas.
• Housing security: As rent is more predictable and affordable, renters can stay in their properties rather than being forced out by high prices.
• High lease renewal: Property owners benefit from rent regulations because the protective laws encourage renters to renew their leases. This helps property owners generate a consistent rental income and saves them the hassle of finding new renters.

Cons of rent regulations

There are some drawbacks to rent regulations, including:

• Reduced profits: Rent regulations keep the cost of rent low. Renters may pay less than the current market value for a rent-controlled or rent-stabilized apartment.
• Fewer improvements: Property owners may be unwilling to invest their own money to renovate or make repairs in rent-regulated apartments. This can make living in these units more difficult for renters.
• Inhibits growth: Developers can’t compete with the lower prices of rent-regulated units, so they may be unwilling to build in areas with many of these complexes.

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.

How rent regulations vary by city and state

Rent control laws are different for every state. Even if your state allows rent regulation, local and city laws may override them. Researching through the links below can help you better understand the laws that apply in your local area. Here are the locations with rent regulation:

• California has statewide rent control caps and regulations
• New York has statewide laws and county laws that protect residents in its cities
  • New York City has additional rent control and rent stabilization regulations
• New Jersey does not have statewide laws, but many municipalities within the state have their own rent regulations
• Maryland does not have statewide laws, but Montgomery County and Takoma Park have their own rent regulation laws
• Maine does not have statewide laws, but Portland has its own rent regulation laws
• Minnesota preempts rent control and Minneapolis and St. Paul are rolling out rent regulation laws
• Washington, D.C., has rent control under the Rental Housing Act of 1985
• Oregon has statewide rent stabilization

FAQs: Rent stabilization and rent control

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.

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.