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Rent Control Proposals Are Proliferating. How Will They Impact the Industry?

Rent regulation policies are back in the news across the nation as housing affordability concerns escalate. From New York to California, governments are taking steps to restrict increases, much raising concerns among developers, investors and other stakeholders. Meanwhile, industry advocates are taking steps to counter rent control proposals and assessing the impact of existing measures.

Tracking state and local bills

Last month, the New York City Rent Guidelines Board voted to freeze rents for both one- and two-year leases for the city’s 1 million or so rent-stabilized apartments. It was the most comprehensive freeze since the RGB was created more than 50 years ago.

A rent freeze was one of Mayor Zohran Mamdani’s campaign promises. While the nine-member board is technically independent, the mayor appointed six new members upon taking office in January. Opponents argued that the board ignored its own data that showed a 5.3 percent increase in operational costs.

In Massachusetts, a proposal to put the nation’s toughest rent control measure up for a vote in November was sidetracked by a court ruling, but proponents are gearing up for a public vote in November 2028.

In Redwood City, Calif., voters will decide this November on a rent-control and tenant protection law that would be more stringent than the state’s rules. If the measure passes, annual rent increases for qualified units would be capped at 5 percent or 60 percent of inflation, whichever is less. Because of the state’s Costa-Hawkins Act, rent caps would apply to properties built before February 1995, impacting approximately 40 percent of the city’s rental stock.

The NAA is tracking nearly 200 state rent control-related bills, including 71 introduced in 2026, and monitoring 25 local ordinances. As of February, 36 states prohibited local rent control. Several bills have been introduced to repeal those restrictions, including two Virginia proposals that would have allowed localities to cap annual rent increases at 3 percent and implement rent stabilization ordinances. Both bills failed.

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Oregon, Washington and California are the only states with statewide rent control, and Washington, D.C. also has a measure on the books. But several states have introduced new legislation this year. New Jersey’s proposal calls for a 5 percent annual limit on rent increases, plus the change in the consumer price index or 10 percent, whichever is lower. More than 120 New Jersey municipalities have ordinances that generally cap annual increases between two and six percent.

Los Angeles recently reduced the allowable annual increase for rent-stabilized units from a range of 3 to 8 percent, plus charges for gas and electricity, to 1 to 4 percent, regardless of operating costs.

“We’ve seen those policies explode over the years and in different markets, in different ways and different manners,” said Greg Cerbana, vice president of public relations and government affairs at Weidner Apartment Homes. “Any amount of rent control, in our view, hurts renters, housing providers and communities alike.”

The National Apartment Association and National Multifamily Housing Council’s position is that rent control exacerbates housing shortages, causes buildings to deteriorate, limits new development and can lead to higher rents.

A proposal blocked by a court ruling

A rent control proposal in Massachusetts has garnered the most attention of any state proposal. The proposed ballot measure called for the strictest statewide rent control in the U.S. It would have lifted the state’s 1994 rent control ban, capping increases at the rate of inflation with a maximum of 5 percent, even with a change in renters. The rent caps would not apply to new buildings for the first 10 years or owner-occupied buildings with four units or fewer. There were some other exemptions for public housing, nonprofits and short-term rentals.

However, the Massachusetts Supreme Judicial Court ruled June 23 that the proposal could not appear on the ballot because it included an exemption for religious facilities that is not permitted under state law.

Homes for All Massachusetts, a coalition backing the proposal, is exploring options for the 2027-2028 election cycle, including another ballot question, reports Carolyn Chou, the group’s executive director. While pending state legislation would allow cities and towns to enact local rent stabilization, it’s unlikely the legislature will act before its session ends on Friday.

Source:https://www.multihousingnews.com/rent-control-proposals-being-considered-across-the-country-what-impacts-could-they-have/

Author: Gail Kalinoski