Rent Control and Rent Stabilization

What Is Rent Control?

Rent control is a law that limits how much a landlord can raise the rent on an occupied home. The term once suggested hard rent freezes. Today most laws are better described as rent stabilization: rents can rise each year, but only up to a set percentage. Policy researchers use rent regulation as the umbrella term for both.

Rent regulation applies to existing, privately owned rental homes. It is different from income-restricted affordable housing, where rents are tied to a share of area income as a condition of public funding.

How It Works

Every rent regulation law answers a few design questions:

• How big an increase is allowed? Some cities set a yearly figure through a rent board. Others use a formula linked to inflation.
• Which buildings are covered? Most laws exempt newer construction so they do not discourage building. Many also exempt single-family homes and small owner-occupied buildings.
• What happens when a tenant moves out? Under vacancy decontrol, the rent can reset to market for the next tenant. California’s Costa-Hawkins Act requires this for local ordinances. Stricter systems limit increases even between tenancies.

Two statewide laws from 2019 show the modern model. California caps yearly increases at 5% plus inflation or 10%, whichever is lower. It exempts housing that received its certificate of occupancy within the past 15 years, and it is set to expire on January 1, 2030. Oregon’s 2019 law capped increases at 7% plus inflation, and a 2023 amendment added a ceiling of 10%. Oregon also exempts new construction for 15 years. The state publishes the cap each September: 9.5% for 2026 and 10% for 2027.

Washington State adopted a similar law in 2025. After the first 12 months of a tenancy, it limits increases to 7% plus inflation or 10%, whichever is less.

Rent regulation is often paired with just-cause eviction rules. Without them, a landlord could evict a tenant in order to reset the rent.

Criticisms and Limitations

The evidence is mixed. In a 2019 study of San Francisco’s 1994 expansion of rent control, economists Rebecca Diamond, Tim McQuade, and Franklin Qian found that covered tenants were more likely to stay at their address and in the city. They also found that affected landlords cut their rental supply by 15% by selling to owner-occupants or redeveloping buildings, which likely pushed up market rents in the long run.

Other critiques are that benefits go to whoever holds a regulated lease, regardless of income, and that caps do nothing to add homes in a housing shortage. Supporters respond that stability itself has value, especially for older and lower-income renters, and that modern caps are designed to limit only unusually large increases.

Whether a city can adopt rent regulation at all depends on state law. According to the NYU Furman Center’s Housing Solutions Lab, a majority of states prohibit or preempt local rent regulation.