What is Rent Control?
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The following is adapted from the Metropolitan Planning Council fact sheet.
Rent control is a policy to moderate or stabilize rent increases or curb extreme rent hikes by putting limits to the amount a landlord can increase rent from year to year. Generally, rent stabilization is an effective tool for improving housing stability among renters. Depending on the specific policy design, it can also impact housing affordability more broadly
What Are the Components of a Rent Control Policy?
Which buildings are regulated?
To avoid disincentivizing new construction, most policies only regulate units built prior to a certain date, meaning new buildings are not subject to the regulations. They may also grant an exemption for new construction that the policy would not go into effect for those units for a certain period of time. Small landlords are often exempted from the policy as well.
What is allowed for a rent increase?
Rent increases are typically allowed only once annually and are frequently tied to inflation and capped at a certain level. Landlords may be granted freedom to raise rents between tenants. A Supreme Court ruling also holds that landlords must be allowed to make a reasonable profit.
What Does Research Say About Impact?
It prevents displacement and promotes stability for those in regulated units. In San Francisco, CA, people in controlled units are 20% more likely to remain in their units and 4.5% more likely to remain in the city. Rent stabilization could generate significant societal benefits too; people who move for financial reasons are twice as likely to report depression and frequent moves result in lower high school graduation rates.
It does not disincentivize new development by lowering expected returns on investment. There is little evidence that rent stabilization policies impact new construction. Most rent stabilization policies exempt new construction within the last 15 years from regulation.
It may motivate landlords toward condominium conversions and personal occupancy, thus reducing overall rental supply. A study of Cambridge, MA, which repealed rent control and condominium conversion limitations simultaneously in 1994, found that condominium stock increased 32% after repeal, while housing stock decreased by 6%. Effective policy can limit these conversions.
It provides savings for tenants in stabilized apartments. Since rent stabilization helps limit rent increases, it can provide savings for those in rent-stabilized apartments over time. A 2012 study in Cambridge found rents in stabilized units were 44% lower than in non-stabilized units.
It benefits elderly, people of color, and low-income households. Regulated units are disproportionately comprised of people who are elderly, people of color, or low-income. A 2015 study found that cities with rent stabilization had residents with a 25% lower median income and 70% more Black residents.
What is the impact on unit quality?
Washington, D.C. was one of the first jurisdictions to implement rent stabilization. The D.C. policy applies to all units built before 1975, except for small landlords who own no more than four rental units. An estimated 36% of D.C.’s rental homes are rent-stabilized. Under the policy, rents in stabilized units can increase by either the Consumer Price Index (CPI) plus 2% or 10%, whichever is less. For tenants who are elderly or disabled, the allowed annual rent increase is the lesser of either the CPI percentage or 5%.
There is some evidence of a relationship between housing quality and rent regulations. Since investment in maintenance and improvements cannot necessarily be recaptured through increased rents, rent stabilization may act as a disincentive for these projects and ultimately lower the quality of rental stock. However, proactive code enforcement and stronger capital improvement allowances may mitigate this effect.
What is the impact on rents in unregulated units?
Rent stabilization may either increase or decrease rents in non-regulated units, depending on policy design and local context. For example, a 2003 study on New Jersey and California found that regulated cities had 10% lower growth in rents. Meanwhile, a 2018 study on San Francisco found that rent regulation led to a city-wide increase of 5%, likely due to a reduction in rental supply from condominium conversions.
What is the impact on property Values?
Research is mixed; a 2012 study found that eliminating rent stabilization led to a property value increase of 18-25% in regulated units and 12% in non-regulated units. Meanwhile, a 2015 study on 74 regulated and 87 non-regulated cities in New Jersey found that rent regulations had no significant impact on appreciation rates.
Why Should Rent Control Be an Option in Massachusetts?
The following information is taken from the Policy Link and Homes for Families factsheets.
Massachusetts is currently in the midst of a severe housing affordability crisis, with rents continuing to rise. Statewide, rents have increased 65% between 2013-2024. Over 50% of the one million Massachusetts renters pay more than 30% of their income towards rent.
If rent stabilization covered all renters in the private market, 911,000 renter households would be stabilized, including 392,000 rent-burdened households. Rent stabilization would help protect over 227,000 households from homelessness.
Rent stabilization would impact marginalied households. 185,400 stabilized households include at least one senior member. 384,400 stabilized households would be households of color. 635,500 stabilized households would be low-income households, with 434,000 very low-income and 250,000 extremely low-income. Rent stabilization could help correct historical and ongoing racial disparities in housing.
Rent stabilization would impact essential workers. 355,100 renters are essential workers. 145,000 renters are healthcare workers. 130,000 renters are public employees. 125,000 renters are educators and social service providers.
What Would the Proposed Rent Control Bill Do?
The following information is taken from the Homes for Families factsheet.
The proposed rent control bill would allow municipalities to enforce fair and predictable maximum rent increases. It would make Massachusetts less vulnerable to profit-seeking investors who drive up prices and cause displacement. It would help stabilize communities by allowing for longevity in tenancies. It would be just one tool the legislature is pursuing while also pursuing long-term reforms to create more affordable and equitable housing.
The policy would:
Lift the 1994 ban on rent control to allow communities to decide if rent control and just cause eviction fit’s their needs.
Limit rent increases to the rate of inflation, with a cap of 5%. (In 2024, the rate of inflation was 2.9%).
Limit rent increases between tenancies.
Exempt owner-occupied buildings with 4 or fewer units; new construction for 5 years; public and subsidized housing; college/university dorms; and facilities for residential care of the elderly.
Ban “no-fault” evictions and require landlords have a just cause (non-payment, lease violations, refusing to agree to a rent increase or if the landlord seeks to move in to the unit).
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