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Understanding Rent Controls

Apartment Living
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Rent controls is a subject that many people have heard of in high rent areas of the country, especially the New York City metro area. Rent controlled apartments are sort of a holy grail for city dwellers – affordable apartments that have not increased in price for many years before, because as long as one tenant stays in the apartment, the maximum yearly price increase is kept to a minimum. Rent controlled apartments have even been the subject of jokes on sitcoms such as “Seinfeld,” and “Friends.” But, how do rent controls really work, and are rent controlled apartments really as desirable as they sound?

How do Rent Controls Work?

First things first, rent controlled apartments are probably not the amazing deals that they have been made out to be. Basically, rent controls work by the following principal: a building or certain section of a building is set up as a rent controlled area, where the maximum annual increase in rent is limited. Many of these apartments are set aside for low income or medium income residents, and they do not often come to the market because the people living there typically tend to stay there for a very long period of time, in many cases because they cannot afford to move anywhere else inside the city.

Rent controlled apartments that are not in areas specifically set aside for low income or medium income people will come to the market at the current market rate after the present tenant leaves, but after you sign the initial lease, your yearly rent increases will be capped in the same way that it was for the previous tenant. So in this way, a rent controlled building is desirable because you can be sure that your rent will never increase above a certain amount, but you may not be able to get the same low rate that the previous tenant had.

In some cases, it is even possible to sublet a rent controlled apartment, but the process may or may not be legal and subletting may not even possible unless you can find someone who is willing to sublet their rent controlled apartment to you. The best chance you have of getting into a rent controlled apartment is to attempt to get on one of the waiting lists that come up each year for buildings that will be set aside for low and medium income renters, but even this method isn’t foolproof, as the waiting lists for apartments covered by rent controls are long and not everyone gets in.

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