Adapting to Rent Control in 2025

Every rental market faces trends around demand, pricing, and availability. As more consumers continue to be priced out of the housing market, they continue to be renters. As of the end of this year, the U.S. median rent amount was $2,015. It has decreased slightly from its highest mark in May 2023.

That monthly figure has impacted many individuals seeking relief with more affordable housing. State and local governments have stepped in to usher in a new age of rent control. Adapting and adhering to these laws requires a strategic approach for agents working in these markets.

What Is Rent Control?

Rent control is a legal method limiting the amount landlords can charge for rent. It works by restricting year-over-year (y-o-y) increases. The result should be more affordable housing for tenants, especially those at the lower spectrum of income. These laws are put in place to ensure people aren’t priced out of neighborhoods as they become more attractive.

Examples of Rent Control Laws

These regulations are local- or state-driven and vary by jurisdiction. Some examples include:

California rent laws: CA imposes a yearly rent cap on certain residential rental properties at a 5% y-o-y increase plus the local inflation rate. It also vacates a landlord’s ability to evict tenants without “just cause.”

Oregon: The state became the first with statewide rent control in 2019. It prohibits rental increases in excess of 7% per year plus inflation.

District of Columbia: The Rental Housing Act of 1985 established the policy in D.C. Most annual rents can only rise by 2%, plus the Consumer Price Index increase. It also has special considerations for elderly and disabled renters. Their rental costs cannot exceed a 5% upsurge each year.

Cities like New York City and San Francisco also have rent control laws. However, many states explicitly ban the government from intervening and enacting these measures. Overall, there’s a split in states enacting them and prohibiting them.

Yet, there is some momentum behind them becoming more prevalent.

Why Is Rent Control Becoming More Prevalent?

With monthly rental rates rising and many struggling to secure housing, rent control trends have become more popular. They serve as a means to alleviate some of these concerns. In areas where the cost of living and rents are ever-increasing, state and local governments are making moves to support consumers.

As of 2024, over 305 local governments have rent control policies. Each has differences, but they all share the goal of reducing housing instability.

Key Features of Rent Control Policies

While these laws are unique, some aspects are somewhat universal. Most of the rules are administered by a rental board.

In reviewing the many stipulations, these features are common:

• The amount and frequency of rent increases
• Requirements for any special assessments related to repairs or capital improvements
• Just cause eviction measures, which should prevent arbitrary, retaliatory, or discriminatory evictions
• Property habitability standards
• Vacancy control

With these pillars of rent control, they present both opportunities and challenges for agents.

Challenges of Rent Control for Agents

As a real estate agent, you already have many rules and regulations that dictate your work. Rent control is one more component that requires compliance. It can make managing rental properties for clients and delivering revenue cumbersome.

First, it limits availability in many markets. Tenants living in rent-controlled properties aren’t likely to turn over quickly. If you’re in a city with high demand for rentals, there’s likely already a short supply. It could dissuade people from moving to the area or simply price more people out. In these scenarios, there’s not much you can do to assist tenants.

Second, the reduced supply can also reduce rental profitability. If owners are unable to achieve the profit margin they expect, they may convert the property to a short-term rental, taking it off the rental market.

A third challenge is that rent-controlled units often don’t get upgrades or renovations. Owners cannot afford to invest, nor do they have the motivation to do so. Thus, these houses and apartments are deteriorating and lack the amenities that consumers desire. Marketing them should they become available will be hard.

A final issue is how rent control can impact new construction. Developers may nix plans for new multi-family units if these laws are on the books. They look at profit optimization and may decide it’s a no-go for these markets. It’s especially concerning for high-density cities where housing is already scarce.

Challenges are a given if you’re operating in these areas. However, you can employ strategies that turn the situation into an opportunity.

What Strategies Can Agents Use to Adapt to Rent-Controlled Markets?

You’ve had to adapt to many real estate trends in the past few years, from tight markets to higher interest rates to changing migration patterns. As such, you can find the opportunity in your regulated market. Consider these approaches for dealing with rent control laws.

Understand Applicable Laws

To develop a strategy that helps you adapt, you first need to know everything about the laws governing your city or state. Read expert analysis by trusted sources like policy groups or real estate attorneys.

Keep informed about these laws, as well, because rental boards can recommend changes that impact property management.

Build a Niche in Rent-Controlled Properties

Specializing in a specific type of real estate can be a revenue generator. Consider making this your niche. You’ve already gained the knowledge. Now, use it to put together a book of business for these properties.

Market your services accordingly to property owners and landlords by making it a part of your website and online presence. The commissions may be less than properties not under rent control, but you have the chance to gain quantity.

In addition to helping the owner side, you can also market yourself to the most price-sensitive groups like retirees or low-income families.

One way to find opportunities to foster your niche is to use data analytics. Analyze market trends and the rate of vacancies to support these efforts.

Focus on Identifying Stable, Long-Term Renters

Since these properties are less likely to turnover, you need to find tenants who are financially qualified and are low risk. The best way to do that is with tenant screening. It allows you to review someone’s credit, criminal history, past evictions, and verifiable income.

With this information, you get the full picture of a prospective renter and can be confident in those approved.

Rent Control Is an Opportunity, Not an Obstacle

There’s no doubt that in the industry, rent control elicits lots of passionate responses on both sides. The objective has always been to ensure fairness in the rental market. However, it can also worsen the challenges of supply and demand.

Looking at it from both angles and using the strategies above can yield opportunities for your business. Follow the laws and become an expert so you can capitalize on this expertise. The result could be an uptick in rental property commissions while placing reliable tenants for your clients.