When news broke last week that a San Francisco woman’s rent was increasing by 400% (yes, you read that right, 400%), we all clutched our pearls and muttered through clenched jaws, “Only in the Bay Area.”
Except it’s not.
While the Bernal Heights woman’s situation is somewhat nuanced and unique (her place had been rent-controlled, but the landlord got the building rezoned so those regulations would no longer apply), the issue of skyrocketing rent is affecting people across the country.
In 2014, rents nationwide increased an average of 3.6%, and nearly 11% over the past three years, according to Freddie Mac. Another study last week from the National Association of Realtors® shows that cities across the nation are seeing rent growth far exceeding wages.
In New York, for example, rents have increased 50.7% since 2009. In San Jose, it’s nearly 26%. And even in America’s heartland––St. Louis––it’s a 22.3% increase.
For me, the issue hits close to home. I’m a Bay Area renter whose monthly costs went up nearly 25% last year. In my sticker shock, I called the local Fair Housing office, where I was told by a volunteer, “Sometimes housing isn’t fair.” Ain’t that the truth.
I ended up resigning myself to last year’s rent increase. A move within the Bay Area would only mean trading one expensive apartment for another, and as a singleton, I certainly wasn’t in a position yet to dump my rental digs and buy.
This year, however, my neighbors and I are facing the same quandary—rents are rising again (by 25% if I want to continue month to month, or by 10% if I lock into a yearlong lease). I don’t particularly care for either option.
And so, for my own sake and for America’s, we’re asking: What does happen when your landlord jacks up your rent? What’s a fair rent increase? An unfair increase? And what’s downright illegal?
Landlords can raise your rent as much as they want
First thing’s first, let’s be clear that we’re not talking about rent control here. Rent-controlled and rent-stabilized areas are pretty rare, are governed on the local level, and have rules around how often and how much rent can be increased.
With that out of the way, let’s get to the arguably more complicated topic of non-rent-controlled areas, which make up most of the nation’s rental market.
Rentals in these places are subject to whatever the market will bear. While it doesn’t feel fair, landlords are often perfectly within their rights to raise your rent, says Nick Emanuel, a San Jose attorney who specializes in real estate litigation and landlord tenant law.
“It’s precisely the reason for rent-control laws,” Emanuel said. “It may be the case the market will bear a drastic increase and a landlord will be able to get a tenant at that price. But what that does, for all intents and purposes, is make that area unaffordable.”
The hard truth is: Short of locking yourself into a longer lease or buying a home, there’s little you can do to control your costs as a renter.
With that knowledge in mind, it was time for me to look at my budget and see if I could afford to buy. I met with a mortgage lender, and I crunched the numbers in our site’s mortgage calculator. It would take every cent I have––and I’d still be left with monthly payments I can’t afford. My choices seemed bleak.
Even in non-rent-controlled areas, landlords do have limitations on how and when they can raise the rent, Emanuel noted.
Just as you’re tied down by your lease, so is your landlord. A landlord can raise the rent only when your lease expires and with the appropriate amount of notice (if you’re month-to-month, the landlord could conceivably increase your rent at the end of any month). Unlike rent-controlled areas, there is no cap on the amount a landlord can increase your rent.
The exception to all of this is if there’s a question of legality––specifically, discrimination or retaliation, Emanuel said. Many of the cases that cross his desk are illegal rent increases based on retaliation (say, for example, your landlord didn’t like that toilet-repair request you made, or that stinging article you wrote about your rent going up 25%). Then you might very well have a case.
If a lease is in effect, you’ll want to make sure any rental increases don’t violate the terms of the lease. The longer your lease, the longer a landlord has to wait to implement a rent increase.
“As a landlord, I’d want to make awful sure I’m in compliance of all aspects of the law before I raised rents to such a degree it would cause a tenant to look at their legal options,” Emanuel said.
But if you just think the increase feels like too much, you probably don’t have much legal basis for a claim, experts say.
“They get to determine the prices, and you get to determine whether you’d like to live there,” said Robert Collins, deputy director of the San Francisco Rent Board.
What you (and I) can do
If you’ve done your research on the market, negotiated with your landlord, and the increase still feels out of line, try contacting a real estate lawyer or a housing mediation service, which have staff on hand to step in and investigate. There’s no nationwide database of such services, so you’ll have to Google around to find them.
You can also try to lobby your local officials to enact a rent-control ordinance. (Beware, though, that rent ordinances aren’t always a silver bullet––they sound pretty great until you consider the fact that in some places, such as New York City, the cost of rent-stabilized units is increasing faster than that of their market-rate counterparts.)
Community members pushed recently for rent control in my city, but local officials seem to favor increasing housing stock over enacting laws.
I know it’s the price I have to pay for living in a tech
bubble hot spot. The market can bear that 25% rent increase, and so it will. In the end, I chose to ride out one more year in my apartment and save like crazy.
Maybe this time next year, I can say hello to homeownership and goodbye to my landlord—for good.