Rent Controlled vs Rent Stabilized

When it comes to renting an apartment, most places are pretty basic. You and landlord basically sign a lease agreement saying you aren’t going to destroy the home, or do anything that might harm the residence (own 15 cats, sell drugs, etc), and if you meet these conditions you may rent the apartment for the agreed upon amount. For the most part, your landlord can’t call you up and change the amount you pay for rent…that’s the whole point of the lease.

Ah, but New York is different. In New York, you will often hear terminology along the lines of “rent controlled” or “rent stabilized.” And while these both sound like exactly the same thing, the fact is, they aren’t.

Rent control originally began in 1947, when soldiers returned from World War II and found that finding a place to live was incredibly competetive. Landlords, eager to take advantage of the competetive market, naturally tried to increase their prices as much as possible; a simple case of supply and demand. Laws soon went into effect, however, making this illegal. Then, when buildings were built after 1947 (until 1974), these new apartments were called rent stabilized. So what’s the difference?

In a rent controlled apartment, the landlord may not charge more for rent than the maximum base rate (MBR). If the landlord is currently charging less than the maximum base rate, he or she may raise the rent once a year until the MBR is reached. Also, in order for an apartment to remain rent controlled, the tenent (or a successor of the tenent, such as a family member) must be continuously living in the apartment since 1971. If the tenent moves out, that apartment is typically no longer rent controlled, or if it part of a unit with more than 6 units, it becomes rent stabilized.

And rent stabilization, unlike rent control, determines the amount the landlord can raise the rent in a given year (which is currently no more than 7.5%). This means your rent should  never exceed the MBR in a rent controlled building, and if it does you have reason to file a grievance with the Division of Housing and Community Renewal (DHCR). A rent stabilized tenent is also able to renew their lease, while a rent controlled landlord has the right to refuse a tenent their lease renewal. Of course, there are many exceptions to these rules, so make sure to do your research when looking at a rent controlled or rent stabilized apartment or house.

And if you’re currently living under rent controlled conditions, you might want to closely examine you budget before considering making a move. You may pay $650 in rent now, but if you were to move out and then move back into the same building your rent could double, if not triple. So if you’re thinking of moving to New York, it might be in your best interest to get in touch with that Great Aunt of yours that’s been living there forever and thinking of making a move to the country.