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YOUR APARTMENT : There's No Cap on Rent Increase

August 29, 1999|LETA HERMAN | SPECIAL TO THE TIMES

Question: I have lived in the same apartment for more than five years. I've endured a couple of small ($20 to $40) rent increases and even one rent decrease.

Last month my rent was increased almost 23% for my same two-bedroom apartment. The landlord cited "increased market values in the neighborhood" as the reason for this drastic increase. Is this legal? Is there a cap on the amount of one singular increase?

Answer: We renters have to face the fact that the U.S. housing market favors homeowners. It's the American dream, after all.

With a 30-year fixed mortgage on a house or apartment (with a tax break no less), homeowners have the advantage of knowing what their housing costs will be for the next 30 years, give or take a few property tax increases.

But if you rent, you are subject to the whims of the market and the mercy of your landlord.

The exception to this rule is rent control, which sometimes limits allowable rent increases in specific cities. But rent control is a dying concept in this country, as more and more states pass laws that prohibit municipalities from enforcing local rent control laws.

If you have rent control in your city, you should be thankful that your annual rent increases never rise more than a few percentage points. And if you like knowing how much your next increase will be, don't take your good fortune for granted. The forces against rent control are gaining strength everyday.

If you aren't protected under rent control, every time your lease comes up for renewal, your landlord has the right to request an increase of any amount. And you have the right to take the increase or leave.

If you have a month-to-month rental agreement, increases can even occur more frequently, because your landlord has the option to raise the rent every month.

It's unlikely to happen that often, but rents have been known to go up more than once a year with such an agreement.

The only way to avoid the possibility of receiving an outrageous rent increase is to sign a lease for the period of time you plan to stay in the apartment.

But this is tricky for periods of more than two years, because most residential leases are not offered for longer than that (even though it doesn't hurt to ask). And you have to weigh the cost of breaking a long lease if you relocate before the term is up.

Month-to-month agreements make the most sense for people who expect to move in the coming year. Longer leases are good if you're sure you can stay put for a while.

The love-it-or-leave philosophy behind renting puts renters in a vulnerable position: Not knowing what the cost of housing will be in five years is a bit unsettling. And even if you do leave when you receive a seemingly unfair rent increase, it might be difficult to find a comparable apartment for less if the market rate has actually risen as much as your landlord claims.

If you like housing stability, renting just might not be right for you. Renting is great for folks who need flexibility because they move a lot.

Or, if you qualify for low-income housing, you can take advantage of the protections built into Section 8 and other Department of Urban Housing and Development programs.

But if you plan to stick around for many years, you may want to compare the costs of renting versus owning in your area.

Even if you buy an apartment or condo and continue to live like an apartment dweller, you may be better off financially in the long run if you plan to be there for a long time.

Leta Herman is a syndicated columnist. Questions on any aspect of apartment living can be addressed to lherman@shaysnet.com, or Leta Herman, care of Inman News Features, 1250 45th St. Suite 360, Emeryville, CA 94608.

Distributed by Inman News Features.

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