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You thought you were about to get a break following the worst of the pandemic, but instead, rents are increasing across the country. Gah! If your lease is renewing soon, you might be in for an unpleasant surprise when it includes a rent increase notice. Here’s what’s going on: what to do about a rent increase.
Why are rents going up so fast?
According to the Apartment List National Rent Report, we saw median rents increase by 17.8% from January to November. That’s compared to an average 2.6% increase over the same pre-pandemic period from 2017 to 2019. Sun Belt cities like Phoenix are seeing some of the most brutal jumps, where rent for a one-bedroom apartment was up 22% year-over-year. Ouch.
Landlords everywhere are including rent increase notices ahead of renewals. Here’s why they’re raising rent:
- Inflation. It’s not just the cost of your bananas or toilet paper going up. For landlords, the costs for labor, utilities, construction, and taxes have risen, too. Some of these costs are passed along to you in the form of rent increases.
- Lack of economic recovery. Many landlords were hit pretty hard during Covid with tenants who were unable to pay. And rent relief has not made it to everyone yet. This could also be influencing a rent hike.
- Supply and demand. New apartment construction over the last five years was at an all-time low. And, with houses skyrocketing in price, there are one million more renter households today than there were at the end of the second quarter of 2020 according to Realtors data. With more demand than supply, prices are going to keep going up.
Are there any protections for me as a renter?
Maybe. The majority of the US prohibits rent increase bans. However, some cities have existing rent increase limits and a few others are considering renter protections to help temper rent hikes.
In Oregon, most rent hikes are limited to 7%, plus inflation. Santa Ana, California, passed a bill in October limiting rent increases in most buildings to no more than 3% during any 12-month period, or 80% of the consumer price index change for the year, whichever is less. St. Paul, Minnesota recently voted in favor of limiting rent increases to 3% per year.
Many people fear that rent increase bans protect the lucky tenants who score a protected apartment but leave others worse off because property owners are less inclined to invest and build more. With fewer rental units available, it means demand is in the landlord’s favor and rents will likely increase.
Tips for dealing with a rent hike
1. Know your renters rights
Check your city and jurisdiction to understand your renters rights. Perhaps there is rent control or a rent board in your area. Some cities like Seattle, Washington require landlords to give 180-day notice to their residents before any rent increase.
2. Check your lease
While many landlords can raise your rent at lease renewal as much as they’d like, some have to provide you with notice. If so, your lease should provide details about how much advance notice you will receive. It may also include details about how much.
3. Check and compare your options
As much as we may not like rent increases, we know the grass isn’t necessarily greener elsewhere. Still, it doesn’t hurt to take a look at the market. Are similar apartments going for less or about the same? If you feel like a move is your best bet, make sure you factor in the cost of moving, as well as any additional costs (for example, if you’ll spend more on gas to get to work).
The spike in rent increases will likely mean more Americans spend more than 30% of their monthly income on rent. This can put pressure on your finances and may require you to do some budget adjustments if you can.
4. Talk to your property manager
It’s always worth a conversation to see if there are opportunities to postpone the rent increase. Your property manager may be more open to this option with a two-year lease renewal. Alternatively, you can talk to them about any upcoming openings for a smaller or lower-cost unit.
5. Ask for an upgrade
When a rent increase is unavoidable, see if you can get more for your money. Is there a nicer unit opening up at the same price? Is your apartment due for a fresh coat of paint or a new oven? Your property has a maintenance schedule for each unit, so letting your property manager know that improvements are important to you may help them prioritize your unit. You win by getting the upgrade sooner, and they win by keeping you as a good-paying tenant longer.
6. Time for a roommate?
If you can’t avoid a rent increase and need to minimize the impact on your finances, consider a roommate. You can reduce your rent expense by at least half, which can really help you manage other rising costs.
To find a good roommate, take a quick read through our roommate guide. Our guide will help you make sure you can find, screen, and select someone who fits your living style.
If you already live with other people and pay different amounts of rent based on room size, consider talking to your roommates about moving into a smaller room. If they aren’t as impacted by the rent increase as you are, they may be willing to swap to keep you as a roommate.
7. There’s always a side hustle
Taking on another job may not be your first choice, especially if you have kids and need to juggle childcare. But sometimes taking on a side hustle for a couple of hours a week may be just enough to cover your rent increase.
Depending on the type of job, you can make as much as $25 an hour and the hours are typically pretty flexible. Check out our top picks for side hustles for more information.
Stay ahead of rent increase notices
Receiving a rent increase notice can be stressful. The key to managing the change is to gather as much information as you can, talk with your property manager about your options, and come up with a game plan. This will help you understand why and when your landlord can increase rent and what you can do to weather the change.
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