Allowable Rent Increases
Increases in Rent
Under the Rental Housing Act of 1985, any increase in rent must meet these conditions:
- The new rent charged may not be more than the prior rent plus the allowable increase, as described below.
- The increase in rent cannot be more than the increase allowed under any single section of the Act.
- The last increase in rent must have been at least 12 months ago (unless the unit is vacant).
- The increase must not violate the terms of the lease.
- The housing accommodation must be properly registered with the RACD.
- The rental unit and the housing accommodation’s common elements must be in substantial compliance with housing regulations.
- The housing provider must give a 30-day notice of any increase in rent.
Allowable Rent Increases Based on CPI
The most common allowable increase in rent is an annual adjustment, based on the increase in the Consumer Price Index (CPI). For most tenants, the most that their rent can increase is the CPI percentage plus 2 percent, but not more than 10 percent. For tenants determined by the Rent Administrator to be elderly or disabled, the maximum increase in rent charged is the CPI percentage only, but not more than 5 percent. The CPI percentage that the RHC will use is issued after the end of each calendar year. That percentage applies to the rent-control year -- from May 1 to April 30. Allowable increases based on CPI are sometimes called automatic -- because no petition or other special steps are required.
Other Allowable Rent Increases
A housing provider may also choose to seek a larger allowable increase under other provisions of the Act, including capital improvements, changes in services and facilities, hardship or substantial rehabilitation, or agreement with 70 percent of the tenants. The other allowable increases are not automatic. The housing provider must petition or otherwise seek the consent of the Rent Administrator, and tenants may choose to participate in the process, often at hearings before an examiner. Find out more by visiting Other Allowable Rent Increases.
Rent Increases When a Unit Becomes Vacant
The only exception to the limit of one rent increase per year is when a rental unit becomes vacant. Upon a vacancy the housing provider can raise the rent charged to:
- 10 percent more than was charged to the former tenant, or
- Rent for a comparable rental unit, but not more than 30 percent.
Comparable rental units have essentially the same square footage and floor plan; comparable amenities and equipment; comparable locations with respect to exposure and height; if exposure and height have previously been factors in the amount of rent charged; and comparable physical condition. Once there has been a vacancy increase in rent, the housing provider cannot make another increase in rent for twelve months, even if another vacancy occurs.