As a property manager, you may have heard about the concept of rent control or rent stabilization. As it’s a topic that is always going to inspire strong opinions on both sides, we should lead off by saying that it is NOT currently the law in Virginia. Rent control bills have come before the General Assembly during the past three legislative sessions, and each time your Virginia REALTORS^® Government Relations Team has worked with legislators and other interested parties to educate them on the negative economic impacts of rent control laws. As a result, Virginia remains a state that allows the market to control how much landlords can charge for rental properties.

Even though it’s not currently an issue for those landlords and PMs in Virginia, it’s a good idea to have at least a basic understanding of what it is and how it can affect property management.

Rent control is a program administered by the state or local government that limits how much rent a landlord can charge for leasing a home, or how much rent can increase by year over year. Typically, these laws are enacted by localities, but the details of such programs can vary wildly.

According to Investopedia, rent control is found in only 305 municipalities across the country as of 2024. The only states in which these policies are found are California, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, and Washington, D.C. On the other hand, thirty-three states have laws that prohibit local governments from enacting rent control (also as of 2024).

One example of a specific rent control law is the statewide control in effect in Oregon. This law restricts annual rent increases to 7% plus the increase in the consumer price index.

So, why do these laws exist? Tenants (and their advocacy groups) like rent control because it can provide certainty in their year-to-year rent payments. These supporters also argue that rent control can help low-income renters in areas where rental prices are rising far faster than wages.

On the other side, landlords and property managers (as well as most economists) argue that rent control is actually a barrier to economic growth. It can limit the housing supply, as owners can make more money by converting buildings to uses other than rental units. Investors may also be reluctant to invest in rental developments because of a reduced return on their investment. Research shows that buildings in localities with rent control often suffer from deferred maintenance, and the quality of housing actually declines.

So, if the research shows that rent control doesn’t work, what is the alternative? Economists agree that the solution to rising rents is to increase the housing supply. This involves zoning reform on the local level to allow for more development of housing for all income levels and assistance from the state for developers and struggling tenants.

Your Government Relations Team will continue to oppose these bills, as well as any other bills that could harm the real estate industry.