It’s not just home prices that are rising to wild levels in 2021. Rents are following them up, and some tenants say higher rates may force them to move.
Barbara Hill-Kelley is among the many tenants hit with rent hikes this year. She opened her door the other day to find a note posted that her rent was going up — way up.
“They’re crazy,” she said. “I said, ‘There’s got to be a mistake.'”
But it was no mistake. According to the note from the leasing office, the complex is raising her rent to $875 a month — an additional $117 a month for her two-bedroom apartment.
The rate hike comes despite the fact that her 1970s-era complex — with wood visibly peeling on its decks — has not been updated in years.
“That’s crazy; that’s an additional $1,200 per year,” said Hill-Kelley, a home health aide.
Stories like Hill-Kelley’s are taking place nationwide, as the red-hot housing market spills over into the rental market.
What Options Tenants Have
So what can you do if your landlord hits you with a 10% or 15% rent hike?
The good news is they can’t raise the rent when a tenant is under a lease. But when the lease is up, landlords can raise it with just 30 days’ notice, according to Nick DiNardo, an attorney at the Legal Aid Society.
“With the exception of New York City, Chicago and a handful of other cities, there is no rent control in most areas,” he said. “So, technically, the landlord can raise the rent as much as they want to.”
DiNardo suggests tenants use sugar, not spice, to try to get the rent hike reduced. He also suggests that renters explain why they can’t afford the hike.
“What we usually tell people is the best thing to do in this circumstance is try to negotiate something from the landlord,” he said.
Many landlords would rather reduce a rent hike by a few dollars than have to take the time and expense to clean the apartment and find a new tenant, DiNardo said.
Rents Hitting All-Time Highs In 2021
According to real estate analysts Yardi Matrix, these are the biggest reasons for the increases:
- High demand from home-buyers who can no longer find affordable homes to buy. This is especially impacting the rental home market, where rents have risen even faster than apartments.
- Rising management and maintenance costs
- Property tax hikes hitting landlords hard
As for Hill-Kelley’s case, a representative for the management company said they would be rehabbing her aging kitchen as part of the rent increase.
Still, Hill-Kelley and her husband worry that they may have to move to a cheaper apartment.
“I’m gonna have to work more, and we’re gonna have to save, from now until July, to move,” she said.
Caution About Month-To-Month Leases
Many tenants like month-to-month leases, which give them flexibility.
But Legal Aid says renters should realize that they have no way to prevent a sudden rent hike during these volatile times for renting.
So, you may want to lock in for a year for some peace of mind, so you don’t waste your money.