This Is How Much the Average Rent Increases Per Year (2023)

Real Estate

by Gina Vaynshteyn

Gina Vaynshteyn

Gina is a writer and editor living in Los Angeles with her husband and two cats. She recently just bought a house, so she spends her free time googling rugs, accent wall colors, and how to keep an orange tree alive. She used to run HelloGiggles.com, and has also written for places like Health, PEOPLE, SheKnows, Racked, The Rumpus, Bustle, LA Mag, and more.

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While there are some laws in place that help protect tenants from drastic rent increases—or at least laws that help cushion the blow—the truth is that we’re mostly at the will of our landlords. Luckily, in the seven years I’ve been renting, I’ve only had my rent bumped up twice, each time by only a hundred bucks or so—and both times felt reasonable. How much your landlord can increase your rent depends on a few factors.

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I know my situation is a lucky one—many times, landlords make some changes to your rent amount that you won’t agree with. But what is reasonable to expect—and what can you do if a rent hike is unreasonable? I spoke with real estate professionals from across the country to get the answer. Here’s everything you need to know about rent increases.

First thing first: What is the average rent increase per year by percentage?

“As a tenant, expect the rent to increase with inflation, about three percent per year,” says Martin Eiden, a real estate agent with Compass in New York City. Does that number sound familiar? Yes, that’s why the cost of living adjustments are also, on average, around three percent.

How often can a landlord increase your rent?

Luckily, landlords aren’t allowed to hike up your rent whenever they want. Legally, they have to wait until your lease expires. If you signed a one-year lease, then they have to wait a full year before asking for more money. The same goes for a two-year lease (and so on). But if you’re renting month-to-month, a landlord is technically allowed to increase the rent at the end of each month if they want.

So, you’re coming up on month 11 of your year lease. Will your landlord raise the rent?

Maybe, maybe not. Wait until they give you the new lease (or email you to inquire about lease renewal), and then see if they also send you a notice about your new rent amount.

(Video) Rent Prices Expected To Increase Another 10 Percent In Next Year

“If there is an increase, and you don’t like it, bring it up [when you get the new lease],” says Eiden. “Landlords are very calculating about rent increases. They balance raising the rent (or not) and you staying against raising the rent, expecting you to move out and someone else to move in.”

Eiden says that tenants in New York City can expect their rent to increase with inflation, which landlords usually translate as three percent per year.

Exactly how much can a landlord increase your rent?

This depends on your city. Many cities have no rent control, meaning there’s no limit to how much a landlord can increase the rent. They can decide instead of paying $1,145/month, their tenants should pay $2,725/month (which is something that’s actually happening in many parts of California like L.A.’s Inglewood).

Many cities do have laws around when a landlord must tell a tenant that the rent is increasing. For example, as of January 2001, per L.A.’s Housing Rights Center, an L.A. landlord has to give their tenant at least a 30-day notice if there’s a 10 percent (or less) increase in rent, and a 60-day notice if it’s greater than 10 percent.

This theoretically helps protect the renter to an extent—if the landlord decides on significantly hiking up the price of rent, at least the renter has some time to find new housing before the new rental agreement is implemented. You can look up this information through your city’s housing authority.

If you live in a city with rent control, or a rent-controlled home, your landlord has restrictions on how much they can increase rent. Some cities in California allow rent control, whereas others don’t.

Not sure if your home should be rent-controlled? The only way to find out is to look it up and see if your city has any specific laws. The city of Los Angeles, for instance, dictates that if your home was built before 1978, your landlord can only raise the rent by a certain percentage (the amount completely depends on what kind of home you live in and what kinds of utilities your landlord provides you with).

(Video) Why rents are dramatically increasing across the United States

Why would your landlord raise the rent?

The most common reason why your landlord would increase rent is because of the costs to upkeep the property. “Fixed costs for the landlord are a major factor in increasing rent. They include labor and energy,” Eiden says. Maybe your building needs a new roof, or perhaps the courtyard needs a makeover.

Other common factors include an increase in property taxes or just rising costs in the neighborhood. “An increase in rent happens as a result of market conditions at the time that your lease is set to expire,” says Becki Danchik at Warburg Realty in New York City. “Unless the market has plummeted, there will probably be a rent increase.”

Can you negotiate with your landlord?

You can definitely talk to your landlord about rent and even use the fact that you’re a great tenant as leverage. It’s not a lot to work with since your landlord has the upper hand in this situation, but you can try to prove to them that you’re a tenant worth keeping (without an increase in rent).

For instance, according to Apartment Guide, you could offer a longer lease term in exchange for the original rent. For the landlord, a responsible tenant who signs a longer lease could be an attractive offer—that way, they wouldn’t have to worry about finding a new tenant (who could be a nightmare, or leave just after a year, etc.).

The best way to communicate this is through a letter or email, so it’s all in writing. “If the tenant feels the landlord is raising the rent too high, write the landlord a letter in an effort to negotiate the rental rate down by sharing current market and comparable data,” says Karen Kostiw at Warburg Realty in New York City. In that letter, you should add the part about why you’ve been an awesome tenant, emphasizing the costs of finding a new tenant.

If your landlord punitively raises rent, this would be illegal, according to Realtor.com. Let’s say you had to take your landlord to court because they wouldn’t provide heat (heat is something must landlords must provide) for three months, and the moment your one-year lease is up, they hike up your rent.

If you feel like the increase in rent is a form of revenge, you need the receipts (i.e., texts or emails) to back that up. However, the ill motive behind the increase in rent will be hard to prove.

(Video) Should you INCREASE your RENT every year?

Danchik states, “There is not much room for recourse in this situation. But a renter should have a conversation with their landlord if they feel that the reason behind a rent increase is unjust and attempt to come to an agreement.” And if you don’t come to an agreement? Danchik suggests finding an attorney.

If that’s not something you have the budget or time for, try to move out. “The best revenge is to move out and let the landlord sit on an empty property,” says Eiden.

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FAQs

How much can a landlord increase rent 2022? ›

Changes to your rent

This year, the rules say rents can be increased by last September's Consumer Price Index (CPI), plus an extra 1%. The CPI is a common measure of inflation and in September 2021 was 3.1%. This means that most rents will increase by 4.1% from April 2022.

How much should rent rise each year? ›

4. As a landlord and letting agent, I automatically put the rent up each year by 3-5% to cover inflation, mortgage interest increases and repair/maintenance costs.

What's the most a landlord can increase rent? ›

The Tenant Protection Act of 2019 (AB 1482) restricts rent increases in any 12-month period to no more than 5% plus the percentage change in the cost of living (CPI), or 10%, whichever is lower. For increases that take effect on or after Aug. 1, 2022, due to inflation, all the applicable CPIs are 5% or greater.

How do I inform my tenants rent increase? ›

How Do I Tell My Tenant I Need to Raise the Rent?
  1. Remember you're a business. ...
  2. Do your research. ...
  3. Raise the rent all at once or incrementally. ...
  4. Don't negotiate or ask tenants what they think a fair rent increase would be. ...
  5. Be courteous and firm. ...
  6. Find a template you like. ...
  7. Send a formal letter by certified mail.

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