If you live in New York, you probably have heard the terms "rent-controlled" and "rent-stabilized" apartments. Each one has a purpose, but do you really know the difference? The difference is important and dictates the rate at which the landlord can rent the property.
Rent regulation is in place in New York, because the city government wants to make sure that New Yorkers don't get priced out of the market. Rent control began in 1920 because there was a housing shortage and high prices during World War I. To help keep costs down, the New York State Legislature passed the rent-control program.
Rent-controlled apartments aren't really a thing today unless you inherit the property from a family member. For instance, if your grandmother lives in an apartment that is $500 a month, you can inherit that apartment and the controlled rental rate when she passes away or moves. However, you'll need to have lived in the apartment for at least two years prior to that person's death or vacancy. There are around 27,000 rent-controlled apartments in the state, many of which are occupied by the elderly, their successors and the low-income population.
Rent-stabilized apartments are different. These are apartments in buildings created before 1974. They have to contain at least six units. If the qualifications are met, they usually have a lease of $2,700 or less each month. There are limits on how much a landlord can increase the rent and a guaranteed right to renew for tenants.
These are a few differences between rent-controlled and rent-stabilized buildings. Choosing the right one to live in or own could help you plan your budget.