I've lived in the same house for the last four years, and until a few weeks ago, I would have told you I have a great relationship with my landlord. But about three weeks ago, I opened up our new lease agreement to see that my landlord had increased rent by $855 a month for a month-to-month lease (or $605 a month for a 12-month lease), so I'm not feeling like we're actually that close anymore.
I live in Austin, Texas, one of those cities that is perpetually on those "best places in the US to live" lists. For the past 20 years, Austin has been growing, but in the last five years, it has really BOOMED. Oracle moved its headquarters here. Elon Musk moved here and has opened a Tesla factory here. And everyone from influencers like Joe Rogan to The Skinny Confidential's Lauren Evarts Bosstick have relocated here.
And the cost of living has gone up. Like, a lot.
Rent in Austin increased 35% overall in the last year alone, the second highest in the country. The national average was a 15% increase, making Austin a particularly expensive place to live.
And as of March 2022, the median home price in Austin is $624,000, according to the Austin Board of Realtors. So while people often say "Just buy a house!" to escape high rent, you'd need around $124,800 for a 20% down payment in Austin.
Or people tell me to "move somewhere cheaper." But where exactly is that? Rents went up in 48 states last year, and housing prices are up in every single state. Unless I can move in with you, this isn't helpful "advice."
My partner and I would need a month-to-month lease if we stayed here, as we'll be moving in August. When I posted about this rent increase on my Instagram, the number one question I got was "Isn't this illegal? Aren't there limits on how much landlords can raise rent?"
Not in Texas. Or even in Austin, even though it's the blue dot in the red sea. In fact, only six states have rent control laws, and only in California, Oregon, and the District of Columbia do the rent control laws apply across the whole state. (New York, New Jersey, Maine, and Maryland all have city-specific but no statewide rent control laws.)
I asked Brian Carberry, Managing Editor for Rent.com, about these kinds of rent hikes. "Unfortunately, it's a landlord's market right now due to the competition and demand for apartments. But even with increases, if they are still attracting and leasing to tenants, then they are priced where they should be."
Right now, it's a landlords market due to the housing crisis across the US. Affordable housing is in short supply because of restrictive zoning laws, supply chain issues delaying new builds, Covid-related housing demand, and people staying in their home for longer. It's a mixed cocktail with a hell of a hangover.
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Brian Carberry does recommend negotiating with your landlord if your rent is going up. "Not all landlords are willing to negotiate, but you can try to sign a 24-month lease and lock in the rate now to avoid any future increases (or even see if they'll cut you a slight break on monthly rent for agreeing to a 2-year term)."
"Additionally, look at the amenities that may be included with your lease. If you live in an area where parking is at a premium and you don't need a parking space, try to see if your landlord will reduce your rent in exchange for giving up your parking spot. They will be able to upsell another tenant with additional parking. Again, many landlords may not be willing to budge, but it never hurts to ask," says Brian.
Ultimately, the power dynamics between renters and landlords often fall in the landlords' favor. To see tangible change, we need to change the structure of housing, and we do that by getting involved politically, especially on the local level. Millennials are the largest generation but hold a tiny amount of wealth and political power.
You can run for local office to help change zoning laws. You might also look up organizations like She Should Run that help candidates who are new to politics build a campaign. And keep up with local elections so you can cast your vote in favor of propositions and candidates that support creating more affordable housing.
As for me, I'll be leaving my current house in May, in part because of this rent increase. And I'll be joining the many Americans looking for cheaper rent somewhere else.
Has your rent gone up recently? Share how rent hikes are affecting you in the comments.
And for more stories about life and money, like these outdated money rules you should leave in the past, check out the rest of our personal finance posts.