Certain rental markets are so competitive and subject to such astronomical rate increases that laws have been put into place that protect tenants from being priced out of their homes. There are 182 cities and municipalities with rent control or rent stabilization laws, mostly in California, New York and New Jersey.
Those rent control laws make it illegal for a landlord to raise rent beyond a certain percentage from year to year. The only exceptions are when a tenant vacates a unit voluntarily or is evicted. At that point, the landlord can raise the rate up to its full market value.
"So, what are some landlords doing in that situation? They're trying to evict for whatever reasons are allowed under the 'just cause' eviction ordinance," says Portman. "If they're successful, then they can re-rent at the newer, hotter, higher rate."
The definition of "just cause" is different in every state. In California, for example, landlords are allowed under state law to force a tenant out if they plan on doing a substantial remodel to the unit. Unless the particular city law says otherwise, the landlord doesn't even have to pull the necessary construction permits before asking the tenant to leave.
"That's a loophole that you can sail the Titanic through," says Portman.
Landlords can also kick out a tenant if the landlord or a qualifying relative plan on moving into the unit themselves, or if they want to switch the unit from residential to commercial. Cities like San Francisco require landlords to prove they followed through on their plan for a set number of years. If not, the tenant is allowed to move back in at their original rate.
HowStuffWorks may earn a small commission from affiliate links in this article.
Originally Published: Apr 6, 2020