Increases and Limitations

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 Year                       CPI-U  Maximum Rent Increase   Allowance
 2025  2.7%  5.7%
 2024  3.3%  6%
 

Each year, DHCA sets the annual rent increase allowance for rent-stabilized units based on the Consumer Price Index for All Urban Consumers for the Washington-Arlington-Alexandria Area (CPI-U).
The allowable rent increase is calculated as either:

  • CPI-U +3%, or
  • A flat 6%, whichever is lower.
These rates are effective from July 1 through June 30 of the following year.
For the current period:
  • CPI-U is 2.7%
  • Maximum allowable rent increase is 5.7%
  • These rates remain in effect until June 30, 2026.

Rent Increase Limits

  • Rent for regulated units may only be increased once every 12 months.
  • Increases can only occur at lease renewal or when signing a new lease.
  • For multi-year leases, the rent must remain unchanged throughout the lease term – mid-lease increases are not allowed.

Troubled or At-Risk Properties

Landlords of properties listed on Montgomery County’s Troubled or At-Risk Properties Report may not increase the rent until the designation is removed.
To learn more about the requirements for removing this designation, please refer to COMCOR 29.40.01 Troubled Properties. If a landlord is unable to correct code violations, they may submit a Fair Return Application.

Banked Rent

Anytime a landlord does not implement the full rent increase allowance, the unused portion is “banked” for future use. Banked rent is specific to each individual unit and does not expire. When utilizing banked rent, the total increase (rent increase allowance + banked rent) may not exceed 10% of the current rent.
Common scenarios for banked rent:
  1. Increasing rent by less than the allowable amount.
  2. Implementing no increase (0%).
  3. The tenant has signed a multi-year lease, which prohibits mid-lease increases.
Example:
  • A regulated unit has a current rent of $2100.
  • The allowable rent increase is 6%, which is $126.
  • The landlord chooses to increase the rent by only 5%, which is $105.
  • The unused $21 becomes banked rent, which can be applied to a future rent increase.

In General

Upon a lease renewal or a new lease agreement, a landlord may increase the rent of a regulated unit by no more than:
  1. The base rent; plus
  2. The rent increase allowance; plus
  3. Any banked amount; and
  4. Cannot be more than 10% of the base rent

Notice Requirements

For both regulated and exempt units, landlords must provide a written 90-day notice before increasing rent. This notice must be delivered by US mail or in person with a signed receipt.
For detailed guidance, refer to page 21 of DHCA’s Office of Landlord-Tenant Affairs (OLTA) Landlord-Tenant Handbook . Sample rent increase notices are available on the Applications and Forms page.

Relevant Law and Regulation

*Rental units exempt from rent stabilization in the County are strongly encouraged to limit rent increases to the VRG. The VRG is mandatory for rental units regulated under the Moderately Priced Dwelling Unit (MPDU) Program and other regulatory agreements. *