Rent control is a set of local or state laws that cap how much you can raise rent on a covered unit and, in many places, limit when and why you can end a tenancy. Whether your property is covered, what the annual cap is, and which units are exempt all vary widely by jurisdiction, so the only number that matters is the one in your own city and state code.
In practice
Say you own a unit renting for $1,800, and the local ordinance caps annual increases at the lesser of a fixed percentage or some multiple of an inflation index. Suppose the cap that year works out to 5 percent. The most you could charge at renewal would be $1,800 plus 5 percent, or $90, for a new rent of $1,890. If the same unit sat in a jurisdiction with no rent control and the market supported it, you might raise to $2,000 or higher. The gap, $110 a month or $1,320 a year, is what the cap costs you on that one door, every year it applies.
The arithmetic is the easy part. The hard part is knowing whether the unit is even covered. Many ordinances exempt newer construction, single-family homes, owner-occupied small buildings, or units already at or below a threshold rent, and the exemptions are where landlords get tripped up. Read the statute, not a summary, before you write any renewal number.
Why it matters to a small landlord
If you own in a covered area, rent control sets a ceiling on your rent growth that compounds over years, and it often changes your eviction and non-renewal options too, since good-cause eviction rules frequently travel with the rent cap. That means a below-market unit can stay below market for a long time, which feeds directly into how much to raise rent each year and whether a raise is even worth the turnover risk. Before you buy in an unfamiliar market, check the local rules the same way you would check rent comps, because a cap you did not price in can quietly erode the return you underwrote.
Rent control rarely acts alone. It interacts with month-to-month tenancy, since some ordinances restrict converting or ending a tenancy at will, and with the notice to vacate rules that govern how and when you can ask a tenant to leave. Pair it with a current read of your rent comps so you know both the ceiling the law sets and the ceiling the market sets, and price your property to the lower of the two.