Letters from your landlord or management company rarely bring good news, especially when your lease is due for renewal. And with rents shooting up all across the city, you have good reason to be nervous your landlord is going to jack up the rent. You probably already feel like you pay too much in rent so how are you going to deal with an increase? And besides all that, what’s a fair rent increase anyway?

hipster in coffee shopFor starters, a rent hike is not inevitable — especially if you’ve lived in the apartment for a long time and have an established relationship with your landlord. Additionally, your rent is less likely to increase if you live in a neighborhood that is not in the midst of gentrification or seeing rapidly increasing property values. That it is not to say, however, that rent increases are unusual.

If you live in a market-rate apartment (i.e., one that is not rent-stabilized or rent-controlled), your landlord can increase your rent any amount he wishes when your lease is up for renewal. (Note: It is illegal for him to increase your rent during the term of the lease – only when it is set to renew.) If your landlord has made significant improvements to the building or to your apartment, you can expect to see a larger increase.

If you’ve been a lousy tenant, late with your rent, incurring lots of complaints etc., your landlord is probably itching to sock you with a monster rent hike. Habitual blasters of bass and hosts of house parties be forewarned!

In most scenarios, tenants see an increase of 3-6 percent in their rent. If you’ve lived in the apartment for a while without seeing a rent increase you might be hit with an increase of upwards of 10 percent to bring it up to market-rate level. Large increases are also more common if you negotiated the rent down when you moved in.

Negotiation tactics for rent increases

So, you got the dread letter and boom – you’ve been hit with a 10 percent rent increase. What can you do about it? You could move, but think about the costs of moving in relation to the annual increase in rent. Do you swallow the higher monthly rent? Or move only to face broker fees, security deposits and the cost of moving? Do the math. Calculate the costs of finding and moving into an apartment that costs less than or equal to what you currently pay versus the cost of paying the increased rent each month.

Or, you can negotiate!

Strategy No. 1: Threaten to move

If you threaten to move, your landlord will lose at least a month of rent as the apartment will likely be vacant between the time you move out and the next tenant moves in. How does the increase in rent he is proposing compare to the money he will lose on a vacant apartment if you move out? If the increase in your rent is smaller than what he will lose if the apartment sits vacant for a month, then your threats to move out will not convince him to negotiate. On the other hand, if the increase in rent that he’s proposing is greater than the amount he’d lose if the apartment was vacant for a month, then you’ve got some negotiating power and can try to get him to reduce the increase.

To help determine the impact your departure could have on your landlord, do some sleuthing. Check on StreetEasy to see whether other apartments in your building are up for rent. Talk to your neighbors to see if they have information on upcoming vacancies. You can also check on StreetEasy to see if other apartments in your building or in your neighborhood have seen sizable increases in rent to predict how large your own rent increase will be. More information translates to more power in negotiating.

Strategy No. 2: Propose a longer term of lease

So you did the math and it doesn’t make sense for you to move out given the moving costs and broker fees. You calculated the money your landlord would lose if you moved out and it looks like he has the upper hand even if the apartment sits vacant for a month. Despite all that, what he is proposing is still looking pretty hefty to you. What can you do? Propose accepting his rent hike in exchange for locking in a longer term of lease. This won’t reduce the month burden of a higher rent, but at least it will prevent you from going through the same rigmarole 12 months from now. This would be a wise strategy if you are in a rapidly gentrifying area where there’s a lot of new construction bringing in higher prices and new tenants willing to pay above market value.

Strategy No. 3: Pitch in

If the rent increase your LL proposes is not enough to compel you to leave the apartment or sign a longer lease, you can argue for a smaller rent increase in exchange for pitching in around the building. You can offer to shovel and sweep the sidewalk, manage the garbage removal, tend the window boxes and maintain the upkeep of the building to offset the money your landlord would be pay a super to do this or the time he would invest doing it himself. This strategy is more likely to be effective in small buildings that are not operated by management companies. Before agreeing to this, make sure you both have a clear set of expectations about what your responsibilities will be. Get it in writing.

Rent increases in rent-stabilized apartments

If you live in a rent-stabilized apartment, your landlord is subject to limitations on the amount he can increase your rent. Each year the Rental Guidelines Board of New York determines a new percentage by which landlords of rent stabilized apartments can raise rents on their property. This year it is 1 percent for a one-year lease and 2.75 percent for a two-year lease.