Standard Two-Year Lease

Implement a Standard Two-Year Right-to-Renew

Prevent sudden rent increases and eviction without notice by enforcing a standard lease.

Mural in San Francisco (photo by authors)

What's the issue?

Short-term leases can result in displacement and homelessness. Signing no lease at all is an even more unstable situation. As each iteration of the lease expires, landlords may increase rent. This situation results in families unable to plan for their long-term future as they cannot be certain their housing will remain affordable year to year, season to season, or even month to month. Furthermore, short-term leases may dis-incentivize renters from reporting potentially dangerous living conditions to city inspectors as they fear landlord reprisal and eviction.

How can a standard two-year lease help?

Municipalities can respond by requiring a leases to have minimum two-year right-to-renew without a rent increase. Alternatively, they can encourage landlords to adopt model two-year  right-to-renew leases written by the municipality, in exchange for reduced inspection fees or other incentives. Montgomery County, Maryland, offers a suite of model leases in multiple languages. Either way, the owner and renter still have significant leeway to arrive at a mutually agreeable contract; the terms of negotiation are simply more even between the two sides. Residents would have a buffer from the potential of rapidly increasing rents due to rapidly appreciating property values. Landlords would become responsible for shouldering a portion of property tax increases, rather than passing on such expenses to their renters. This policy would have the effect of slowing down rental speculation. In this way, a minimum two-year right-to-renew could aid household planning and housing stability without worry of sudden rent increases or eviction. The proposed Small Business Jobs Survival Act of New York City, which proposes a ten-year minimum for rental leases, inspired this policy.

"The Financial Cost and Benefits of Establishing a Right to Counsel in Eviction Proceedings under Intro 214-A," New York City Bar Association, 2016.

When and where does this policy work best?

This policy works best as a preventative measure implemented before gentrification and displacement become widespread in a particular neighborhood. Low-income residents must have the opportunity to sign a new, affordable lease and therefore benefit from the longer term before landlords have an incentive to attract other tenants. In communities that are already changing, such a policy might not protect low-income residents since new leases may not be offered to them or may not be affordable, and the security this program policy provides is not necessary for higher-income households.

Works best for neighborhoods in early-stage gentrification or receiving displaced persons

What are some possible problems and how can they be addressed?

Landlords might oppose a policy that limits their agency. However, leasing to the same tenant for two years offers some benefits for landlords. Two-year commitments can be so valuable to landlords that they offer rent discounts to renters willing to sign for them. They expend less time and money searching for new tenants and forgoing rent on units that sit vacant for one or two months. In some states, leasing to new tenants also means a new city occupancy inspection, repairs, and a paint job.