New Mexico Rent Control Laws in 2024
Introduction to New Mexico’s Rent Control Laws
New Mexico's Ban on Rent Control
New Mexico is one of approximately 35 states that prohibits cities and counties from enacting rent control laws. Under state law, local governments do not have the authority to regulate how much landlords can charge in rent or limit rent increases. This statewide preemption means there are effectively no limits on how much landlords can raise rents each year in New Mexico.
With rent control banned, landlords have significant power and flexibility when it comes to setting rental rates. They can raise rents as much as they want whenever they choose. Tenant advocates argue this leads to excessive rent hikes that displace low-income residents. However, landlords contend rent control would constrain the housing market. The debate around repealing New Mexico's prohibition has intensified as rents have skyrocketed in cities like Albuquerque and Santa Fe.
Current Rent Control Laws in New Mexico
New Mexico prohibits cities and counties from enacting rent control laws through a preemption in state law. The Rent Control Preemption Act, passed in 1991, states that no municipality or county shall enact any ordinance or resolution that would control or stabilize rent on private residential housing. This effectively bans local governments in New Mexico from imposing rent control measures of any kind.
Unlike some other states that allow cities and counties to regulate rents, New Mexico maintains strict statewide preemption. The lack of local authority over rent control combined with an absence of statewide rent regulations gives landlords enormous power over setting and raising rents. There are currently no limits on how much a landlord can raise the rent each year on rental properties in New Mexico. Landlords have free rein to increase rents as much as the market will bear.
Rent Increase Notice Requirements
New Mexico law requires landlords to provide tenants with 30 days' written notice before increasing rent on a rental unit. This notice period applies to all residential tenancies, including month-to-month agreements.
The written notice must clearly state the new increased amount of rent, and when the increase will take effect. Verbal notices or notifications are not valid.
If a landlord fails to provide the full 30 days' advance notice in writing, the rent increase is considered invalid and unenforceable. Tenants are only obligated to pay the current existing rental rate until proper notice has been delivered.
The notice period starts on the day the tenant receives the written notice. For example, if the landlord provides notice on the 10th of the month that rent will increase on the 1st of the following month, they have not given adequate 30 days' notice.
If the tenant and landlord have a fixed term lease, rent cannot be increased during the lease term unless specifically allowed by the lease. But the landlord can increase the rent to any desired amount upon lease renewal, as long as appropriate notice is provided.
Tenants who receive a rent increase notice should review their rental agreement and verify the landlord is following proper protocol. Failure to comply could provide grounds to contest the increase.
Limits on Rent Increases
New Mexico does not currently limit how often or how much landlords can raise rents on rental properties. This gives landlords a lot of leeway when it comes to increasing rental rates.
Landlords in New Mexico can raise rents as frequently as they want - monthly, quarterly, or multiple times a year. There is no limit on the frequency of rent hikes. In addition, New Mexico has no caps on the amount or percentage that rents can be increased. A landlord could double, triple, or quadruple the rent from one lease term to the next if they wanted to. While large, frequent rent increases may prompt complaints from tenants or lead them to not renew their lease, there are no laws prohibiting such hikes.
The lack of restrictions on rent increases in New Mexico contrasts sharply with places that have rent control laws. In cities with rent stabilization, there are typically limits on how much rents can be raised each year. For example, some cities cap annual rent increases at 5-10% on rent-controlled units. Such policies aim to protect tenants from excessive rent hikes while allowing landlords reasonable increases. But without statewide rent regulations, New Mexico landlords currently face no such constraints when raising rents to maximize profits.
Rent Control in Other States
New Mexico is one of the least tenant-friendly states when it comes to rent regulations. The majority of states allow some form of rent control at the city or county level. For example, New York City has had rent stabilization laws since 1969 that limit rent increases on certain apartments. Landlords in NYC can only raise rents by a percentage set annually by a Rent Guidelines Board. California also permits local governments to enact rent control, leading major cities like Los Angeles, San Francisco, and San Jose to establish rent increase limits and just cause eviction rules. A few other states like Oregon and Washington expressly prohibit rent control statewide like New Mexico does. But many states simply don't address the issue, allowing cities and counties to pass local ordinances regulating rents and tenancy. New Mexico's outright preemption of any form of rent stabilization makes it an outlier nationally, stripping power from local governments to protect tenants from exorbitant rent hikes. This provides a clear motivation for advocates seeking to overturn the statewide ban on rent control.
Arguments For Rent Control
Advocates argue that rent control laws are needed in New Mexico to help stabilize rental prices, protect tenants from excessive rent increases, and promote affordable housing.
With no restrictions on rent increases, landlords have total control over setting and raising rents each year. This has led to many tenants facing rent hikes of 10%, 20% or more when their lease is up for renewal. Such large jumps can price renters out of their homes and force them to constantly move to more affordable apartments every couple of years.
Proponents say enacting rent regulations would limit how much landlords could raise rents annually. For example, tying increases to the consumer price index or limiting them to 5% per year. This would promote housing stability by preventing the huge spikes that can destabilize neighborhoods and disrupt children's schooling.
Stabilizing rents would also make housing more affordable over the long-term, according to advocates. With reasonable caps on rent hikes, a larger share of renters' income could go towards food, healthcare, transportation and saving for the future instead of oversized rent increases. This would reduce economic pressures on working families and seniors on fixed incomes.
Additionally, rent control can prevent landlords from raising rents exorbitantly on existing tenants while charging higher rates for new move-ins. Regulations would restrict this practice and require more equitable rent setting.
Overall, proponents argue that allowing cities to enact rent stabilization policies would protect tenants and ensure more New Mexicans can afford housing without spending over one-third of their income on rent. Rent control provides stability and fairness that is lacking under the status quo, advocates say.
Arguments Against Rent Control
Discourage New Development
One of the most common arguments against rent control is that it discourages new housing development. When rents are capped, developers and landlords have less incentive to invest in building new rental housing.
Rent control reduces profits for rental property owners. With their rental income limited by law, landlords may choose not to construct new apartment buildings if they can't achieve their desired rates of return. Developers need to be able to charge market-rate rents for new construction to be financially feasible.
If rent regulations cause the supply of available rental units to decline, it can make housing shortages and affordability issues worse over time. When the rental housing supply tightens relative to demand, market rents will increase rapidly for any units not subject to caps.
Opponents contend that rent control ordinances deter new construction and exacerbate housing scarcity. If existing landlords can't raise rents sufficiently, they will have less capital to reinvest in maintaining and improving their properties. The quality and quantity of the overall rental housing stock could deteriorate.
Many economists argue that rent control only provides a short-term benefit to current tenants at the expense of future renters. By inhibiting new development, critics say strict rent regulations will ultimately make all housing less affordable. Market incentives and removing barriers to construction are seen as better ways to expand the housing supply.
Efforts to Allow Rent Control
In recent years, there have been growing calls to repeal New Mexico's statewide ban on rent control and allow cities and counties to regulate rents. Housing advocates argue that rents have risen sharply in cities like Albuquerque and Santa Fe, making housing unaffordable for many working families. They contend that regulations on rent increases are needed to provide stability for tenants.
In 2021, a bill was introduced in the New Mexico legislature that would have repealed the preemption on rent control, effectively enabling local governments to pass rent stabilization ordinances if they wished. The legislation garnered support from affordable housing groups but faced strong opposition from landlords, real estate agents, developers, and other industry groups. Opponents argued rent control would reduce new construction and discourage investment in rental housing.
The rent control bill passed a Senate committee but did not receive a full vote in the 2021 legislative session. Advocates vowed to continue pushing for reforms to expand tenant protections. Several cities have considered resolutions asking the legislature to lift the statewide ban on rent regulations. While the real estate lobby remains opposed, momentum appears to be building for local control over rents in New Mexico. The issue will likely resurface in future legislative sessions as housing costs continue rising faster than wages in the state.
Tenant Rights in New Mexico
New Mexico tenants have certain basic rights, even though statewide rent control laws do not exist. These rights aim to protect renters from unsafe living conditions and limit how much landlords can collect for security deposits.
Habitability
Landlords in New Mexico must maintain rental units in a safe, sanitary, and habitable condition. This is known as the "implied warranty of habitability." If a rental unit has conditions that threaten the tenant's health or safety, such as mold, broken appliances, pest infestations, or lack of hot water, the tenant can notify the landlord in writing and request repairs.
If the landlord does not make repairs in a reasonable timeframe, the tenant may be able to terminate the lease, make the repairs and deduct costs from the rent, or sue the landlord for violating the habitability warranty. Tenants should consult local tenant rights organizations to understand their options.
Security Deposits
New Mexico caps security deposits at one month's rent for unfurnished units. Higher deposits are allowed for furnished units. When a tenant moves out, the landlord must return the deposit within 30 days or provide an itemized statement of deductions for damages. Tenants have the right to contest improper deposit withholdings.
Outlook for Rent Regulations
While housing advocates in New Mexico continue to push for allowing cities to enact rent control laws, significant challenges remain. The existing statewide ban on rent regulations has strong support from landlord groups, real estate interests, and free market proponents. These groups argue that rent control will stifle new development and decrease the quality and quantity of available rental housing. They also contend that the free market, not government intervention, should determine rental rates.
Repealing the preemption on local rent control will likely face stiff opposition in the Republican-controlled state legislature. Similar efforts have failed to gain traction in previous sessions. Advocates counter that rent control can help keep people housed and prevent displacement of vulnerable residents. But the political influence of the real estate lobby makes it an uphill battle.
Some lawmakers have proposed compromises like statewide limits on rent increases or restrictions on evictions. But these moderate reforms also struggle to advance. With rising rents and housing costs squeezing lower income New Mexicans, there is urgency for advocates to make progress. But transforming the staunch anti-rent control environment remains a major challenge. Significant organizing and public pressure will likely be needed to push through any kind of meaningful tenant protections.
Frequently Asked Questions
How much can a landlord raise rent in New Mexico?
In New Mexico, there are no state-specific rent control laws limiting how much a landlord can increase rent. Landlords must provide a 30-day notice for rent increases on month-to-month leases, and rent cannot be increased during a fixed-term lease unless specifically allowed by the lease terms.
Does Albuquerque have rent control?
Albuquerque does not have rent control ordinances, meaning landlords in Albuquerque can set rent prices without caps, as long as they comply with the notice requirements and the terms set out in the lease agreement.
What are my rights as a renter in New Mexico?
As a renter in New Mexico, you have rights under the New Mexico Owner-Resident Relations Act, which includes protections against discriminatory practices, rights to a habitable living environment, protections regarding security deposits, and specific procedures that must be followed for evictions.
Is New Mexico a landlord-friendly state?
New Mexico is considered moderately landlord-friendly. The state laws offer a balanced approach, providing protections for both landlords and tenants, but with procedures and regulations that do not overly burden landlords compared to some more tenant-friendly states.
Can a landlord break a lease in New Mexico?
A landlord cannot arbitrarily break a lease in New Mexico. Lease agreements are binding contracts, and a landlord must adhere to the terms unless there is a breach of the lease by the tenant, or under other specific conditions allowed by law, such as the property being uninhabitable or legally condemned.
