An Act amending the act of April 6, 1951 (P.L.69, No.20), known as The Landlord and Tenant Act of 1951, providing for limitations on rent increases; and imposing duties on the Pennsylvania Housing Finance Agency.

PRINTER'S NO. 963
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 914
Session of
2025
INTRODUCED BY PROKOPIAK, GUENST, HILL-EVANS, KHAN, WAXMAN,
DEASY, GIRAL, PROBST, KENYATTA, BOROWSKI, CERRATO, CEPEDA-
FREYTIZ, SANCHEZ, BOYD AND RIVERA, MARCH 17, 2025
REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
MARCH 17, 2025
AN ACT
Amending the act of April 6, 1951 (P.L.69, No.20), entitled "An
act relating to the rights, obligations and liabilities of
landlord and tenant and of parties dealing with them and
amending, revising, changing and consolidating the law
relating thereto," providing for limitations on rent
increases; and imposing duties on the Pennsylvania Housing
Finance Agency.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of April 6, 1951 (P.L.69, No.20), known
as The Landlord and Tenant Act of 1951, is amended by adding an
article to read:
ARTICLE V-C
LIMITATIONS ON RENT INCREASES
Section 501-C. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agency." The Pennsylvania Housing Finance Agency.
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"Banked amount." The dollar amount of an annual rent
increase allowance that a landlord did not use to increase the
rent for a regulated unit.
"Base rent." Rent charged for a regulated unit under a
lease, exclusive of any rental discounts, incentives,
concessions or credits that are:
(1) offered by the landlord;
(2) accepted by the tenant; and
(3) itemized in the lease separate from the rent.
"Capital improvements."
(1) Permanent structural alterations to a regulated unit
or mobile home park in which a regulated unit is located
intended to enhance the value of the unit, including the
following:
(i) Structural alterations required under Federal,
State or local law.
(ii) Improvements in amenities or services offered
in the mobile home park.
(2) The term does not include ordinary repair or
maintenance of existing structures.
"CPI-U." The Consumer Price Index for All Urban Consumers
for the Middle Atlantic census division, published by the United
States Department of Labor, Bureau of Labor Statistics.
"Executive director." The executive director of the
Pennsylvania Housing Finance Agency.
"Fair return." A return on investment that is sufficient to
offset operating expenses and commensurate with returns on
investments in other enterprises having comparable risks.
"Landlord." As defined under section 501-B. The term shall
include the owner of a mobile home park.
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"Regulated unit." A rental unit that is not exempted under
section 504-C, including a unit located on a mobile home space.
"Substantial renovation." Permanent alterations to a
building or mobile home park that:
(1) are intended to enhance the value of the building or
mobile home park; and
(2) cost an amount equal to at least 40% of the value of
the building or mobile home park as assessed by the county
assessment office of the county in which the building or
mobile home park is located.
Section 502-C. Annual rent increase allowance.
(a) Annual rent increase allowance.--The executive director
shall annually calculate a rent increase allowance for regulated
units equal to the lesser of:
(1) the CPI-U plus 3% of the base rent; or
(2) 6% of the base rent.
(b) Publication.--The executive director shall publish the
annual rent increase allowance on the agency's publicly
accessible Internet website.
(c) Duration.--A rent increase allowance under subsection
(a) shall remain in effect for a 12-month period, beginning July
1 of each year and ending on June 30 of the following year.
Section 503-C. Rent increases and limited surcharges for
capital improvements.
(a) Rent increase.--
(1) Except as provided under subsections (b) and (c)(2)
and subject to paragraph (2), upon a lease renewal or new
lease agreement, a landlord may not increase the rent of a
regulated unit to an amount greater than:
(i) the base rent; plus
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(ii) the rent increase allowance under section 502-
C; plus
(iii) any banked amount.
(2) A rent increase under paragraph (1) may not exceed
10% of the base rent.
(b) Rent increase in vacant regulated units.--The agency
shall adopt an annual determination of the allowable rent
increase for a regulated unit that:
(1) has been vacant for more than 12 months;
(2) does not have an active lease, either by a written
or oral agreement; and
(3) has returned to the market for rent.
(c) Fair return rent increase.--
(1) A landlord may file a petition with a magisterial
district court to increase rent of a regulated unit in an
amount that exceeds the annual rent increase under subsection
(a).
(2) A court shall grant the petition under paragraph (1)
if the court finds that the increase is necessary for the
landlord to obtain a fair return on the regulated unit.
(d) Limited surcharge for capital improvements.--A landlord
may file a petition with a magisterial district court for
approval to add a limited surcharge to the rent of a regulated
unit to account for capital improvement costs. A magisterial
district court shall grant a landlord's petition to add a
surcharge under this subsection to the amount permitted under
subsection (a) if the court determines:
(1) The surcharge is limited to an amount necessary to
cover the costs of capital improvements, excluding the costs
of ordinary repair and maintenance.
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(2) The surcharge does not take effect until after the
capital improvements are completed.
(3) If the capital improvements are for all regulated
units within a building or mobile home park, the surcharge:
(i) is divided equally among the regulated units;
(ii) is prorated over at least 96 months; and
(iii) does not exceed 20% of the base rent.
(4) If the capital improvements apply only to certain
regulated units within a building or mobile home park, the
surcharge:
(i) is divided equally among the affected regulated
units;
(ii) is prorated over at least 60 months; and
(iii) does not exceed 15% of the base rent.
(5) The surcharge for each regulated unit ends once the
costs of the capital improvements, including any interest and
service charges, have been recovered by the landlord.
(6) The capital improvements protect or enhance the
health, safety and security of the tenants or the
habitability of the regulated units.
(7) If the capital improvements would result in energy
cost savings:
(i) the savings would be passed on to the tenant;
and
(ii) either the improvements would result in a net
savings in the use of energy in the building or mobile
home park or the improvements are intended to comply with
applicable law.
(8) The capital improvements are depreciable under the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
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1 et seq.).
(9) The applicant has certified to the magistrate the
costs of the capital improvements, including any interest and
service charge.
(10) The applicant has certified to the magisterial
district court that all necessary governmental permits and
approvals have been granted.
(e) Additional requirements.--A landlord shall maintain and
shall make available to a tenant upon request all plans,
contracts, specifications and permits related to any capital
improvements for which a surcharge has been granted.
Section 504-C. Exempt rental units.
(a) Exemptions.--The requirements of section 503-C shall not
apply to:
(1) A newly constructed unit that has been offered for
rent for less than 23 years.
(2) A unit in a licensed facility, the primary purpose
of which is the diagnosis, cure, mitigation and treatment of
illnesses.
(3) A unit in a facility owned or leased by an
organization exempt from Federal income taxes under 26 U.S.C.
§ 501(c)(3) (relating to exemption from tax on corporations,
certain trusts, etc.) if the primary purpose of the
organization is to provide temporary shelter for qualified
clients.
(4) An owner-occupied group house.
(5) A religious facility, including a church, synagogue,
parsonage, rectory, convent and parish home.
(6) A transient lodging facility.
(7) A school dormitory.
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(8) An assisted living facility or nursing home.
(9) A building originally designed and constructed to
contain only two dwelling units, one of which the owner
occupies as a principal residence.
(10) An accessory dwelling unit.
(11) A unit subject to a regulatory agreement with a
governmental agency that restricts occupancy of the unit to
low-income tenants and moderate-income tenants.
(12) A unit located within a substantially renovated
building or mobile home park if the substantial renovation
occurred within the prior 23 years.
(13) A unit owned by a landlord who:
(i) owns two or fewer units within this
Commonwealth; and
(ii) is either an individual or the trust or estate
of a decedent.
(b) Expiration of exemption.--An exemption under subsection
(a) shall expire when the conditions entitling the unit or
facility to an exemption cease to exist.
Section 505-C. Agency regulations and enforcement.
(a) Rules and regulations.--The agency shall promulgate
rules and regulations necessary to implement this article,
including:
(1) A formula to determine the rent increase necessary
to obtain a fair return for a regulated unit.
(2) Petition requirements, including the information a
landlord shall submit to demonstrate the rent necessary to
obtain a fair return under section 503-C(c).
(3) A uniform system and procedure for processing
petitions under section 503-C(c) and (d).
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(4) Criteria magisterial district courts shall use to
evaluate and to grant or deny a petition under section 503-
C(c) and (d).
(5) The duration of a rent increase approved under this
article.
(6) Limitations on fee increases or new fees charged by
a landlord for a regulated unit.
(b) Promulgation.--The agency shall promulgate the rules and
regulations required under subsection (a) no later than 90 days
after the effective date of this subsection.
Section 506-C. Applicability.
Sections 501-C, 502-C, 503-C and 504-C shall not apply and
may not be enforced until the rules and regulations required
under section 505-C(a) have taken effect.
Section 2. This act shall take effect in 60 days.
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