The National Human Settlements Board (NHSB) has announced a 2.3 percent cap on rent increases for residential units with monthly rates of P10,000 or less, effective from 1 January to 31 December this year, a decrease from the 4 percent cap implemented in 2024.

NHSB Resolution 2024-001, passed last December upon the recommendation of the National Economic and Development Authority (NEDA), sets the new limit. The NHSB is the primary policy-making body responsible for providing policy direction and program development to key shelter agencies.

Department of Human Settlements and Urban Development (DHSUD) Secretary Jose Rizalino Acuzar chairs the NHSB. Undersecretary Henry Yap, representing Secretary Acuzar, signed the resolution on behalf of DHSUD.

The rental cap aims to protect lower-income tenants from excessive rent increases, in accordance with Republic Act 9653, the Rent Control Act of 2009.

The cap applies specifically to residential units occupied by the same tenants as of 2024, paying P10,000 or less per month, who continue their occupancy or renew their lease in 2025. Units with monthly rents exceeding P10,000 are exempted.

The term “residential unit” encompasses various dwelling types, including apartments, houses, land with dwellings, boarding houses, dormitories, rooms, and bed spaces. It also includes spaces used for home industries, retail stores, or other businesses if the owner and their family reside there and use it primarily as a dwelling.

If a unit becomes vacant in 2025, the lessor is permitted to set a new rent for incoming tenants, as they are not covered by the resolution. However, for boarding houses, dormitories, rooms, and bed spaces, only a single rent adjustment is allowed within 2025, even if it falls below the maximum limit.

Newly constructed or leased units in 2025 are also allowed to set their own initial rents.

Looking ahead to 2026, a further reduced limit of 1 percent will apply to units occupied by the same tenants as of 2025 who pay P10,000 or less monthly and continue their lease. Units with rents above P10,000 in 2025 will remain outside the scope of the 2026 cap.

Tenants are encouraged to first seek alternative dispute resolution with their landlords through the Barangay Justice System’s mediation process. Court adjudication will only be pursued if mediation fails.

Lessors found guilty of violating the rent control act could face fines ranging from P25,000 to P50,000, imprisonment from one month and one day to six months, or both, depending on the court’s decision.