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The deluge of newly built apartments in the Sunbelt and Northeast has put tenants in the driver’s seat when negotiating rent prices. Landlords in large multifamily developments have been acting accordingly by offering concessions such as free rent, waived fees, and gift cards. Many smaller landlords would be right to be concerned that the volume of apartments on the market may have had a trickle-down effect.
According to TurboTenant data, mom-and-pop landlords have largely been unwilling to offer concessions to fill apartments. Rather, many landlords have kept rents flat, which, as costs have increased, has compressed cash flow.
So what’s the right move? Concessions, a rent freeze, or both? And how can landlords survive as taxes, insurance, and maintenance costs keep rising?
Just How Much Are Big Landlords Giving Up?
After several years of intense rent growth, Zillow reports that nearly 40% of rental listings on its platform include concessions, the highest share ever recorded for this time of year. It tallies with the sheer level of new construction: Developers completed 608,000 multifamily units in 2024, the most in 40 years, resulting in vacancy rates that have climbed to 7.3% from 5.6% in 2021.
“Renters don’t have to settle this spring,” said Zillow senior economist Kara Ng in a Zillow press release. “With more supply on the market than in decades, there are real choices out there—and real room to negotiate on price, perks, and terms. Renters are in a position to push for a better deal, and property managers are ready to give them one.”
The Psychology Behind Free Rent
Larger institutional landlords with deep pockets can afford to offer incentives such as free rent because they often have wiggle room built into their operational expenses. Of course, it’s not ideal, but they often offset these concessions with premium rents for the amenities they provide in their apartment buildings. Increasingly, larger landlords have been padding fees for amenities such as parking, office/media room use (billed as “technology fees”), gym use, and more onto the base rental fee, which, in light of the affordability crisis, has been increasingly in the spotlight.
“People are being misled into signing up for rents that they cannot afford,” San Francisco supervisor Bilal Mahmood told The San Francisco Standard.
In January 2025, Greystar, the country’s largest corporate landlord, was on the receiving end of a lawsuit filed by the Federal Trade Commission (FTC) and Colorado Attorney General Phil Weiser for “deceiving consumers about monthly rent costs by tacking on numerous mandatory fees on top of advertised prices,” an FTC press release stated.
Later in 2025, Greystar agreed to a $24 million settlement, which was used to refund Greystar tenants who were victims of hidden fees. “At a time when Americans are struggling to find affordable housing, the FTC is focused on monitoring the housing marketplace to ensure that competitors are meaningfully competing on price and that consumers receive transparent pricing,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.
The Pendulum Swings Toward Smaller Landlords
The good news for smaller investors is that, according to a recent TurboTenant survey, over 80% of independent landlords stated that rental demand has not dropped in their area. That is partly because younger tenants—millennials and Gen Z—are eschewing the kind of pricey amenities that bigger landlords have been padding their rents with.
“They are not looking for the super-expensive stuff you see in a large multifamily,” TurboTenant co-host John Martin said on the Landlord Lens podcast. “They are not looking for the rooftop pool, the floor that’s actually a gym, the yoga rooms. They are looking for three things: an in-unit washer-dryer, pet-friendly, and AC.”
This clearly works in a smaller landlord’s favor because they don’t have to compete on price with the larger, corporate landlords who must pay for luxury amenities in their rentals and can thus advertise lower rents than the big-money competition without actually dropping rents.
For the comparison to be truly effective, corporate and independent landlords need to be compared side by side in individual markets. That is an undertaking each small landlord would need to do, specific to their market, before deciding to drop rents or offer a concession.
Renters Still Cannot Afford to Buy
TurboTenant clients have yet to see a drop-off in rental demand, unlike other institutional landlords, likely because their apartment costs align with the price points of tenants who can afford them.
Also factoring into this is the reality that tenants still cannot afford to buy, with 36.1% of American tenants having lived in their apartments for five years or more, according to a March 2026 Realtor.com survey of the 100 most populous metropolitan areas in the country, comprising more than 80% of the renting population.
While many corporate landlords are willing to offer concessions to expedite absorption rates in areas where most new apartments have come to market, it’s by no means a sign of desperation, as affordability continues to hamper homebuying.
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“The economics of renting versus homeownership remain very favorable,” Benjamin Schall, CEO of multifamily developer and REIT AvalonBay Communities, said in a recent call with investors as quoted by Realtor.com. “Market occupancy in our established regions remains solid.”
While construction has slowed in the Sunbelt, it has continued in the Northeast, with a 42.1% year-over-year surge in completed apartments—the only region to record growth, as quoted by Realtor.com.
“High home prices and mortgage rates keep pushing people toward renting,” says Realtor.com economist Jiayi Xu in a press release. “At the same time, many Northeast cities have been underbuilt for years, so the supply base is low, and even a modest increase can look like a big surge.”
Final Thoughts: Structuring Offers Without Killing Cash Flow
For a small landlord with an eye on cash flow, serious consideration needs to be given before offering concessions such as free rent. CNBC reports that the average concession discount in early 2026 was about 10.7% of annual rent, amounting to roughly five weeks of rent over the lease term.
As each market is different, individual landlords will have to decide whether to concede a single month’s rent or keep an apartment vacant longer. A common tactic used by large landlords is to extend the lease term beyond the usual 12 months to 13, 14, or 15 months to offset the upfront loss. However, given that many smaller landlords have reported no decline in demand in their markets, a month’s concession might not be necessary, and their rents are likely lower than those of larger institutional investors anyway.
The more pressing issue for smaller landlords is whether to keep rents flat to ensure units remain tenanted, even in the face of increased costs. This is where taking a leaf out of a corporate landlord’s handbook—increasing lease terms—might offset short-term fears. Also, lowering operational expenses, primarily through refinancing at a more favorable rate when possible, is paramount.
