AZ HB2161

Landlords may not increase rent for a dwelling unit more than 5 percent plus the percentage change in cost of living or 10 percent per 12-month period, whichever is less.

Rent increase limits are based on the lowest rent charged for the dwelling unit during the 12 months before the increase.

Exception: Rent increase restrictions do not apply if a dwelling unit is substantially remodeled.

"Substantially remodeled" includes replacement or substantial modification of structural, electrical, plumbing, or mechanical systems requiring a government permit, or abatement of hazardous materials (lead-based paint, mold, asbestos) requiring tenant to vacate for at least 30 days.

Cosmetic improvements alone (painting, decorating, minor repairs) that can be safely completed without tenant vacation do not qualify as substantial remodeling.