Lawmakers in Costa Rica’s Legislative Assembly unanimously approved last week a reform that limits landlords’ ability to increase rent paid by tenants to that of the rate of inflation. Lawmakers approved the measure in first debate, during the last plenary session before the Easter holiday.

Currently, landlords who rent properties in colones are allowed to raise a tenant’s rent by 15 percent each year.

Under the reform, rent can only be increased by a percentage equal to or less than the cumulative inflation rate of the previous twelve months as calculated by the National Institute of Statistics and Census (INEC)’s Consumer Price Index.  Should inflation be higher than 10 percent, the Ministry of Housing will define the increase.

If the rent is priced in a foreign currency, such as US Dollars, rent could not be increased for the entire term of the contract (normally 3 years), which for residential leases is already the case.

The effective rate of inflation in 2015 was actually zero, while Costa Rica’s Central Bank expects that inflation will not exceed 4 percent this year, which would result in significant savings for some 244,000 renters in the country.

“The approval of this bill is a safeguard against unconscionable increases [in rent] for tens of thousands of families,” said Housing Minister, Rosendo Pujol.

Before becoming law, the reform must pass in second debate, likely to take place on Monday, March 28^th. The reform has broad support across political aisles and is expected to meet little or no opposition.