The reset, in one paragraph
Your concession applies to the first lease term. At renewal, the community calculates from the gross advertised rent — not from the effective rate you’ve been paying — and then applies whatever increase they’re applying that year. So the jump you feel is the increase plus the disappearance of the discount.
That’s why renters who took the biggest-looking offer are the ones most surprised twelve months later.
A worked example
Say you signed at $1,450 advertised with two months free on a 15-month lease. Your effective rate for the first term was about $1,257 a month — the math is in how to read a concession offer.
At renewal, the community starts from $1,450 and applies a modest 3% increase. That’s $1,494.
| Amount | |
|---|---|
| Advertised rent (year one) | $1,450 |
| Your effective rate (year one) | $1,257 |
| Renewal at 3% on gross | $1,494 |
| Monthly change you actually feel | +$237 |
From your side that’s an 19% increase. From the community’s side it’s a normal 3% renewal. Both descriptions are accurate, which is exactly why the conversation goes badly if you haven’t run the numbers in advance.
Why heavy-concession units reset hardest
The size of the reset is the size of the concession. A unit with one month free on a twelve-month term resets by roughly one twelfth of the rent plus the increase. A unit with three months free on a fifteen-month term resets by a fifth plus the increase.
Concessions cluster in newer Class A product and lease-ups — the buildings competing hardest for occupancy. Houston softened modestly through 2026 (Greater Houston Partnership / CoStar, Q1 2026), so those offers are widely available right now, and so is the reset waiting behind them.
None of this makes a concession a bad deal. It makes it a first-year deal with a known second-year consequence.
How to ask for the renewal number
Ask before you sign, in writing, and ask specifically. “Will rent go up?” gets you a shrug. These get you something:
- What was the renewal offer on this floor plan last year, in dollars?
- Is there a cap on the renewal increase, and will you put it in the lease?
- Is the renewal calculated from the gross rent or from the concessioned rate?
- If I renew for a longer term, is there a different rate?
Some communities will commit to a figure or a cap. Many won’t, and that refusal is data — it means your second-year cost is unknown, which should affect how much the first-year discount is worth to you.
The single most useful sentence in a leasing office
“Can you put the renewal rate in writing before I sign?” Ask it every time. The worst outcome is a no, and a no still tells you something.
What to do with a hard reset
Three options, and they’re all easier if you start early.
Negotiate. Renewal offers are not always final, particularly if the community’s occupancy has softened since you signed. Bring the current advertised rate on your own floor plan — if new residents are being offered a concession you’re not, that’s a fair thing to raise.
Move. Frequently the cheapest option in a soft market, because the concessions are aimed at new residents rather than existing ones. Weigh it against moving costs, a new deposit, and the application fees.
Sign a longer renewal. Some communities discount for a longer commitment. Whether that’s a good idea depends on how confident you are about the next two years.
Whatever you choose, check the early-termination consequences first — if you’re still inside the original term, a concession clawback may apply on top of a reletting fee.
Before you sign anything
Run three numbers, not one: the effective rate for the first term, the likely renewal, and the cost of leaving early. A deal that’s excellent on the first number and terrible on the second is common enough in this market that it’s worth a five-minute check.
Send us the offer you’re looking at and we’ll run all three, free — the property pays our fee after you sign, so we’ve got no reason to talk up a number that’s going to hurt you next year.