“Our costs are going up…” Well, that’s only an excuse. A self-respecting landlord owes it to himself to get the highest rent he can. By the same token, a self-respecting tenant owes it to himself to shop around and negotiate hard for the most house he can get for his money. That’s the system.
VCJIM, by all means, try to look for another house. But you also have to consider the cost and hassle of packing, moving, and unpacking. If you do find a cheaper (or nicer/bigger place), then you can use it to bargain with your landlord. Hey, if you’re good at it you may even get your current rent reduced!!!
OTOH, if rents have actually gone up in your region, you may have to pay a bit more. But even if you agree to the full 5% increase, that’s still below inflation for the last two years. Are you in a condo, TH, or SFH?
