Limits on Rent Increases in Los Angeles

A few days ago, in the state of California, United States, a restriction on rent price increases came into effect. And while this may be good news for many landlords and property managers, it’s not a situation that should cause much concern for tenants because this new law also restricts the annual rent increase.

The Tenant Protection Act, passed in 2019, limits the annual rent increase that all landlords and property managers can arbitrarily impose on their tenants.

According to the Department of Consumer and Business Affairs, the rent cap for this year was set at 8.9% for residents of Los Angeles County who are not governed by strict local regulations. This is a slight increase compared to last year’s 8.8% restriction.

To determine the percentage increase in rent prices, legislators take into account inflation and its movements, the 5% cap on annual rent increases, and changes in the local cost of living.

For example, and applicable until August 2025, the U.S. Bureau of Labor Statistics reported that the consumer price index was 3.9% for the Los Angeles area; adding the 5% rent cap gives this year’s limit of 8.9%.

However, this recent rent increase will not affect all tenants, as those living in properties built in the last 15 years will not be subject to this rule. And although the law applies to most residential rentals in the state of California, landlords and property managers of newer rentals may charge higher rates.

On the other hand, when local rent control laws further restrict annual increases, California laws will not apply because local laws will always take precedence.

Such is the case in the city of Los Angeles, which has its own local regulation, governed under the Rent Stabilization Ordinance that protects homes built before October 1978 and rental properties demolished before the same date.

When it comes to rental housing, this can refer to real estate such as apartments, condominiums, townhouses, duplexes, single-family homes, or accessory dwelling units if there are two or more on the same lot.

Tenants in unincorporated areas of Los Angeles County in buildings with two or more units are subject to the county’s temporary 4% cap on rent increases until December 31.

Anyone wishing to find out the location of the property to determine the applicable percentage can do so online, or if they already know the location, they can contact the corresponding municipality where they will be informed if there are rent control restrictions in their city.

Available Foreclosures:

Los Angeles: 120 homes available

Long Beach: 45 homes available

Pasadena: 30 homes available

By Elias DaSilva | September 30, 2024