Understanding Rent Increase Regulations in Los Angeles

Renting a place in Los Angeles can be complex, particularly when it comes to understanding the rules around rent increases. These rules can significantly affect both landlords and tenants, especially in times of economic fluctuation. This article aims to clarify the current state of rent increase regulations in Los Angeles, providing valuable insights for both landlords and tenants.

The Rent Stabilization Ordinance (RSO) in Los Angeles

The Rent Stabilization Ordinance (RSO) is a significant factor in determining rent increase regulations in Los Angeles. This ordinance applies to multifamily rental units, but not to single-family homes or commercial properties. According to RSO, rent increases are not allowed for units covered under the ordinance through December 31, 2022. This period aligns with the end of the California Emergency Rental Assistance Program (ERAP) and the expiration of the eviction moratorium due to the ongoing coronavirus pandemic.

For RSO units in Los Angeles, no rent increases are permitted until after the end of the pandemic emergency period, which is currently set to conclude on December 31, 2022. After this date, non-rent-controlled units can expect an increase of up to 10%, provided the Consumer Price Index (CPI) reflects a current rate of 5% or more. However, if the CPI is less than 5%, the maximum allowable rent increase would be 10% of the lowest gross rental rate charged the tenant during the previous 12-month period.

California Law on Maximum Rent Increases

Under California state law, specifically AB 1482, the maximum annual rent increase is capped at 5% plus the change in the regional Consumer Price Index (CPI), or a maximum of 10% of the lowest gross rental rate charged the tenant during the preceding 12 months. In simple terms, the maximum allowable rent increase in California is either 5% plus CPI or up to 10%, whichever is lower.

It's important to note that even if the state law allows for a 10% increase, landlords must still adhere to the rules set by local ordinances, such as the RSO in Los Angeles. Additionally, if the CPI is less than 5%, the allowable increase would be based on a percentage of the lowest rental rate, not the actual CPI. Thus, the maximum increase can range from 5.5% (CPI 5% 0.5%) to 11% (10% of the lowest rental rate 1%).

Building Age and Rental Increases in Los Angeles

The age of the building is a critical factor determining the maximum allowed rent increases in Los Angeles. If the building is over 15 years old, the rent can increase by no more than 5% per year. For newer buildings, the landlord can raise the rent more, but they must provide tenants with a minimum of 60 days' notice, even in the case of month-to-month tenancies.

There are some exceptions to these rules for certain tenants, such as those in Section 8 programs or living in buildings dedicated to the elderly or disabled. In these cases, landlords must provide 90 days' notice for rent increases. These specific scenarios underscore the complexity of rent control laws in Los Angeles and stress the importance of understanding local regulations.

Market Trends and Average Rent Prices

The market trends and average rent prices in Los Angeles can vary greatly depending on the specific neighborhood and the size of the unit. Generally, rents under $900 are uncommon for studio apartments, with average prices around $1,100. One-bedroom apartments are typically priced at $1,200 to $1,500, and units larger than that can cost up to $2,000 or more.

It's important to note that these figures can fluctuate based on economic conditions, demand, and local market trends. Tenants and landlords should stay informed about these trends to make more informed decisions.

Conclusion

Understanding the rules around rent increases in Los Angeles is crucial for both landlords and tenants. While the Rent Stabilization Ordinance and California state law provide some clear guidelines, the specific circumstances can vary significantly. Renters and property owners should familiarize themselves with the local regulations to ensure compliance and avoid legal issues.

For the most accurate and up-to-date information, it is advisable to consult local legal resources or a reputable real estate agency. By staying informed, you can navigate the complex landscape of Los Angeles rental market with greater ease.