los Angeles Significantly Limits Rent Increases on Hundreds of Thousands of Apartments
LOS ANGELES,โข CA – The Los Angeles Cityโ Council voted yesterday to lower allowable โฃrent increases on โคapproximately 650,000โข rent-stabilized units across the city. The new policy, intended โฃto bolster tenant protections, โadjusts the formulaโ used to calculate annual rent adjustmentsโข for properties built before Octoberโ 1978.
Underโ the newly endorsed formula, landlordsโ can now raiseโ rents byโข 90 percent ofโ theโ Consumer Price โIndex (CPI), with a maximum increase of 4 โpercent. A guaranteed minimumโ annual increase of 1โ percent is also included. Previously, landlordsโค could increase rents by 100 percentโ of CPI, capped at 8 percent, with a floor of 3 percent.
The change comes alongside existing state-level rent control policies,including California’s ABโ 1482,wich limits rent increases to โtheโข lesser of 5 percent โplus inflation or 10 percent on buildings at least โข15 years old. State law also allows landlords to raise rents to market rates on vacant units.
Proponents ofโ the measure argue the lower caps will help tenants remain in their homes. However, some property โowners contend the new โขrestrictions will discourage new construction, notably โredevelopment โคprojects involving rent-stabilized properties. City regulationsโค require that any new rental โhousing built โขon โขa lot containing rent-stabilizedโข unitsโ also โคbe subject to rent stabilization.
“By lowering allowable rent increases on rent-stabilized units, Los Angeles’ new rent caps will make projects that โขredevelop โฃrent-stabilized housing into larger developments less attractive,” the article states.
Politico interviewed one landlord who has abandoned โคplansโ to โฃconvert a rent-stabilized triplex โขinto a 48-unit development due to the โคrequirement that the new project also be rent-stabilized.
The City Attorney is now tasked with drafting an ordinance โincorporating the new formula intoโ the existing โrent stabilizationโ ordinance, which will โคrequire a second vote by the City Council for enactment.
