The City of Los Angeles imposed new caps on rent increases for its rent-stabilized apartments following hours of debate and public comment on Tuesday.
Landlords who cover utilities (gas and electric) will be able to raise rents by 6% while those who do not will be limited to 4%. The increases are less than would have occurred without Council intervention after the City previously voted let a pandemic era rent freeze expire.
Councilmembers Traci Park and John Lee were the only “no” votes on the proposal although Councilmembers Paul Krekorian, Katy Yaroslavsky and Curren Price all recused themselves citing income from rental properties.
Several councilmembers tried to alter the proposal on Tuesday pitching a return to the full rent freeze, a lower cap on increases and an exemption for small landlords. All efforts to alter the motion failed with the original proposal passing by a 10-2 vote.
Local and regional agencies have been working on similar increases this year.
In Santa Monica, tenants in rent controlled apartments saw their rents increase by 2.8% or $67 this year, whichever was lower.
Rent increases in local rent-controlled units are determined by a formula based on the Consumer Price Index (CPI), which limits rents to 75% of the CPI. This year, with a CPI of 3.7%, rent increases were capped at 2.8%. However, the Rent Control Board has the option to establish a dollar cap on increases, which would be a maximum of $67 per month for units already paying $2,375 or more.
Last year, record inflation rates of about 8.5% led to a rent increase of 6%, the highest allowable increase at the time. This sparked a renter rebellion and prompted local officials to propose a charter amendment, Measure RC, which aimed to lower the maximum allowable rental increase to 3% per year, regardless of the CPI. Measure RC also rolled back the 2022 general adjustment to an average of 3%.
The Los Angeles County Board of Supervisors set a temporary cap on rent increases of 4% for tenants in unincorporated Los Angeles County communities who reside in housing subject to the County’s Rent Stabilization and Tenant Protections Ordinance (RSTPO). The motion authored by Supervisors Lindsey P. Horvath and Hilda L. Solis will be effective January 1, 2024 – June 30, 2024, and aligns with the County’s homelessness prevention priority for the homelessness emergency declaration.
“Keeping people in their homes by stabilizing rent to keep it affordable is essential in preventing homelessness. Doing so is responsible, just, and necessary in the face of the homelessness crisis we face — anything less will undermine our ongoing emergency response,” said Supervisor Lindsey P. Horvath. ”This moment calls us to level the playing field and protect our most vulnerable while we gather better data on rent stabilization impacts throughout our unincorporated communities.”
Through the motion, the county rent cap will be set at 4% for a six-month period while a comprehensive analysis is conducted on the economic impact of recently enacted rent increase formulas in order to recommend permanent changes to the RSTPO.
In approving increases this week, the Los Angeles council asked for an analysis of programs to assist tenants and landlords for maintenance of rent-stabilized properties. It also asked for a report on rules that would differentiate “mom-and-pop” landlords from large corporations.
Tenants rights organization, the Coalition for Economic Survival, said the size of the landlord didn’t matter if the tenant couldn’t pay the rent.
“The obsession with protecting small landlords totally ignores that the tenants living in these units cannot afford the larger rent increase,” they said in a statement. “Instead, valid small landlords who truly need help should be provided government financial assistance, not saddling tenants with additional rent hikes they can’t afford.”