For the first time in decades, the Los Angeles city council overhauled its rent control rules on Wednesday, sharply lowering the annual rent increases facing tenants in one of the country’s most expensive cities.
The decision follows years of debate over how heavy a hand the city should have in regulating its sprawling rental market as living costs have soared and the gap between rich and poor has widened. It comes amid a national focus on affordability punctuated by New York City Mayor-elect Zohran Mamdani, who won a decisive victory last week after running an outsider campaign centered on a promise to “freeze the rent” for that city’s tenants.
“What we have before us right now is an opportunity to make L.A. more affordable,” said City Councilmember Nithya Raman, who championed the measure, at a rousing press conference with tenant activists before the vote. “Because when people can afford to stay in Los Angeles this entire city thrives.”
The action marks another significant victory for tenant organizers and their allies on the city council who in recent years have substantially boosted protections for renters, including greater restrictions against evictions, taxpayer-funded legal support and additional leeway to repay overdue rent. Under the new rules, Los Angeles landlords whose buildings are covered by the city’s rent stabilization laws — about three-quarters of the market — will be allowed to increase rents by between just 1% and 4% each year, depending on inflation. Currently, landlords are allowed to increase rent between 3% and 8% annually.
Los Angeles Mayor Karen Bass applauded the council’s action, saying that it’s part of her broader focus on making it easier to live in the city.
“We will help Angelenos afford their housing, prevent people from falling into homelessness and restrict skyrocketing rents,” Bass said in a statement.
The council’s 12-2 vote came after a heated, nearly two-hour hearing that exposed deep ideological divisions and disagreement over whether the changes would provide a lifeline to struggling tenants or cause landlords to go out of business. The decision, which requires an additional vote to ratify specific language before becoming law, is likely to go into effect before many tenants face their next rent increase in February.
Los Angeles landlords decried the move, saying the loss of income will make it harder for them to maintain their properties, force them to sell and discourage the development of new apartments in a city that has long faced a severe shortage.
“This vote will go down in history for our housing supply and our providers,” said Chris Gray, president of Moss & Company, a large property management firm in Los Angeles. “We can’t afford it.”
Los Angeles, like many cities in California, remains mired in a homelessness and affordability crisis. Nearly 44,000 people are homeless, according to the most recent official estimate, and one in three tenants spend more than half their income on rent.
Over 1.5 million Angelenos live in the city’s 651,000 rent stabilized apartments. Generally, the limits on rent increases apply to apartments built before October 1978.
State law prevents the city from changing that date, though landlords of more recently built apartments in Los Angeles and elsewhere in California must abide by less stringent rules prohibiting larger rent hikes. Single-family-home rentals and apartments built within the last 15 years are exempted from rent controls except in special circumstances. In any case, when someone vacates an apartment, there is no cap on how much the landlord can increase the rent for the next tenant.
The COVID-19 pandemic set the stage for the wave of tenant wins in the city. Fears of massive job losses at the outset in March 2020 led the city to prohibit evictions for failure to pay rent and, for the first time since rent control rules went into effect, ban rent increases in stabilized buildings.
The “rent freeze” lasted nearly four years, far longer than in other large cities. When unwinding the COVID-era protections, councilmembers replaced them with permanent rules that were much stronger than what had been in place beforehand.
Tenants, for example, can miss one month’s rent before their landlord is allowed to initiate eviction proceedings. Renters cannot be evicted at all unless they breach their lease, the owner wants to live in the apartment or other specified reasons. Low-income renters receive legal support in eviction court.
The city’s housing politics shifted in favor of tenants beginning with Raman’s victory in 2020 and continued with the election of progressive councilmembers Eunisses Hernandez, Hugo Soto-Martinez and Ysabel Jurado, all of whom voted in favor of the new rent restrictions Wednesday.
“I’m tired of us talking about trying to make the city of Los Angeles a world-class city when we are not even throwing down for our families,” Hernandez said at the press conference prior to the vote. “Today is an example of stepping up and doing that.”
“Keep LA Housed,” the coalition that put on the press conference, formed in the wake of the COVID emergency and is made up of more than a dozen tenants’ rights, community organizing and public interest attorney groups. It has pushed for a Tenant Bill of Rights that included many of the changes now passed by the city council.
Wednesday’s vote is the “capstone” of that effort, said Christina Boyar, staff attorney with Public Counsel, a coalition member.
“This has been the longest fight, the biggest fight and one of the most meaningful fights,” Boyar said.
Discussions over changing the formula for allowable rent increases formally began two years ago when councilmembers set aside money to hire Economic Roundtable, an L.A.-based consultant, to analyze the city’s rules and compare them with others.
The study found that L.A.’s rent hikes — which included additional potential increases to account for rising utility bills — were greater than the majority of other California cities that had rent control, including Berkeley, San Francisco and Santa Monica. The study also determined that the market value of rent-stabilized units in Los Angeles had doubled in the past decade and owners enjoyed significant growth in units’ net operating incomes.
Additionally, the study showed that landlord expenses were increasing, in large part because of rising insurance costs and the need to make repairs and upgrades. With few exceptions, the most recent rent stabilized properties are nearly 50 years old and half of them were constructed before 1950.
Citing a need for landlords to invest in their buildings, the city housing department recommended to the council that it change the limits on rent increases to a maximum 5% annual jump with a floor of 2%, depending on inflation.
But councilmembers whittled down those numbers last week in its Housing and Homelessness Committee, which Raman chairs. Her committee pushed forward a more aggressive plan that would have banned increases altogether if inflation was low enough and capped the hikes at no more than 3%.
During a lengthy back-and-forth at Wednesday’s meeting, it was clear a majority of councilmembers didn’t support that idea. Some argued that too tight of a restriction would be counterproductive as small landlords would sell and development would stall.
“You can’t complain about affordability or say the ‘rent is too damn high’, and then be part of the contributing factor that actually makes it even more expensive,” said Councilmember Monica Rodriguez.
Rodriguez voted for the final proposal, where the city will determine an allowable annual rent increase of between 1% and 4% that’s based on 90% of the consumer price index — a leading marker of inflation.
Because the city’s rent stabilization rules generally apply to older buildings, supporters of the changes have argued that lowering allowable rent hikes in them will not affect new construction.
But some developers disagree. John Gregorchuk said in an interview he’d been planning to redevelop an older triplex he purchased next to a light rail station in South Los Angeles into a 48-unit apartment building. He abandoned the project because the city’s rent stabilization rules can require new buildings that replace such housing to be subject to rent restrictions. Instead, he’s selling the property and four others he owns in the city.
“It’s really hard to tell investors, ‘Let’s take all this risk,’ in a city that hates landlords and developers,” said Gregorchuk.
Wednesday’s vote included a provision to study the effects of the rent stabilization rules and other city and state regulations on redevelopment projects.
