Los Angeles Caps Possible Rent Increases for 624,000 Stabilized Apartments
Officials lower allowable hikes to 4% and 6% as COVID-era protections end
Los Angeles lawmakers on Tuesday voted in favor of lowering the cap on the first allowable rent increase once the city’s COVID-era rent freeze on stabilized apartments expires at the end of January 2024. Officials also rejected calls to extend the freeze that has been in place since March 2020.
The regulations affect approximately 624,000 units in 118,000 properties that fall under the Rent Stabilization Ordinance, which amounts to approximately three-quarters of the city’s multifamily stock. The L.A. City Council voted 10-2 to cap increases at 4 percent, or 6 percent for landlords who pay for tenants’ gas and electricity. Before Tuesday’s vote, the set cap on rent increases was going to be 7 percent, or up to 9 percent for landlords who pay for utilities.
The city attorney’s office will draft the new proposal to lower allowable increases, and return it for the City Council vote to be finalized. The rent increases will be allowed starting Feb. 1, 2023.
The Apartment Association of Greater Los Angeles estimates that the nearly four-year freeze will have cost landlords approximately $3 billion in lost revenue. On Tuesday, landlords, as well as the two dissenting council members, pushed for the previously set higher rent increases.
Tenant advocate groups pushed to further extend the rent freeze, arguing more residents living check to check will be evicted, according to reports. But landlords emphasized they’ve been unable to increase rates for more than three years despite rising costs and historically high inflation.
Daniel Yukelson, CEO of the apartment association, said that by further restricting rent increases on Tuesday, the city broke a promise made to housing providers when the council voted almost a year ago to end the COVID-19 state of emergency. He said landlords have for almost four years suffered financially under moratoriums that restricted the ability to collect rent and eliminated rent increases, which forced smaller, independent owners to sell properties either at discounts or in foreclosure.
“Rental housing providers in the city of Los Angeles will never have an opportunity to even begin a process of recovery and recoupment of their losses at the hands of shortsighted government officials,” Yukelson said in a statement shared with Commercial Observer.
Gregory Cornfield can be reached at firstname.lastname@example.org.