L.A. City Council Approves 4% Rent Cap on All Rent-Stabilized Units
More than half the city rents their home, and more than half of L.A. renters spend more than 30% of their income on rent
By Nick Trombola November 12, 2025 7:10 pm
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Los Angeles has long-struggled to tackle its spiraling housing crisis, but the L.A. City Council voted Wednesday to tighten the allowable annual rent increase for a massive portion of the multifamily units throughout the city.
The City Council voted 12-2 to approve several changes to its Rent Stabilization Ordinance (RSO), the city’s main rent control law that applies to the roughly 624,000 residential units built on or before Oct. 1, 1978. Those changes include a 1 percent floor and a 4 percent ceiling on annual rent increases, and represent the first time in decades that the council has strengthened its rent ordinance. It’s a change that could keep evictions due to non-payment at bay, and is an update to the city’s RSO that has been a long-time coming, said Councilmember Nithya Raman, who proposed the updated ordinance.
“We are not seeing jobs in the way that we were before [the pandemic],” Raman said before the council vote Wednesday. “And what is happening, and I’m seeing it among constituents, is that they’re looking at the landscape of economic insecurity ahead … and they’re choosing not to bet on L.A. anymore. And when our people leave, we lose what is best about L.A. That is the fear that I have every single day, that our affordability crisis is making L.A. less resilient and is making it less possible for people to live here.”
L.A. landlords with units subject to the current RSO are currently permitted to increase rent by up to 8 percent, or 3 percent plus the annual percentage change in the L.A./Long Beach/Anaheim consumer price index (CPI), whichever is lower. The maximum rent increase allowed from July 1 to June 30, 2026, based on the latest CPI calculation, is 3 percent, or up to 5 percent if landlords cover gas and electricity utilities.
About 624,000 units in 118,000 properties are subject to the RSO, according to the L.A. Housing Department. More than half of L.A. renters are rent-burdened, meaning that they spend more than 30 percent of their monthly income on rent.
The council’s move makes permanent that 4 percent cap, or 90 percent of the CPI, whichever is lower.
“We’re happy with the vote, it’s a step in the right direction to provide tenants with some economic relief to rent increases,” Larry Gross, executive director of the Coalition for Economic Survival, told Commercial Observer. “But it’s only a step. The council missed an opportunity to make a great leap, because they turned down stronger, more meaningful proposals to amend the RSO. Nevertheless, it’s going to mean a reduction in rent increases to tenants, which is greatly needed in the city of L.A.”
Opponents of the bill, including some council members, argue that the changes would prevent apartment owners from keeping up with maintenance costs, and could further disincentivize developers from building more housing within the city.
“We always argue that we don’t want more corporate ownership [of residences] — what we’re driving by doing these policies is for that to increase in the city of L.A.,” said Councilmember John Lee, who voted against the change. “We don’t want to be the cause of why people are not building here, because they can see that with a stroke of the pen, council can do whatever it wants. It can say you don’t even have to pay rent over a certain amount of time. So this is just another example of how we’re going to disincentivize building here in the city of L.A. and push more ownership into corporate ownership.”
The council’s moves are particularly impactful to small, “mom and pop” landlords, who are still reeling from the pandemic-era rent freezes and the rent moratorium imposed after the L.A. Wildfires earlier this year, Daniel Yukelson, executive director and CEO of the Apartment Association of Greater L.A., told CO.
“Housing providers will be left with very little room for maneuvering to cover fast rising costs and unanticipated expenses that come up in emergency situations,” Yukelson said. “No other business could survive under these conditions, and I am doubtful many of these small owners will be around five years from now. As a result, we will lose these RSO units to corporate owners who will redevelop these properties into luxury rentals or condominiums leaving renters with fewer choices in places to live. Our existing stock of naturally occurring affordable housing will be quickly depleted.”
Nick Trombola can be reached at ntrombola@commercialobserver.com.
