LA Rent Hikes Return
City council votes to cap rent hikes at 6%
The details: The proposal will allow rent hikes of 4% beginning on Feb. 1, 2024, with an additional 2% increase permissible for landlords who cover their tenants’ gas and electricity costs. The city’s ongoing rent freeze applies to apartments covered by the city’s rent control law, which generally includes apartment buildings built before October 1978.
The background: By the time rent increases resume in February, L.A. will have banned rent hikes in most of the city’s apartments for just shy of four years, far longer than other parts of the country. If the council hadn’t taken action, tenants could have received rent increases of 7% to 9%.
The lead-up to the vote: During Tuesday’s meeting, councilmembers proposed dueling amendments to alter the rules on rent hikes moving forward. Some wanted to allow small landlords to charge more, while others wanted to keep the 4% limit in place for all landlords regardless of who covers utilities. Neither amendment received enough votes to pass.
The Los Angeles city council voted Tuesday, November 14, to let landlords increase rents in the city’s rent-controlled apartments up to 6% for the first time since March 2020.
The proposal will allow rent hikes of 4% beginning on Feb. 1 with additional 2% increases permitted for landlords who cover their tenants’ gas and electricity costs.
The 10-2 decision came after fierce debate among council members, caught between pleas from tenants to keep low-income residents housed by continuing the pandemic-era ban on rent hikes and demands from landlords to end a nearly four-year rent freeze that blocked increased maintenance costs from being passed on to renters.
If the council hadn’t taken action, the city’s existing rules would have allowed landlords with rent-controlled properties to increase rents by 7% to 9% starting on Feb. 1.
Councilmember Eunisses Hernandez, who voted in support of the lower limits, said, “If we increase rent, people are going to get evicted, and we’re not going to stop this eviction-to-homelessness pipeline.”
Traci Park, one of the council members who voted against lowering the rent increases allowed on Feb. 1, said, “We’ve already asked an awful lot of our mom-and-pop landlords, and I just can’t imagine how much more we’re going to continue to expect them to give.”
Councilmember John Lee joined Park in voting no. Councilmembers Paul Krekorian and Curren Price recused themselves from the vote because they are landlords. Councilmember Katy Yaroslavksy was absent from the vote.
The proposal will now move to the city attorney’s office for drafting and return to the council for another vote before it is finalized.
The backstory to L.A.’s rent freeze
By the time increases resume in February, L.A. will have banned rent hikes in most of the city’s apartments for just shy of four years, far longer than other parts of the country.
The ongoing rent freeze started when COVID-19 public health restrictions first began. City lawmakers saw the ban as a way to protect renters facing financial and personal hardships caused by the pandemic.
The policy applies to nearly 600,000 apartments covered by the city’s rent control law, which generally includes apartment buildings built before October 1978. These older buildings make up nearly three-quarters of the city’s apartment stock. Newer buildings are subject to state law, which currently allows rent increases in L.A. and Orange counties of up to 8.8% annually.
The city’s rent freeze has helped many L.A. tenants — who tend to pay rents that exceed 30% of their income — balance their household budgets during a period when inflation surged. Housing researchers say even small rent increases have been shown to increase homelessness among the lowest-income renters.
The ongoing ban on rent hikes has enraged many of the city’s landlords, who think it should have ended years ago. They’ve long said that rising utility and maintenance costs, coupled with the inability to raise rents, have created financial hardships.
How the council came to this decision
Last month, councilmembers Hugo Soto-Martinez and Eunisses Hernandez moved to extend the rent freeze until August 2024. Landlords quickly mobilized to strike down that proposal.
Councilmember Bob Blumenfield instead suggested allowing rent hikes to return on Feb. 1 as planned, but at increases of 4% to 6%. His proposal cleared the council’s housing committee, but a vote scheduled last week in the full city council was delayed in his absence.
During Tuesday’s meeting, council members proposed dueling amendments to alter the rules on rent hikes moving forward.
- Councilmember Tim McOsker moved to allow small landlords with 12 units or fewer to raise rents 7% to 9%, while preserving the lower 4% to 6% limit for larger landlords.
- Councilmember Eunisses Hernandez moved to keep the 4% limit in place for all landlords, with no additional 2% for landlords who cover utilities.
Neither amendment received enough votes to pass.
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Landlords say repairs will have to wait
Landlords were happy to see the six-month rent freeze extension rejected, but many had hoped for higher allowable increases.
Daniel Bleiberg with L.A. property management company G-B Investment Services said that by not allowing landlords to keep up with rising costs for years through modest rent increases, city leaders have worked against their own affordable housing goals.
“Rental property needs to be a viable business or it’s only going to get worse,” Bleiberg said, adding that some owners have already asked him if they’d be better off selling their property to a developer. “The more [city council members] don’t make it a viable business, they’re just going to lose more and more of this housing.”
Geza Tokes owns and manages 18 rent-controlled apartments in the city of L.A.
“When the rent freeze started, we had no problem with that,” Tokes said. “It was shaky times and it made sense.”
But Tokes questioned the city’s decision to keep the ban on rent hikes in place for years. He said stagnant rents make it difficult to keep up with rising maintenance costs for gardening, pest control and plumbing. Until the rent freeze lifts in February, he said larger repairs are on hold.
“I’ve got to put a roof on a property in Echo Park — it’s $14,000,” Tokes said. “Last winter’s rains got us. It’s leaking, and we put a Band-Aid on that … I want to take the roof off and get permits and do it legit. But I can’t throw $14,000 down right now.”
Tenants say they’re already living on the edge
Many tenants say they can’t afford to see L.A.’s already high rents climb even higher.
Studio City renter Cindy Sanders said, as a retiree, Social Security is her main source of income, and there isn’t much left after she pays rent. She said an increase of up to 6% could spell the difference between staying in her apartment of nearly 30 years, or having to move out.
“With Social Security raises not being high … it’s going to really have an effect,” Sanders said. She said she could not afford a similarly sized apartment in L.A. if she’s forced to move.
Delia Cardona said most of her income from cleaning homes and offices goes straight to rent for the Koreatown studio apartment she shares with her two sons. With her budget already strained, she said any increase will force her to cut back on basic necessities.
“Obviously it would affect me and make it harder to buy food and pay my bills,” Cardona said through a Spanish interpreter. She has organized with the Los Angeles Tenants Union to advocate for continuing the city’s rent freeze.
What comes next
Now, city officials will have to spread the word about the new rent increase rules. The L.A. Housing Department has already told landlords that rent increases of 7% to 9% will be allowed on Feb. 1. Officials will now have to contact them again to note the change to lower limits.
During the pandemic, tenants experienced confusion over the rent freeze, as well as a lack of compliance from some landlords. By early 2023, illegal rent increase complaints had eclipsed pre-pandemic levels. Some tenants also reported that “discount” rent clauses buried in their leases allowed landlords to pass on large rent increases.
With allowable increases of up to 6%, the city of L.A. will have some of the highest permissible rent hikes among all of the cities in Southern California that have local rent control. Santa Monica, West Hollywood and Santa Ana have all set allowable increases below 3%. The L.A. County Board of Supervisors voted last week to approve allowable rent increases of up to 4% in rent-controlled housing starting next year in unincorporated areas.