Rent Increases Halted in Los Angeles for Most Tenants

The city of Angels, the city of stars, the city of Los Angeles, California, is a hotspot for creative people, cultural development, and the American culture of the American Dream. As alluring as it may sound, not everything here is fun and easy, as the hustling culture, the grind, and the sweat are necessary for success. But a few things keep people motivated, and rent costs in LA are one of them. As one of the friendliest renter cities in the US, Los Angeles has rent control laws that many renters adore but that landlords aren’t too fond of. 

When we look at Angelenos, those living in one of the best places in California, we see that more than half the population of LA would rather rent than own. While this isn’t always a decision based on what they want, it is mainly based on what they can afford. Median home values are unaffordable, to say the least, for a large portion of the population. On top of that, thousands of people move to LA to pursue their dreams, and until they get on their feet, they can’t afford much. After all, even Ryan Reynolds drove around Hollywood in a car without any doors for a while when he first moved to LA.

Seven out of every ten rental units in Los Angeles, California, are under rent control laws. Further on, we will uncover how rent control laws affect rentals in Los Angeles, on top of renter protection laws from the state level.

What Is Rent Control?

Rent control or rent stabilization is a legal term used to describe the limitations imposed on rental rates at a city or state level. These laws can differ from state to municipality, but they put a limit on how much rent can increase annually. They also protect tenants from evictions that have no basis.

More like this: California Renter Rights Overview

Without these laws, landlords could increase rents as they please, based on how the market appreciates and how inflation affects prices. These rent control laws limit that increase to a certain percentage depending on the city, municipality, or state.

Rent Control in California

In the Los Angeles and San Francisco areas, California had established various forms of rent control since the 1970s. The state, however, passed the most significant law in 1995 (the Costa-Hawkins Rental Housing Act of 1995), limiting local governments in imposing rent stabilization laws. According to it, certain types of rentals, such as single-family homes, condos, and new dwellings built after 1995 are unable to qualify for rent control laws. The Costa-Hawkins Act also limits rent vacancy control.

Coming late 2019, the state of California became the second state to pass statewide rent control laws after Oregon. This law, called AB 1482 or the Tenant Protection Act covers all multi-family rental units that are built more than 15 years prior. Being a state law, it is applicable on top of other, more strict local ordinances.

Rent Stabilization in Los Angeles

There are several rules that apply to rent stabilization in the city of Los Angeles besides the ones imposed by the state. However, those additional laws only apply to buildings built before October 1978 that also have a certificate of occupancy. Still, units that belong to apartment complexes that were built between late 1978 and 2005 are under the statewide rent control laws. It is important to note that other cities that are close to or around Los Angeles County can have their own rent control laws that people should analyze before they look in those directions.

Rental Increases Halted

It’s important to know that apartments that have rent control laws imposed on them have certain specifics that renters need to understand. The annual rent cap increase for rental units can not exceed a maximum of 8%, unlike in other parts of the state. This rent cap can be affected in other areas by inflation, and we see cases where the rent cap is 5%, on top of which there’s also the 5% over the inflation rate.

When it comes to price control with an existing tenant, landlords can only raise the rent on renewed leases every 12 months. When this rent increase is applied, landlords can also raise the security deposit by an equal amount. Additionally, rent can also be increased based on utilities of up to 1% every year. And finally, before landlords can increase rents, they need to give their renters 30 days’ notice.

If there are any additional tenants moving into the unit or a roommate that is not on the original lease, landlords can apply a 10% increase. However, it’s important to note that this rent must be reduced when the additional tenants move out, by the same amount.

Protections Against Evictions

When it comes to protections established to defend renters against evictions, rent-controlled units in the city of Los Angeles follow a set of rules. In case of “no-fault” evictions, landlords need to notify the city and pay for the relocation cost of the renter. This amount can vary between $8,500 and $21,200, and it’s established based on the renter’s salary, the period of tenancy, and the reason behind the eviction. Still, the grounds for “no-fault” eviction are strictly regulated. Landlords can only impose a “no-fault” eviction if they want the unit for personal use, a family member, or a property manager. Other examples of allowed causes include the building being taken off the rental market for good, the building being demolished, or if the building needs to be vacated due to legal violations on demand from the government.

More like this: Eviction 101: Definition, Reasons, and What Happens if You Get an Eviction Notice

Landlords are not allowed to forcibly evict renters if they decide to sell the building. However, they can offer buyouts to renters if they file the correct paperwork with the city. It’s important for renters to know that they can refuse these offers. Still, while the Los Angeles Housing and Community Investment Department is in charge of administering the rent control program, they do not enforce it. Renters are responsible for enforcing it if they believe their landlords are violating their rights. Renters can hire a lawyer and sue the landlords. Landlords in LA are also forbidden from discriminating against renters using government subsidies in order to pay rent.

Conclusion

Rent increases are halted in Los Angeles, and rent control laws are set in place to protect renters from evictions and skyrocketing rent prices. Angelenos living in rent-controlled apartments pay on average $3,240 less annually than those paying market-rate rents. As far as the relocation payments for renters, the large package is meant to help renters switch from rent-controlled apartments to market-rate housing costs. At the same time, there are economists that believe that if all apartments applied market-rate rents, then LA would have a distribution of housing costs making it fairer for all parties involved.