Understanding the New Rent Increase Update in Los Angeles: What You Need to Know

​Big Changes Ahead: Explaining the Recent LA City Council Vote

On December 5th, the Los Angeles City Council made a significant decision that impacted the way rent increases were calculated for RSO units. The 10-2 vote in favor of passing a new ordinance brings crucial changes that tenants and landlords should be aware of.

Decreasing the Allowable Increase

One of the most notable changes is the adjustment in the allowable increase. Previously set at 7%, this figure will now decrease to 4% for the period between February 1, 2024, and June 30, 2024. This alteration aims to moderate the rate of rent increases, offering tenants some relief in a challenging housing market.

Additional Allowance for Utility Providers

Moreover, there's an additional allowance of up to 2% for property owners who provide electricity and/or gas. This incentivizes landlords who offer utilities within their rental units while still regulating the overall rent hike.

SCEP & RSO Pass Through Amount
As of January 1, 2022, the SCEP fee stands at $67.94 per unit annually & RSO fee amounts to $38.75 per unit annually.

Landlords have the right to collect these fees from tenants at a rate of $2.83 &  $1.61 per month, spread over 12 months each year. However, this can only be done after the landlord has registered the units and provided proper written notice to the tenant.
An Amendment for Small Owners

An important amendment, proposed by McOsker and passed as part of Blumenfield’s original motion, demands a report from the Los Angeles Housing Department. This report, expected by December 14, is pivotal in creating a specific definition for "small owners." This definition aims to allow these landlords to take the increase under the original formula of 7%, offering a more balanced approach for smaller property owners.

What's Next?

This update marks a shift in rent increase regulations, aiming to strike a balance between supporting tenants and acknowledging the needs of property owners. As we await further clarity on the definition of "small owners," it's essential for both tenants and landlords to stay informed about these changes and their implications.

RESOURCES:
https://housing2.lacity.org/rso-rent-increase-calculator
https://members.aagla.org/news/editorial-news-alert-los-angeles-city-council-passes-rigged-formula-to-reduce-rso-rent-increases
https://www.saje.net/help-for-renters/if-your-rent-is-increasing/