MAJOR ANNOUNCEMENT: RSO Rent Increase Formula Reduced

LA Housing Newsletter
Los Angeles Housing Department Updates

MAJOR ANNOUNCEMENT: RSO Rent Increase Formula Reduced

On December 12th, the Los Angeles City Council held a final vote to approve an ordinance that significantly reduces the Rent Stabilization Ordinance (RSO) formula for rent increases. This landmark decision will reshape how rental increases are calculated for RSO-protected units across the city. 

Implementation Date: The new RSO formula calculation will be implemented on July 1, 2026.

Key Provisions of the New Ordinance
1. Immediate 3% Cap (June 1, 2025 - June 30, 2026)
Allowable annual maximum rent increase is limited to 3% for the period from June 1, 2025 through June 30, 2026 for increases that were not previously noticed and served.

2. CPI-Based Calculation (Effective July 1, 2026)

Starting July 1, 2026, the annual allowable rent increase will be calculated on the basis of 90% of the Consumer Price Index (CPI) for "All Items" (down from the current 100% of CPI). With the current Los Angeles CPI at 3%, the rent increase as of July 1, 2026 would be only 2.9%.

3. Reduced Increase Range

Rent increases are now capped between 1% to 4%, down from the previous range of 3% to 8%.

4. Elimination of Utility Allowance Increase

Immediate elimination of the additional 1% increase previously permitted for housing providers who pay for gas and/or electricity on behalf of renters living in master metered properties.

5. Elimination of Dependent Occupant Increase

Immediate elimination of the existing 10% increase previously permitted for additional occupants who are deemed dependents of the existing renter.
From: Dennis P Block & Associates APC