The Los Angeles City Council’s Housing and Homelessness Committee voted to recommend a major overhaul of the city’s rent-control system, backing a formula that would cap annual allowable rent hikes for roughly 650,000 units at 3%, a lower percentage than the city’s Housing Department had recommended.
If adopted by the City Council, the move would mark the most significant update to Los Angeles’ Rent Stabilization Ordinance (RSO) in four decades. The RSO regulates rents and evictions for most apartments built on or before Oct. 1, 1978 and plays a central role in a city where more than half of the renters spend more than 30% of their income on housing.
The 3–2 vote, with council members Bob Blumenfield and Tim McOsker opposed, sends the proposal to the full City Council, setting up a high-stakes debate over how to balance housing affordability concerns with landlord costs.
The city has roughly 651,000 rent-stabilized units, about 74% of the city’s multifamily housing stock. Unlike newer units built after 1978, RSO properties are subject to annual caps on rent increases, currently tied to inflation with a 3% floor and an 8% ceiling.
Under the motion adopted Wednesday, which was proposed by Councilmember Nithya Raman, annual rent hikes for RSO units would be capped at 3%, with no minimum floor, and inflation would be calculated using 60% of the Consumer Price Index. The committee also voted to delete the 1–2% rent increases currently allowed when landlords pay for gas or electricity, and to prohibit additional rent increases—which can reach up to 10% in some cases— tied to extra dependents, such as a second child.
Raman’s motion also instructs the Housing Department to increase repair and rehabilitation funding for small landlords owning two to 10 units using Measure ULA and Los Angeles County Affordable Housing Solutions Agency (LACAHSA) dollars.
The committee’s action diverges from the Los Angeles Housing Department’s recommendation, which called for a 2% floor and 5% cap on annual RSO increases and a new inflation formula that uses all consumer goods except housing. That approach, based on a city-commissioned Economic Roundtable analysis, was meant to prevent already high housing costs from driving even larger rent hikes.
The proposal drew sharply different reactions from tenants and landlords.
Tenant advocates hailed the committee’s action as a long-needed revision of the city’s rent rules, which have not undergone a comprehensive update since 1985, and argued the tighter cap is essential to keep renters housed. But landlords warned the move will deepen financial pressure on small property owners still recovering from years of pandemic rent freezes, unpaid rent and sharply rising insurance costs.
Raman said the reforms reflect the scale of L.A.’s affordability crisis.
“The cost of rent in this city has skyrocketed out of control. It is absolutely enormous, and it has changed how people live and operate in the city,” she said during the meeting, noting declining public school enrollment as families move out of the city. “I think what is before us is an opportunity to adjust costs for renters, that to me is long overdue.”
Tenant advocates said the committee’s action brings Los Angeles in line with other California jurisdictions that have tightened their rent-increase formulas in recent years.
“A 3% rent cap will still allow landlords to recoup enough profits,” said Pablo Estupiñan, coalition coordinator of Keep LA Housed, in an interview Thursday. “Part of the conversation also demonstrated that small landlords aren’t struggling financially and that there is a just and reasonable recovery program for them that’s underutilized.”
That view is reflected in the city-commissioned Economic Roundtable report, which found that Los Angeles historically allowed higher rent increases than most California cities with rent control.
Of the 33 California jurisdictions with rent-stabilization ordinances, most cap annual increases at 3%, 4%, or 5% and limit allowable hikes to less than the full Consumer Price Index — a sharp contrast to Los Angeles’ pre-pandemic formula, which paired a 3% floor with inflation and routinely produced higher increases than many other cities allowed.
The study also found that operating expenses in rental units average about 35% of rental income, leaving roughly 65% as net operating income available for mortgage payments and cash flow. It noted that rent-stabilized buildings also tend to have lower tenant turnover than market-rate properties, reducing the losses that come with vacant units and the costs of preparing apartments for new tenants.
But landlord groups say the committee’s vote ignores the reality facing small housing providers still recovering from pandemic-era rent freezes and nonpayment.
“There’s this false perception out there that all landlords do is take people’s money, and hang out at the beach and that they are all super wealthy,” said Rich Kissel, a former small landlord from Council District 10 who sold his properties after what he described as mounting losses, in an interview Thursday.
“By continuing to even further cap rents, I think that all it does is it puts more pressure on landlords who are already stressed out from all the previous losses that started basically with COVID, and really haven’t totally recovered from all that yet,” he said. “ So much had happened in the meantime with inflation and prices that just rose astronomically…so much of that stuff wasn’t really reflected in the RSO study.”
He said rising insurance costs, deferred maintenance and nearly four years of rent freezes during COVID left him unable to keep up financially, forcing him to sell his 8-unit and 10-unit buildings to buyers he believes will raise rents or redevelop. His units typically rented for between $935 and $1,900.
“In the long run they’re hurting, not just small landlords and people like me, but also other tenants as well,” Kissel added, “because those units aren’t going to be around 10 years from now.”
Councilmember Blumenfield introduced a competing motion that adopted Los Angeles Housing Department’s 2–5% proposal with added “rent banking,” which would let landlords save any unused rent increase from low-inflation years and apply it in a future year.
Blumenfield argued that banking is a fairer way to match rent increases to real inflation over time. “I think we do need to be smoothing the impacts … on tenants,” he said, but added that banking “allows us to basically keep the actual cost increase to zero” by evening out inflation from year to year. Without banking, he said, “when it is above the cap… it will be lower than the actual value” landlords would otherwise receive.
McOsker, who voted against both motions, said he supports keeping rent increases low but argued the city must also set a floor above zero to comply with state requirements for a “just and reasonable” return. He warned that adopting a formula that falls below inflation in the first year could expose the city to legal risk.
Blumenfield’s motion failed 4–1. He said he will file a minority report that will accompany the item to the full City Council.
The Council is expected to take up the issue in the coming weeks, with both sides gearing up for a broader fight over how the new formula will reshape the city’s rent-control landscape.