L.A. caps rent increases for stabilized units at 4%

L.A. backs 4% cap on rent increases for stabilized units starting in February

Nov. 14, 2023 4:36 PM PT

With the city’s COVID-era freeze on rent increases set to expire at the end of January, the Los Angeles City Council signed off on a compromise proposal Tuesday that will allow landlords to raise rents next year by 4% — spurning calls from some tenant advocates to extend the freeze.

The plan will apply only to units that fall under the city’s rent stabilization ordinance, which covers roughly three-quarters of all multifamily rental units in the city.

The proposal was approved on a 10-2 vote, though it still has to be formally drafted by the city attorney’s office and return to the council for another vote before it is finalized.

Councilmembers Curren Price and Katy Yaroslavsky and Council President Paul Krekorian recused themselves because they own rental properties.

Under the measure, landlords who pay tenants’ gas and electric utilities will be allowed to raise rents by 6%. Had the council not approved Tuesday’s compromise, allowable increases would have been higher: up to 7% as a base, or up to 9% if landlords pay utilities.

Tenant advocates had argued that allowing such a substantial rent increase could be catastrophic for tenants on the margins, particularly when the city has been putting enormous resources toward keeping vulnerable renters housed. They raised similar fears about the 4% increase during Tuesday’s meeting.

Housing providers pointed out that they’ve already been unable to raise rents for more than three years, at a time of soaring inflation and many other increased expenses.

Councilmembers Traci Park and John Lee voted against the measure, with Park raising concerns about the burdens that housing providers — particularly mom-and-pop landlords — have had to shoulder during the pandemic.

Councilmember Hugo Soto-Martínez, a progressive who joined the council in December and has been an outspoken tenant advocate, had proposed freezing stabilized rents for an additional six months, but that plan failed to make it out of the council’s housing and homelessness committee last week.

The 4% cap was the result of a compromise proposed during committee by Councilmember Bob Blumenfield, who raised potential legal issues around a continued freeze.

Tuesday’s meeting stretched into the afternoon, with the council debating the policy on the floor for nearly an hour. Councilmember Eunisses Hernandez — a political ally of Soto-Martínez and one of the council’s leftmost members — proposed two additional amendments. Both failed.

Hernandez’s first amendment, which garnered three votes, would have undone Blumenfield’s compromise and returned to a freeze on rent increases until the Housing Department finished studying the matter and the council took action on the report. Hernandez also proposed capping increases at 4% regardless of whether landlords pay utilities.

Councilmember Tim McOsker, a more politically moderate council member who also took office in December, introduced a separate proposal that would have differentiated between “small housing providers” who own 12 or fewer units and corporate landlords.

McOsker proposed allowing small housing providers to raise rents by up to 7%, with large landlords capped at 4%. The main sticking point appeared to be a lack of data, with the general manager of the Los Angeles Housing Department, Ann Sewill, saying the department wouldn’t be readily able to discern between the two categories.

Just before the amendment was to be voted on, McOsker said he could see it wasn’t going to pass and pulled it, instead proposing a new amendment that would ask the city attorney’s office and the Housing Department to report back within 30 days on the feasibility of his plan for small housing providers.

The meeting — which by then was well into its fifth hour — then devolved into several minutes of procedural chaos about whether or not McOsker’s initial amendment could be removed, with one council member audibly telling an aide, “I love the drama.”

The council ultimately unanimously approved McOsker’s request for a report.

During public comments, Iran Daniel, an Altadena resident who co-owns a rent-stabilized triplex in West Adams, urged council members to allow the maximum proposed rent hike.

“I am a struggling actor. I have been impacted by the SAG[-AFTRA] strike that just finished, and I have had to take from my own savings to pay for the tenant that couldn’t,” Daniel said. “We urge you to allow the 7% rent increase so that we can give our tenants the properties that they deserve, so that we can take care of their needs, so that we can make ends meet. Our rents are not enough.”

Sofia Mendoza, a South L.A. tenant with the Alliance of Californians for Community Empowerment, encouraged the council to extend the freeze for six months.

“I’m going to be severely affected because my husband is the only one who works ... and sometimes the property owners increase rents without moderation, and that would affect a lot of us, not just me,” she said in Spanish. “I ask all of you to please approve this motion.”

The city’s action follows a similar move made by the county last week.

Los Angeles County supervisors extended — and slightly increased — a soon-to-expire cap on rent increases. The county’s temporary 3% cap on annual rent increases in unincorporated areas was meant to expire in December.

But the supervisors voted to increase the cap to 4% and extend it through June, sparing tenants in unincorporated areas from a dramatic rent hike for an additional six months. The cap applies to all rent-controlled units in unincorporated L.A. County — those built before 1995, as well as all mobile homes.

Times staff writer Rebecca Ellis contributed to this report.