After nearly four years of frozen rents during the pandemic, Los Angeles is entering a new chapter in its rental market one that could redefine affordability for thousands of renters across the city. Beginning February 1, many tenants living in rent-controlled apartments may face rent increases of up to 6%, marking one of the most significant housing shifts since the city first enacted its Rent Stabilization Ordinance (RSO).
The End of the Pandemic Rent Freeze
From 2020 to early 2024, the City of Los Angeles implemented a rent freeze on rent-stabilized units to protect tenants during the height of COVID-19. This freeze provided relief for roughly 600,000 units citywide, shielding renters from annual increases that could have compounded financial stress during the pandemic.
Now, that temporary protection is expiring.
Starting February 1, landlords can once again raise rents under the RSO formula 4% as a base increase, with an optional 2% surcharge if they cover gas and electricity costs. This means renters could see total increases as high as 6%, depending on how utilities are structured in their lease agreements.
For many tenants, especially those on fixed incomes or recovering from financial hardship, even a modest increase feels like a heavy hit after years of stability.
“My rent is jumping 5%, but my income hasn’t,” one tenant shared with LAist. “After groceries, bills, and medical expenses, that extra $100 feels like the difference between making it or not.”
Why February 1 Matters
Under Los Angeles’ RSO, landlords can only raise rent once per 12-month period, and that increase is tied to an inflation-based formula. The timing of the freeze’s expiration means that most landlords will act immediately on February 1 to implement the maximum allowable increase creating a sudden and concentrated financial impact for renters citywide.
The city’s Housing Department expects a wave of rent increase notices to be distributed between December and January, giving tenants limited time to prepare.
The Formula Behind Rent Increases and Why It’s Controversial
The RSO formula that dictates how much landlords can raise rent was designed in the late 1970s and ties the allowable increase to regional inflation data. However, critics argue that it’s outdated and unbalanced, often failing to reflect the economic realities facing tenants.
Here’s how it works:
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Base Increase: Determined annually based on the Consumer Price Index (CPI). For 2024–2025, this equals 4%.
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Utility Surcharge: An added 2% if the landlord pays for both gas and electricity.
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Applicable Units: Applies only to buildings constructed before October 1978, covering approximately 75% of L.A.’s rental housing stock.
Tenant advocates say the formula disproportionately benefits landlords because it allows rent growth even when tenants’ wages stagnate. Meanwhile, landlords claim that the system doesn’t keep pace with inflation in maintenance costs, property insurance, and materials.
City Officials Recommend Lower Caps
The Los Angeles Housing Department (LAHD), in its latest review, recommended reducing the allowable rent increase to better align with current economic conditions and protect vulnerable renters.
Key proposals include:
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Removing the 2% utility bump, since long-term data show it exceeds actual utility cost increases.
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Switching to a new inflation index that reflects more stable housing-cost trends. Under this formula, rent hikes would be capped at 2%.
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Introducing additional protections for senior and disabled tenants whose incomes may not rise proportionally.
The LAHD report emphasizes that even modest rent hikes can threaten housing stability for low-income families. It warns that nearly half of Los Angeles renters already spend more than 30% of their income on rent a threshold for being “cost-burdened.”
Tenants’ Reality: Rising Rents, Flat Wages
For many Angelenos, the return of rent increases feels like a “financial whiplash.”
After years of steady rents, they now face higher housing costs amid lingering inflation, rising utility bills, and stagnant wage growth.
A 5–6% rent increase may sound small in percentage terms but for a household paying $2,000 monthly, that’s an extra $100–$120 each month. For low-income renters or seniors living on fixed incomes, that can mean skipping groceries, healthcare, or transportation.
Tenant advocates are urging the City Council to delay or freeze the increases until new caps are approved. They argue that the city is still recovering from pandemic-related evictions and that a 6% jump could push thousands closer to homelessness.
Landlords’ Perspective: Rising Costs and Limited Margins
Landlords, on the other hand, are feeling squeezed by rising property taxes, insurance premiums, and maintenance expenses.
Some small property owners say the four-year rent freeze forced them to dip into savings to cover repairs, utilities, and mortgage payments. Now that the freeze is lifted, they see the upcoming rent increase as an opportunity to “catch up” financially.
“Costs for materials, labor, and insurance have jumped 20% or more since 2020,” one landlord told LAist. “A 4% increase doesn’t even begin to cover that.”
Many landlords agree that while reforming the rent control formula makes sense, a total freeze extension would risk pushing more small owners to sell or defer property maintenance further tightening the city’s housing supply.
Policy Debate: Finding the Balance
The Los Angeles City Council is now weighing whether to adopt LAHD’s recommendations before February 1.
Some councilmembers support the 2% cap as a fair middle ground, while others worry that cutting increases too low could discourage investment in rental housing.
It’s a difficult balancing act:
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Tenants want protection against sudden cost hikes and potential displacement.
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Landlords seek to recover from years of financial strain and rising expenses.
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The city aims to preserve its aging housing stock while preventing a wave of evictions.
The debate underscores a larger issue facing many U.S. cities: how to maintain housing stability while ensuring long-term sustainability for property owners.
What Tenants Should Do Now
If you live in a rent-controlled unit, here’s what you can do:
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Verify your building’s status. Check if your unit is covered under L.A.’s Rent Stabilization Ordinance (RSO).
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Review your lease. Rent increases must follow strict notice rules typically 30 days for increases under 10%, or 90 days for larger ones.
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Calculate the correct increase. Ensure your landlord’s math follows the city’s official guidelines (4% + potential 2% for utilities).
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Seek help if needed. Contact the LA Housing Department (866-557-7368) or local tenant-rights groups if you believe your increase exceeds the legal cap.
What Landlords Should Keep in Mind
For landlords, compliance and communication are key:
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Stay informed. Follow updates from the LA City Council and LAHD on potential changes to rent-increase limits.
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Document expenses. Keep detailed records of maintenance and utility costs in case of disputes or policy audits.
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Be transparent. Communicate clearly with tenants about upcoming changes this can help prevent conflict and foster goodwill.
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Prepare for possible reforms. If the city implements lower caps, ensure you adjust future increase plans accordingly.
A Crossroads for Housing Policy
Los Angeles is standing at a crossroads. The decision the city makes in the coming months will determine whether rent control continues to protect affordability or evolves into a new framework that better balances both tenant and landlord realities.
Whatever the outcome, one thing is clear: housing affordability will remain one of Los Angeles’s defining challenges in 2025 and beyond.
Source:
“LA tenants are facing rent hikes of up to 6%; city officials recommend lower caps,” LAist, December 24, 2024.
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