Los Angeles City Council Looks to Limit Rent Increases on Rent Controlled Units

The upcoming City Council vote on Tuesday centers around a crucial proposal designed to curtail expected rent increases for properties falling under the jurisdiction of the city’s rent-control law. This proposal, initially slated for discussion during last week’s council meeting, faced a delay at the hands of Councilman Hugo Soto-Martinez. His decision to defer the proceedings was motivated by a desire to provide his colleagues with additional time for thoughtful consideration. The impetus behind this proposal lies in the imminent conclusion, set for January 31, 2024, of a pandemic-era rent freeze affecting rent-stabilized units.

Dating back to 1979, the city’s Rent Stabilization Ordinance has been a pivotal instrument in governing rental housing constructed before 1978. This ordinance places a cap on allowable rent increases for rent-controlled units, linking them to the consumer price index—a metric reflecting inflation.

In a notable turn of events on Nov. 1, the council’s Housing and Homeless Committee, consisting of five members, voted 3-2 to endorse a modified proposal. This revised plan is specifically crafted to mitigate rent hikes following the expiration of the rent freeze. It’s worth noting that Council members Monica Rodriguez and John Lee registered dissenting votes.

Councilman Bob Blumenfield played a significant role by amending a motion introduced by Soto-Martinez on Oct. 25. Rather than advocating for an extension of the rent freeze, Blumenfield’s amendment proposed a collaborative effort involving the city attorney and the Housing Department. The goal was to draft an ordinance that would temporarily specify rent increases for rent-controlled units, covering the period from Feb. 1 to June 30, 2024.

As the council convenes on Tuesday, the proposal on the table represents a compromise—a carefully crafted plan that suggests allowing a maximum 4% rent increase. In an additional provision, landlords could opt for an increase of up to 6% if they assume responsibility for gas and electrical costs in relation to rent-stabilized units.

Crucially, the proposed rent hikes are not arbitrary; they would be calculated using a formula outlined in the city’s rent control law. However, there is a shift in the calculation period, with the consumer price index from October 2022 to September 2023 being considered instead of the previous period from October 2021 to September 2022. This adjustment reflects the dynamic nature of economic conditions influencing rent adjustments.