Inflation laws and rent increases
Author of “The Affordable City: Strategies for Putting Housing Within Reach (and Keeping it There)”, joined us to discuss the possibility of inflation laws raising rent in your area. Shane Phillips manages the Randall Lewis Housing Initiative for the UCLA Lewis Center for Regional Policy Studies.
LOS ANGELES – Starting August 1, landlords in California are allowed to increase rents on some apartments by as much as 10%, which is the maximum allowed under state law.
This comes after the elimination of statewide eviction protections that were in place for the past two years due to the COVID-19 pandemic.
Here’s what you need to know.
What is AB 1482?
The Tenant Protection Act of 2019 (AB 1482) restricts rent increases in any 12-month period to no more than 5% plus the percentage change in the cost of living (CPI), or 10%, whichever is lower. For increases that take effect on or after Aug. 1, 2022, due to inflation, all the applicable CPIs are 5% or greater.
The law caps annual rent increases at 5% plus an inflationary figure that varies by region across the state. During the years the law was first passed, the total allowable increase ranged between 5% and 9%.
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But due to skyrocketing inflation, every region in the state now meets the threshold for the cap to be set at a 10% rent increase.
By comparison, in March 2022, the rate of inflation was as high as 8.5%.
Who does it apply to?
The 10% allowable rent increase applies only to apartment complexes that were built before 2007 and not otherwise subject to local rent control rules.
There are nearly two dozen local jurisdictions that have rent control policies in place – including Los Angeles and San Francisco.
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In Los Angeles for example, apartments built before October 1978 are covered under rent control.
Are there any exemptions?
AB 1482 does not apply to renters in places including:
- Single-family homes and condominiums as long as they are NOT owned by a corporation, a REIT (real estate investment trust), or an LLC where one member is a corporation.
- Any duplex where the owner lives in the other unit
- Mobile homes
- School and college dormitories
- Hotels
- Commercial properties (retail stores, restaurants, etc.)
- Buildings built within the last 15 years (including accessory dwelling units)
- Rental properties provided by non-profit organizations
- Rental properties subject to pre-existing local ordinances
You can learn more about exemptions by tapping or clicking here.
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If you live in an apartment in California built after 2007, you might qualify for anti-price gouging regulations that limit rent hikes also to no more than 10% within a year during declared states of emergencies
How can I check my CPI?
To find out the current CPI based on the county in which your property is located, go to CAA’s website and use the “Find your CPI” tool by tapping or clicking here.
How can I get more information?
Here are some steps you can take to learn more about
- Check to see if your county or city has an active rent freeze due to COVID-19.
- Check whether your county or city has extra rent control ordinances. Here’s a helpful article that covers all California cities with extra ordinances.
- Determine the CPI for your region. (refer to above)
- Contact your city or county’s housing department to confirm For city of Los Angeles, contact the Los Angeles Housing Department at 866-557-7368. Questions for LA County can be directed to the county’s Consumer and Business Affairs department at 800-593-8222.
