On Tuesday, June 4^th, the Los Angeles County Board of Supervisors voted 3-2 (Supervisors Barger and Hahn in opposition) to destroy the rental housing in the unincorporated areas of the County by instructing staff to return with an amendment for final approval that will drastically lower the allowable rent increase formula to a mere 60% of the Consumer Price Index (CPI) with a 3% maximum cap and no floor. 

What does this motion mean for owners? It means that once the amendment is finally adopted and starting January 1, 2025, owners will only be able to increase rent by just 60% of CPI as an annual increase whatever the CPI turns out to be and we cannot forecast it at this time because it is based on an average of the prior 12 months of CPI ending in September 2024. As an example: if the current CPI were used of 4.275%, then you would only be allowed to increase rent by 2.57%. Also, you would only hit the new maximum of 3% “ceiling” if the CPI was at least 5% (5% x .60 = 3%). In addition, it means that future increases could be as low as ZERO depending on the CPI because there is no longer any floor. For some small owners with fewer than 10 units (see further discussion below), you would be able to take an additional 1% increase with a maximum of 4% and for some luxury owners you would be able to take an additional 2% increase with a maximum of 5%. The current maximum allowable increase of 4% would remain in place through December 31, 2024.

For more information or for a complimentary evaluation of your property, please feel free to reach out to me directly: karlmarkarian@kmassociates.co

***Disclaimer: Each Landlord is responsible for their own review / diligence of any information provided as this is for information purposes only***

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