A New Reality for Owners

Beginning January 1, 2025, the County’s ordinance now limits annual rent increases for fully covered multifamily units to 60 percent of CPI, with a hard cap at 3 percent. For “Small Property Landlords” (generally owners of 10 or fewer units), there’s a small additional 1 percent bump — but no higher. 

In the city of L.A., the newly approved reforms to the RSO introduce a 1 percent floor and 4 percent ceiling for rent hikes, calculated at 90 percent of CPI; they eliminate previous unit-by-unit add-ons such as gas/electric cost coverage. 

That cap is a significant reduction from prior allowances, which in some cases allowed 3 percent–8 percent annual increases — and up to 10 percent during high-inflation years when landlords covered utilities. 

For an owner whose costs — especially insurance and maintenance — are rising by a double-digit percentage, a cap that effectively locks rent growth to 3–4 percent is more than a constraint. It’s a financial squeeze.