California Rent Increase Laws | How Much Rent Can Be Raised? - BFPM (2024)

Over the past few years, renting in California has become increasingly more expensive, making it one of the priciest places to live. To address this, the statepassed rent control laws aimed at expanding the availability of affordable housingamidst high costs.

As of January 1, 2020, California implemented new rules regarding evictions and leases. This has led many landlords to inquire about the state’s rent increase limits. If you’re wondering how much landlords can raise rent in California, here’s an overview of the state’s regulations on rent increases.

What is Rent Control?

Rent control is a government measure that restricts landlords’ ability to set rental prices for specific properties. Its aim is to enhance housing affordability for low-income tenants and prevent sudden rent hikes. Rent control regulations vary by location and may include annual rent increase limits, eviction constraints, and the obligation for landlords to justify tenant evictions. The effectiveness of rent control sparks heated debates. Supporters believe it protects renters and community stability, but critics argue it reduces landlords’ motivation to maintain properties and can lead to shortages in rental housing.

There are two main types of rent regulation:

1. Eviction control
2. Price control

Both require landlords to limit rates for tenants based on factors like income and inflation. Eviction controls outline conditions under which tenants cannot be evicted, while price controls show how landlords can adjust rent.

Rent control is more common in cities with high housing demand, where market-rate prices become unaffordable for residents.

How Much Rent Can Be Raised in California?

In California, rent increases are tied to local inflation rates and property specifics. Under AB 1482, landlords can raise rent by a maximum of 5% plus the local CPI or 10%, whichever is lower. The local CPI is determined by the California Consumer Price Index, released annually by the California Department of Finance.

For example, if the local inflation rate for 2023 is 2%, landlords can increase rent by a maximum of 7%. However, this law applies only to rental properties built before February 1, 1995, and excludes newly constructed properties, owner-occupied duplexes, and certain other exceptions.

The law remains in effect until January 1, 2030, subject to future changes. Existing rent control laws in cities like Los Angeles remain unaffected. The legislation extends similar protections to units not covered by rent control, benefiting over 650,000 dwellings in Los Angeles alone.

Here is a list of maximum rent increase in a few Southern California regions:

Beverly Hills Rent Increase Limit:

In Beverly Hills, landlords can now increase rent by up to 3.2% each year in most rent-controlled homes. However, they can raise it by 3.9% for tenants who pay $600 or less and live in buildings built before Sept. 20, 1978.

Cudahy Rent Increase Limit:

The city’s maximum allowable rent increase from Aug. 1, 2023, to July 31, 2024, is 3%.

Inglewood Rent Increase Limit:

In Inglewood, rent control allows for varying annual increases. Depending on your building size and current rent, limits can be as low as 3.8% for larger buildings or as high as 8.8% for smaller ones. Landlords may raise rents even more for tenants paying below market rates. Single-family homes, condos, and new rentals are generally exempt.

Santa Monica Rent Increase Limit:

In Santa Monica, annual rent increases are limited to 2.8%. A new ballot measure lowered this to 3%. Earlier, a 6% hike, capped at $140/month, was approved but invalidated by the measure. Rent control covers pre-1979 apartments.

What Property Types Are Included in California Rent Increase Laws?

Rent control rules apply to typical rentals like apartments, but not all rentals in California. The Costa-Hawkins Rental Housing Act passed in 1995, excludes single-family homes, condos, and units built after February 1, 1995, from local rent control laws.

The Costa-Hawkins Act also allows landlords to raise rents to market levels when tenants leave rent-controlled units, either voluntarily or through eviction.

Buildings with three or four units that are owner-occupied, short-term rentals, government-subsidized tenancies, and detached “granny” units that can’t be sold separately from the main house are also not subject to rent control, depending on local regulations.

This bill has a few exceptions, including:

1. New properties constructed within the last 15 years
2. Single-family homes unless owned by certain entities
3. Duplexes where the owner lives in one unit
4. Properties already under local rent control
5. Housing with affordability restrictions
6. College dormitories
7. Mobile homes

Rent Increase Notice California

In most places, landlords must officially notify tenants before increasing rent. This notice should include the new price and when it starts. In California, the notice period varies based on:

1. The type of property
2. The type of lease
3. The size of the rent increase

For rent hikes over 10%, landlords must give tenants a 90-day notice. Month-to-month or yearly leases with tenants of over a year require a 60-day notice. Month-to-month renters under a year need 30 days, and week-to-week leases require notice regardless of duration.

How Often Can a Landlord Raise Rent in California?

In California, landlords can adjust rent once or twice annually, based on lease duration. Longer leases permit one increase annually, while short ones, month-to-month, allow two. However, under rent control laws, even short leases only permit two increases annually.