– The Los Angeles City Council voted to allow landlords of rent-stabilized units to increase rent by 4-6% after a three-year freeze.
– Landlords who cover the cost of utilities can raise rent up to 6%, while those who don’t can raise it 4%.
– The increase is based on inflation data from October 2022 through September 2023.
– The change applies to over 600,000 units across the city.
– The council also made a distinction between independent landlords and corporate landlords to ensure smaller landlords can receive city resources.
– Some council members expressed concerns that limiting rent hikes may lead independent landlords to sell their properties to institutional investors.
The council decided to base the increase on inflation data from October 2022 through September 2023 rather than the prior year, which would have resulted in a steeper rent hike, according to the “Los Angeles Daily News.”
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The Los Angeles City Council voted this week to allow landlords of rent-stabilized units to hike the cost of rent by 4 percent to 6 percent after a three-year, pandemic-era freeze.
Landlords who cover the cost of utilities can raise rent up to 6 percent. Those who don’t can raise it 4 percent, the Los Angeles Times reported. The change applies to over 600,000 units across the city.
The City Council also began the step of formally distinguishing between independent, or “mom-and-pop,” landlords with institutional or corporate landlords amid a period of angst around housing costs and investor ownership.
“I just hope that folks are ready to look at themselves when we see an increase (in eviction filings) because if we increase rent, people are going to get evicted and we’re not going to stop this eviction to homelessness pipeline,” Councilwoman Eunisses Hernandez said, according to the Los Angeles Daily News.
Los Angeles’ 1979 rent control law ties rent hikes to inflation, and it applies to buildings constructed before 1978.
The council decided to base the increase on inflation data from October 2022 through September 2023 rather than the prior year, which would have resulted in a steeper rent hike, according to the Los Angeles Daily News.
The move to distinguish independent landlords from corporate landlords is an attempt to make sure smaller landlords can receive city resources, the Los Angeles Daily News reported.
One councilman said he worried that limiting rent hikes would spur more independent landlords to sell their properties to institutional investors.
Property Chomp's Take:
The Los Angeles City Council has voted to lift a three-year freeze on rent hikes for landlords of rent-stabilized units. This decision comes as a relief to many landlords who have been unable to raise rents since the start of the pandemic. However, the council has also implemented certain restrictions to protect tenants from excessive increases.
Under the new rules, landlords who cover the cost of utilities can raise rent by up to 6 percent, while those who do not can raise it by 4 percent. This change applies to over 600,000 units across the city. The council's decision to base the rent increase on inflation data from October 2022 through September 2023, rather than the prior year, has also helped to mitigate the potential impact of the rent hike.
The council has also taken steps to distinguish between independent or "mom-and-pop" landlords and institutional or corporate landlords. This move aims to ensure that smaller landlords can receive city resources and support. By recognizing the different needs and challenges faced by these two types of landlords, the council hopes to maintain a balanced rental market.
However, concerns have been raised about the potential consequences of limiting rent hikes. Some council members worry that this could lead to more independent landlords selling their properties to institutional investors. If this trend were to continue, it could result in a reduction in the number of affordable rental units available in the city.
One councilwoman expressed concern about the potential increase in eviction filings as a result of rent hikes. She emphasized the importance of considering the impact on tenants and the potential for an eviction to homelessness pipeline. It is crucial for policymakers to find a balance between protecting tenants and ensuring that landlords can maintain their properties and cover their expenses.
The decision to lift the rent freeze and implement these new rules reflects the ongoing challenges faced by both landlords and tenants in Los Angeles. The city's 1979 rent control law, which ties rent hikes to inflation, has provided some stability for tenants in rent-stabilized units. However, it is essential for policymakers to regularly review and update these regulations to ensure that they are fair and effective in addressing the needs of both landlords and tenants.
In conclusion, the Los Angeles City Council's decision to lift the three-year rent freeze on rent-stabilized units is a significant development for landlords in the city. While the rent increase is limited to 4-6 percent, the decision to base it on inflation data from the past year helps to mitigate the potential impact on tenants. By distinguishing between independent and corporate landlords, the council aims to provide support to smaller landlords while also addressing concerns about housing costs and investor ownership. However, it is crucial for policymakers to monitor the effects of these changes and make adjustments as necessary to maintain a balanced rental market.