Andres Diaz

Managing Director, Multifamily Investments · Kingside Investment Group

How Much Can I Raise Rent in Los Angeles in 2026?

Most RSO-covered LA buildings are capped at 3% through June 30, 2026. Starting July 1, 2026, a new formula sets the RSO increase at 90% of CPI, with a 4% maximum and a 1% floor. Non-RSO buildings fall under AB 1482 instead, confirmed at 8.7% (AAGLA, CAA), effective August 1, 2026.

Los Angeles apartment building owners are working through the most significant change to the Rent Stabilization Ordinance formula in years. As of July 1, 2026, a new RSO rent increase formula takes effect citywide, replacing the structure owners have used for the current period. Understanding exactly what changed, what is still in effect for buildings outside the RSO, and how these caps affect the value of your building is essential before you serve your next rent increase notice or list a property for sale.

There are three separate frameworks an LA apartment owner needs to check before applying an increase: the City of Los Angeles RSO (which just changed), statewide AB 1482 for buildings the RSO does not cover, and, for owners in unincorporated LA County, a separate county rent stabilization ordinance. These frameworks do not overlap on the same building, but owners regularly confuse which one applies to their property, and that mistake can mean an improperly served notice, a tenant dispute, or a City compliance issue.

Los Angeles apartment owners can use this guide to see the current RSO cap through June 30, 2026, the new formula effective July 1, 2026, the AB 1482 cap that applies to non-RSO buildings, and what LA County unincorporated owners need to check separately. The guide also covers how these caps affect the underwriting math a buyer runs when evaluating your building for purchase. The data draws on the Los Angeles Housing Department RSO Overview and Rent Increase Calculator, and an Apartment Association of Greater Los Angeles member alert on the new formula ordinance.

What Is the Current RSO Rent Cap Through June 30, 2026?

For the period running July 1, 2025 through June 30, 2026, RSO-covered buildings in the City of Los Angeles are capped at a 3% annual rent increase. This is the figure that has applied to most rent increase notices served over the past year for RSO-covered units, meaning buildings that received a certificate of occupancy on or before October 1, 1978 within City of LA boundaries.

One important change already took effect mid-cycle. As of February 2, 2026, landlords can no longer add the previously allowed utility percentage add-on on top of the base 3% figure. Before that date, owners with master-metered utilities could sometimes apply an additional percentage tied to utility costs. That add-on is gone. If you served a notice before February 2, 2026 that included the utility add-on, that increase is not affected retroactively, but any new notice served after that date cannot include it.

The 3% figure, and the elimination of the utility add-on, represent the final stretch of the prior RSO formula for Los Angeles RSO-covered buildings. Owners who have been operating under this structure for the past year need to understand that July 1, 2026 marks the transition to a materially different, and lower, formula going forward.

Owners who served notices under the current 3% cap earlier in this cycle, before the utility add-on was eliminated on February 2, 2026, do not need to revisit or amend those notices. The elimination applies prospectively to notices served on or after that date. If you have any increase notices currently in preparation that still reference the utility add-on, those need to be corrected before they go out, regardless of when the underlying increase was first discussed with your property manager or attorney.

What Is the New RSO Rent Increase Formula Effective July 1, 2026?

The Los Angeles City Council enacted a new RSO rent increase formula on January 24, 2026, effective July 1, 2026. This is a structural change, not just a new number. Under the new formula, the allowable annual increase equals 90% of the CPI All Items figure, subject to a 4% maximum and a 1% minimum floor.

Compare that to the prior structure: the old formula allowed a maximum of 8% and had a 3% minimum floor. The new formula cuts the ceiling in half, from 8% to 4%, and drops the floor from 3% down to 1%. In a low-inflation year, owners could see allowable increases as low as 1%. In a high-inflation year, the increase is now hard-capped at 4% regardless of how high CPI runs.

Two other add-ons were eliminated in the same ordinance. The master-meter utility add-on, discussed above, is gone as of February 2, 2026. The 10% additional-occupant add-on, which previously allowed owners to apply an extra increase when a unit gained an additional occupant, has also been eliminated. Owners who relied on either of those add-ons to boost effective rent growth on RSO units no longer have that option under any circumstance going forward.

For owners managing multiple RSO buildings, this is the single most important operational change to plan around this year. Income growth projections that assumed an 8% ceiling, or that built in a utility or occupant add-on, need to be revised. Every RSO-covered building's growth assumption should now be rebuilt around a hard 4% maximum, a 1% floor, and an effective date of July 1, 2026, whether the projection is for internal budgeting, refinance underwriting, or a pro forma shown to a prospective buyer.

What Is the AB 1482 Rent Cap for Non-RSO Buildings?

If your building was constructed after October 1, 1978, or otherwise falls outside RSO coverage, the RSO formula above does not apply to you. Instead, your building is governed by AB 1482, the California Tenant Protection Act of 2019, codified at Civil Code 1947.12. AB 1482 is a statewide law, not a City of Los Angeles ordinance, and it uses its own separate formula: 5% plus local CPI, capped at 10% total, whichever is lower.

The AB 1482 figure resets every August 1 based on April CPI data for the applicable region. For the Los Angeles-Long Beach-Anaheim area, the cap is confirmed at 8.7% effective August 1, 2026 (5.0% statutory base plus 3.7% regional CPI), independently corroborated by both the Apartment Association of Greater Los Angeles member bulletin and the California Apartment Association's 2026 CPI update. Because this figure is regional and recalculated annually, confirm it against next year's AAGLA or CAA bulletin before relying on it after August 2027.

The gap between the RSO's new 4% maximum and AB 1482's confirmed 8.7% is significant, more than double. Owners of AB 1482-covered buildings have materially more room to grow rent in percentage terms than owners of RSO-covered buildings under the new formula, which is one of the reasons buyers underwrite the two building types differently.

AB 1482 also carries its own exemption list, and owners should not assume coverage just because a building falls outside RSO. The law exempts single-family homes and condominiums where the owner is not a real estate investment trust, corporation, or LLC with a corporate member (with required written notice to tenants), buildings within a rolling 15-year new-construction window, deed-restricted affordable housing, and owner-occupied duplexes where the owner lives in one unit. A building permitted in 2012 currently sits inside AB 1482 coverage; a building permitted more recently may still fall inside the 15-year exemption window depending on the current date. Owners should check the exact permit date against the current rolling cutoff rather than estimating.

Unlike the RSO, AB 1482 does not require annual registration with a city department. There is no LAHD-style portal for AB 1482 compliance. The obligation is statutory and self-administered: the owner is responsible for calculating the correct cap, serving proper notice, and retaining documentation in case of a dispute. That self-administered structure is why the confirmed 8.7% figure, sourced to AAGLA and CAA rather than a single broker post, matters: it is the number that should appear on your notice, not an estimate (California Apartment Association, 2026 CPI Update; Apartment Association of Greater Los Angeles member bulletin).

Do LA County Unincorporated Areas Have Separate Rent Rules?

Neither the City of LA RSO nor AB 1482 is necessarily the full picture for every owner. If your building sits in an unincorporated area of LA County, meaning it is not within the boundaries of any incorporated city such as Los Angeles, Long Beach, Glendale, or Pasadena, a separate county rent stabilization ordinance may apply with its own caps and procedures. This framework is administered by the Los Angeles County Department of Consumer and Business Affairs (DCBA), not LAHD.

Owners in unincorporated county territory should not assume that City of LA RSO rules, or even AB 1482, automatically apply without checking. Contact the LA County Department of Consumer and Business Affairs Rent Stabilization Program directly to confirm which rules govern your specific property, since coverage boundaries and caps in unincorporated areas can differ from both the City ordinance and the statewide law (Los Angeles County DCBA, Rent Stabilization Program). This distinction is not academic. Owners who manage a portfolio spanning both incorporated City of LA parcels and unincorporated county parcels, which is common for multifamily investors who acquired buildings opportunistically across submarkets, need to treat each address as its own compliance question rather than applying one rule across the whole portfolio.

Because the county ordinance is administered separately from LAHD, the notice forms, registration requirements, and dispute resolution process can differ from what an owner is used to under the City RSO. If you have never operated a building under the county framework, call DCBA before your next notice goes out: confirming county coverage takes one phone call, while serving an improperly calculated notice can delay a rent increase by the full 30 to 90 days required to re-serve it correctly.

How Do RSO, AB 1482, and County Rent Caps Compare?

The table below summarizes how Los Angeles rent increase caps compare across the three frameworks in effect this year.

How to Confirm Which Framework Applies to Your Building

Coverage is determined by building permit date and jurisdiction, not by appearance. The starting question is simple: does your property sit within the City of Los Angeles, and did it receive a certificate of occupancy on or before October 1, 1978? If yes to both, the RSO applies, and the formula effective July 1, 2026 governs any increase you serve going forward. If your building is in the City of LA but was built after that date, and does not qualify for a specific exemption, AB 1482 applies instead.

If your building sits in an unincorporated part of LA County, check with DCBA before assuming either framework applies. Owners with a mixed portfolio, some pre-1978 City buildings and some newer or county properties, should map each address individually rather than applying a single assumption across the whole portfolio. The LAHD RSO Rent Increase Calculator (housing.lacity.gov) is the most direct way to confirm the applicable RSO figure for a specific unit and increase date.

Consider a practical example. An owner holds three buildings: a 12-unit building in Koreatown permitted in 1962, an 8-unit building in Silver Lake permitted in 1986, and a 6-unit building in an unincorporated pocket near East LA. The Koreatown building is squarely RSO-covered and falls under the new 90%-of-CPI formula. The Silver Lake building, permitted after October 1, 1978, is governed by AB 1482 instead, with its higher and separately calculated cap. The East LA building requires a call to DCBA, since county coverage is not automatic just because the property is geographically near the City. Three buildings, three different compliance paths, and confirming each one against the LAHD RSO Rent Increase Calculator or a direct call to DCBA takes minutes, versus the 30 to 90 days it takes to correct and re-serve a notice calculated under the wrong framework.

What Notice Do I Need to Give Before Raising Rent?

Regardless of which framework applies, California law generally requires 30 days' written notice for rent increases of 10% or less within a 12-month period, and 90 days' written notice for increases above 10%. Because the new RSO maximum is now 4%, and the AB 1482 cap in Los Angeles remains under 10%, the 30-day notice period applies to the overwhelming majority of increases owners will serve this year.

Owners should apply no more than one increase per unit per 12-month period, calculated from the date of the last increase for that specific unit, not on a calendar-year basis. A notice that does not reference the correct formula and effective date can create a dispute that delays the increase or invites a tenant challenge, so confirm the applicable cap before drafting the notice rather than after a tenant pushes back.

The notice itself should state the new rent amount, the effective date, and reference the applicable legal basis, whether that is the RSO's new formula or the AB 1482 statutory cap. Owners transitioning from the old RSO structure to the new one should be especially careful with notices drafted in June 2026 for increases taking effect in July 2026 or later. A notice prepared using the old 3% cap and utility add-on assumptions, but not served until after July 1, 2026, should be recalculated under the new formula before it goes out. Serving an outdated calculation still triggers the same notice clock, so an owner who has to correct and re-serve loses the full 30 days again, not just the time it took to catch the error.

Does Vacancy Decontrol Still Apply Under the New Formula?

None of the changes to the Los Angeles RSO formula affect vacancy decontrol. Under the Costa-Hawkins Rental Housing Act of 1995 (Civil Code 1954.53), when an RSO tenant voluntarily vacates or is removed for a lawful at-fault cause, the owner may still reset rent to market rate for the next tenancy. The unit then becomes subject to the new RSO cap again going forward, starting from that new, higher rent.

With the new formula lowering the ceiling on in-place rent growth to 4% a year, vacancy decontrol becomes a relatively more important lever for owners of RSO buildings with below-market rents. The gap between what you can grow an occupied unit's rent versus what you can capture on turnover has widened under the new formula, which is a factor buyers will weigh more heavily when underwriting RSO assets going forward.

There are still important limits to keep in mind. Decontrol only applies to voluntary vacancies or lawful at-fault evictions. If a no-fault cause is used, such as an owner move-in or substantial rehabilitation, the unit can be subject to re-control rules that prevent the owner from simply resetting rent to market on the next tenancy. Owners who are considering using a no-fault eviction as a way to reach market rent faster under the new, lower RSO ceiling should not treat that as a straightforward shortcut. The re-control rules in that scenario are specific, and misuse can expose an owner to a tenant right-of-return claim that reinstates the prior below-market rent for up to five years.

What the New Cap Means for Your Building's Sale Value

Buyers underwrite multifamily assets primarily on current net operating income and the projected trajectory of future income. A lower RSO ceiling directly slows that projected trajectory for RSO-covered buildings. A building that a buyer previously modeled growing at up to 8% annually on in-place rents now has that growth capped at 4%, with a floor as low as 1% in low-inflation years. That is a meaningful change to the income growth assumption in any pro forma.

A lower RSO ceiling does not mean RSO buildings lose value outright. The value-add story for RSO buildings with rents well below market shifts more heavily toward vacancy decontrol and unit turnover, and less toward in-place rent growth on occupied units. AB 1482 buildings, with a materially higher cap, become comparatively more attractive on income growth grounds for Los Angeles sellers, which is a factor sellers of AB 1482-covered buildings should understand when setting price expectations this year.

Think through what this means for a typical RSO building where rents currently sit around 70% of market. Under the old formula, an owner modeling in-place growth alone could reach an 8% annual increase in a high-CPI year, which meaningfully narrowed the gap to market rent over a five-to-seven year hold even without turnover. Under the new formula, that same in-place growth is hard-capped at 4%, and in a low-CPI year could be as low as 1%. Closing the gap to market rent now depends far more heavily on how quickly units turn over than it did a year ago. Buyers evaluating that same building today will build a more conservative income growth curve into their model unless the rent roll shows a track record of regular turnover.

Sellers who are pricing a building for market this year should not use last year's growth assumptions in their own pro forma, and should expect sophisticated buyers to flag the difference immediately during due diligence. Presenting an accurate current rent roll, a realistic market rent comparison, and clear documentation of tenancy lengths remains the most effective way to support pricing, since it lets a buyer underwrite the vacancy decontrol upside on their own terms rather than having to first correct an outdated growth assumption baked into the asking price.

If you are weighing whether to sell now, ahead of a full cycle under the new formula, or hold and manage through the lower ceiling, get a current property valuation before deciding. The right analysis compares your specific rent roll, tenancy lengths, and turnover history against what the new formula actually means for your projected NOI growth, which for most RSO-covered buildings now tops out at 4% annually on in-place units rather than the 8% buyers priced in a year ago.

What Is My Building's 2026 Rent Increase Cap at a Glance?

Los Angeles apartment owners can use this table to find their 2026 cap in seconds.

Frequently Asked Questions

How much can I raise rent in Los Angeles in 2026?

The applicable cap depends on which framework covers your building. For RSO-covered buildings, the current period through June 30, 2026 caps increases at 3%, with the utility add-on eliminated as of February 2, 2026. A new RSO formula takes effect July 1, 2026, setting the allowable increase at 90% of CPI with a 4% maximum and a 1% minimum floor. For non-RSO buildings, AB 1482 applies instead, confirmed at 8.7% for the Los Angeles area effective August 1, 2026 per AAGLA and California Apartment Association bulletins.

What is the new RSO rent increase formula effective July 1, 2026?

The new formula, enacted January 24, 2026, sets the allowable annual increase at 90% of the CPI All Items figure, with a 4% maximum (down from 8%) and a 1% minimum floor (down from 3%). It also eliminates the master-meter utility add-on and the 10% additional-occupant add-on.

What is the current RSO rent cap for the period ending June 30, 2026?

RSO-covered buildings are capped at a 3% annual increase for the period from July 1, 2025 through June 30, 2026. As of February 2, 2026, landlords can no longer add the previously allowed utility percentage add-on on top of that figure.

What buildings are covered by the Los Angeles RSO?

The RSO generally covers residential rental buildings in the City of Los Angeles that received a certificate of occupancy on or before October 1, 1978. Coverage is determined by permit date, confirmable through the LAHD property registry.

How is AB 1482 different from the RSO?

AB 1482, codified at Civil Code 1947.12, is a statewide law covering buildings not subject to a stricter local ordinance, mostly post-1978 construction. Its cap is 5% plus local CPI, capped at 10% total, confirmed at 8.7% for the LA area effective August 1, 2026 (AAGLA, CAA), and resets every August 1. The RSO is a separate City of LA ordinance with its own formula, administered by LAHD.

Do LA County unincorporated areas have their own rent control rules?

Yes. Unincorporated LA County areas can be subject to a separate county rent stabilization ordinance with different caps than either the City RSO or AB 1482. Confirm applicable rules directly with LA County DCBA.

How much notice do I have to give a tenant before raising rent?

Generally 30 days' written notice for increases of 10% or less, and 90 days' written notice for increases above 10%. Since both the new RSO cap and current AB 1482 cap fall under 10%, the 30-day notice period applies to most increases.

Can I raise rent to market rate when a tenant moves out?

In most cases, yes. This is vacancy decontrol under the Costa-Hawkins Rental Housing Act of 1995. When an RSO tenant voluntarily vacates or is removed for a lawful at-fault cause, the owner may reset rent to market for the next tenancy.

Does the new 2026 RSO formula apply retroactively to increases I already gave?

No. The new formula applies to increases taking effect on or after July 1, 2026. Increases already served and in effect under the prior 3% cap structure are not retroactively adjusted.

How does a rent increase cap affect what a buyer will pay for my apartment building?

The applicable cap directly shapes projected NOI growth in a buyer's underwriting. A building capped at 4% under the new RSO formula has a slower income growth trajectory than a comparable AB 1482 building capped near 8-10%, and buyers price that difference into their offer.

Where can I confirm the exact allowable rent increase for my specific building?

For RSO buildings, use the LAHD RSO Rent Increase Calculator at housing.lacity.gov or contact LAHD directly. For AB 1482 buildings, confirm the current regional figure with a property manager, attorney, or the California Apartment Association. For unincorporated county areas, contact DCBA.

Andres Diaz, Managing Director, Multifamily Investments

CA DRE #01956479 · Kingside Investment Group

Andres Diaz has closed 169 multifamily transactions totaling $336.5M and 1,700+ units across LA County, representing apartment building owners through changes in rent control law, tenant relations, and value-add repositioning. On questions like this one, he helps owners confirm which formula actually governs a specific building, City RSO, AB 1482, or county rules, before a rent increase notice goes out, since serving the wrong cap risks an invalid increase and a 30 to 90 day delay.