After the Los Angeles City Council approved an update to the Rent Stabilization Ordinance to set allowable increases at 4% in November, a proposal to provide landlords with no more than 10 rental units an additional 1% increase was sent back to committee Tuesday for further discussion.
Council members John Lee and Monica Rodriguez introduced the proposal, which was sent to the Housing and Homelessness Committee for consideration. A representative for Lee did not immediately respond to a request for comment.
In a statement to LAist, the councilman said the “adjustment recognizes the difference between a family that owns a few units and a large corporate operator.” He emphasized that the goal is to “keep small landlords in the system and prevent the loss of rent-controlled homes.”
The council instructed the city attorney to draft an updated RSO, in order to codify changes they approved in November. Once the final language is approved, it will need approval by Mayor Karen Bass.
Under the proposed update, the RSO would use a new formula to set annual allowable increases for roughly 650,000 rental units. The RSO would establish a 1% floor and a 4% ceiling, and eliminate additional charges for electricity and gas, as well as for renters with extra dependents such as children.
Council members also recommended updating the formula used to set rents to consider inflation, calculating 90% of the Consumer Price Index rather than 60%.
The change would be lower compared to the current rules that cap RSO units between 3% and 8% for annual rent hikes, with the addition of 1%-2% increases for utilities, totaling what could be a 10% increase for some renters.
At the time of the vote, Rodriguez supported the RSO changes while emphasizing a need to strike a balance.
“Let’s make sure that we don’t aid and abet the incredible cost of living in this city by adopting back-ended tax increases that further impact the very same people who, whether they provide the housing or live in the city of Los Angeles, are going to be impacted by our own hand, by our own decisions.”
As part of the plan, the council instructed staff to increase funding for repairs and rehabilitation measures to help mom-and-pop landlords who own between two and 10 units. The funding would come from Measure ULA and Los Angeles County Affordable Housing Solutions Agency. Elected officials also commissioned a study on the impacts RSO may have on future construction of housing units.
The RSO ordinance regulates rents for apartments built on or before Oct. 1, 1978.
Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, did not immediately respond to a request for comment via email.
Previously, landlord groups and property owners argued the RSO changes would make housing more expensive and harder to find. They also called for higher rent caps under the RSO.
Landlords say the updated formula will make it more expensive to provide housing, citing rising costs in the city such as utility rate increases exceeding the CPI, rising trash and inspection fees, and higher minimum wage increases affecting their operations, among other costs.
Landlords also cite an increase in insurance premiums, as well as the cost of maintaining buildings.
Meanwhile, tenant advocates have urged the council to deny any additional allowable rent increases.