The Los Angeles City Council Friday gave final approval on a proposal updating the Rent Stabilization Ordinance, capping annual rent increases between 1% and 4%, and removing additional charges for utilities.
In a 12-2 vote, council members approved, for a second time, changes to the RSO, authorizing the first major overhaul to regulations governing rent control for apartments built on or before Oct. 1, 1978, in more than four decades. The updates will establish a new formula to set annual allowable increases for roughly 650,000 rental units, calculating 90% of the Consumer Price Index.
The changes will establish a 1% floor and a 4% ceiling, and remove additional charges for electricity and gas.
Council members John Lee and Monica Rodriguez voted against the proposal, while Councilman Curren Price recused himself, as he is a landlord.
With the council’s approval, the ordinance will be sent to Mayor Karen Bass for her signature or veto, which is required before the RSO update can be enacted.
Once signed by the mayor, it will take 30 days to go into effect.
The change will 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.
There are two other proposals that will be discussed by the Housing and Homelessness Committee in the future related to the RSO.
Lee and Rodriguez are seeking to provide small landlords with no more than 10 rental units an additional 1% in allowable rent increase.
Additionally, the council is attempting to clarify language surrounding the elimination of a surcharge in rent for renters with extra dependents.
Councilman Adrin Nazarian previously suggested defining dependents under a similar definition used by the Internal Revenue Service, which covers elderly parents, family members with a disability and minors.
However, the IRS definition is specific to U.S. citizens, raising concerns by city officials about individuals with different legal status.