Los Angeles housing officials have released a long-awaited report recommending changes to the city’s rent control policies.
If adopted by the city council, the new proposals would considerably lower rent hikes next year for the 42% of L.A. residents who live in rent-controlled housing.
The L.A. Housing Department’s recommendations stem from an economic study commissioned by the city and first published by LAist , which obtained it through a public records request. That study found that L.A.’s existing rules have allowed annual rent increases to outpace inflation at rates substantially higher than what is permitted in most other California cities with rent control.
Breaking down the proposed changes
Annual rent increases are always determined by how high or low inflation has been running in the L.A. area.
The housing department’s November report makes a host of recommendations for changing the formula, including:
- Reducing the maximum annual allowable rent hike from 8% to 5%.
- Lowering the floor on rent increases — the minimum landlords can charge every year, even if their costs are not rising — from 3% to 2%.
- Removing a provision that lets landlords increase rents by another 1% if they cover a tenant’s gas bill, plus an additional 1% if they also pay for electricity.
- Changing a key part of the formula for how increases are determined: inflation. Instead of basing it on the Consumer Price Index that includes housing, the city would use the index that excludes it. Rising housing costs play a big role in inflation, as you can see in the chart below.