LA County wants to cap rent hikes at 3% for 52K units in unincorporated areas

Landlords across unincorporated areas of Los Angeles County may be subject to new rent caps.

The Los Angeles County Board of Supervisors voted 3-to-2 this week to rewrite rent stabilization rules to bar many landlords from raising rents by more than 3 percent a year, the Los Angeles Times reported.

Under the proposal, small property owners could increase rent by up to 4 percent, while owners of luxury units would be capped at 5 percent. The supervisors will need to vote again on the proposal before it can become law.

A majority of supervisors also agreed to extend a temporary 4 percent cap on rent increases in unincorporated areas through the end of December. If that passes, a permanent 3 percent cap would take effect after that.

The cap would apply to 51,700 rent-controlled units built before 1995 in unincorporated L.A. County, mostly in East L.A., South L.A. and the San Gabriel Valley.

Landlords warned of a “tsunami of displacement” as rising insurance costs coupled with strict limits on rent have forced them to consider selling their properties. Some said they’ve tried for years to keep rents affordable, but inflation means they now need to raise their rents.

Supervisor Holly Mitchell, who led the proposal, said it is intended to keep housing affordable for renters without squashing the ability of mom-and-pop landlords to survive. Landlords, however, say rising insurance costs have pushed them to the brink of selling their properties.

“My goal — always — is to slow the tide of the corporatization of rental property ownership across L.A. County,” Mitchell said at Tuesday’s board meeting. “When that happens, affordability goes out the window.”

Supervisors Janice Hahn and Kathryn Barger, who voted against the proposal, said they were concerned the government was overburdening smaller property owners who rely on the rent to pay their bills.

“We’ve once again put these struggles on the back of landlords,” Barger said.

The county adopted a rent stabilization ordinance in November 2019, using a calculation based on inflation to determine the maximum rent increase. But the cap was never really put to the test, according to the Times.

Four months after it passed, the pandemic hit and the county banned all rent increases. As the pandemic slowed, the supervisors approved a temporary rent hike cap of 3 percent — and then 4 percent — which they said could keep tenants from becoming homeless.

In July, after multiple extensions of the temporary cap, the county was supposed to return to the 2019 formula, which would have allowed landlords to hike rents by up to about 4.3 percent this year and up to 8 percent afterward.

But a majority of supervisors said that returning to the old calculation would destabilize tenants on the verge of eviction.

The California Apartment Association, which represents apartment owners, called the proposal “draconian.”

“Rather than alleviating intense regulatory pressures, an unworkable policy is being considered,” Fred Sutton, an association spokesman in Los Angeles, said in a statement. “This will exacerbate the housing crisis by discouraging investment in new and existing rental housing and ultimately hurt all residents.”

— Dana Bartholomew