For properties whose rent increases are governed by City Ordinance No. 20-03, the current rent cap is 3% or CPI (Consumer Price Index) whichever is greater. Pursuant to the Ordinance, the CPI timeframe, as published by the Bureau of Labor Statistics, is September to September (Los Angeles Area). The rent cap as of May 2020 is 3.0% for properties whose rent increases are governed by the City.
In October 2020, if the City determines the rent is less than 80% of Fair Market Rental Values (FMRV), as determined by the U.S. Department of Housing and Urban Development (HUD), an owner will have the option to do a subsequent rent increase up to the maximum 5% allowed.
Example: In February 1, 2020, an owner increases rent by 3%. In October 2020, the City determines the rent amount is less than 80% of FMRV, therefore, the owner is allowed to do a subsequent 2% increase. After the 2% increase, if the rent is still less than 80% of FMV, in February 2021, the owner will be allowed to do an additional 5%.
For properties governed by State Law AB1482, the rent cap is 5% plus CPI, not to exceed 10%. The CPI timeframe, as published by the Bureau of Labor Statistics, is April to April. The Current CPI for April 2020, is .7%. The rent cap as of May 2020 is 5.7% for properties whose rent increases are governed by the State.