The current Los Angeles RSO formula ranges from 1% to 4%, with a 3% annual allowable increase from July 1, 2026 through June 30, 2027.
The Current RSO Formula
Effective February 2, 2026, the City of Los Angeles changed the annual Rent Stabilization Ordinance increase formula. The annual percentage is based on 90% of the applicable Consumer Price Index calculation, subject to:
- A 1% minimum
- A 4% maximum
For increases effective from July 1, 2026 through June 30, 2027, the Los Angeles Housing Department states that the allowable annual RSO increase is 3%.
The annual adjustment may generally be applied once every 12 months. It is not cumulative or retroactive.
Utility Add-Ons Changed
Beginning February 2, 2026, the annual RSO increase cannot include an additional percentage for utilities. The City also changed the treatment of rent increases tied to an additional dependent in the tenancy. Owners should use the current LAHD bulletin rather than older summaries when preparing notices.
Which Properties May Be Covered
Rental units in properties built on or before October 1, 1978 may be subject to the Los Angeles RSO. A construction date alone is not a complete legal determination. Owners should verify the property's status through the City's records, including ZIMAS, and consult qualified counsel when coverage is uncertain.
The RSO is a City of Los Angeles ordinance. Nearby cities such as Santa Monica, West Hollywood, Beverly Hills, Culver City, Burbank, and Glendale operate under different local or state frameworks.
Why the Formula Matters in Multifamily Underwriting
For a sale or valuation, the applicable rent rules affect projected income, loss-to-lease assumptions, tenant rollover analysis, and the time required to reach a buyer's modeled rent levels. A buyer should not underwrite every pre-1978 building using the same assumptions.
A property review should distinguish among:
- Current lawful rent for each unit
- Date of the last increase
- RSO registration and payment status
- Tenant move-in dates and lease terms
- Vacant units and legally established rents
- Approved pass-throughs or other adjustments
- Units governed by a different local or state rule
Before Serving a Rent Increase Notice
Confirm the property's coverage, the current annual percentage, the timing of the previous increase, notice requirements, and any property-specific restrictions. The 3% figure is not a universal allowance for every rental unit in Los Angeles County.
Sources
- Los Angeles Housing Department: current renter protections and RSO increase information
- Los Angeles Housing Department: Allowable Rent Increase Bulletin
- Los Angeles Housing Department: what is covered under the RSO
This article is for general information and is not legal advice. Verify current rules with LAHD and qualified counsel before changing rents or serving notices.
Understanding a Building's Regulatory Profile
To discuss how a property's rent regulation and operating history affect its market position, request a property valuation.