A comprehensive guide to LA's Rent Stabilization Ordinance for small apartment building owners.
What Is the Los Angeles Rent Stabilization Ordinance (RSO)?
The Rent Stabilization Ordinance (RSO) applies to most multi-unit residential properties built before 1978 in the City of Los Angeles. It limits rent increases, regulates evictions, and sets rules for fees and relocations.
As a small owner, RSO determines:
- How often you can raise rents
- By how much
- What you must provide when you need to recover a unit or perform major work
2025–2026 Allowable Rent Increases
For the current period, LA has announced an allowable increase of 3%, with an additional 1% each if you pay for gas and/or electricity, up to a maximum of 5% in those cases.
Key points:
- Increases can only take effect once every 12 months per unit
- Written notice must be given at least 30 days in advance for increases under 10%
- Some buildings may also be affected by additional reforms that could cap hikes to 1–4% based on CPI going forward
How Rent Control Impacts Property Value
Rent control doesn't automatically mean your building is "bad"—but it does change:
- Future income growth assumptions
- Buyer pool (sophisticated investors vs. casual buyers)
- The value of vacant units and remodel potential
Well-maintained RSO buildings with below-market rents can still command strong pricing when buyers see a clear, legal path to long-term upside.
Operating in Compliance as a Small Owner
To stay out of trouble:
- Keep a clean paper trail of rent increases and notices
- Understand "just cause" eviction rules before serving any notice
- Consult qualified legal counsel for complex tenant situations
Pairing legal guidance with broker input on market rents can help you design a plan that's both compliant and economically rational.
When to Talk to a Broker
If you're wondering whether to invest more capital, refinance, or sell under the current and proposed rent control framework, a local multifamily specialist can help you model different scenarios and exits.
Quick FAQs
Q: Can I raise rent more if I remodel a unit?
A: It depends on the jurisdiction and whether the work qualifies for certain pass-throughs or falls under local rehab rules. Get legal advice before assuming major upgrades automatically justify big increases.
Q: Is a non-RSO building more valuable?
A: Often, yes—because future rent growth is less restricted. But location, unit mix, and condition can sometimes make a well-located RSO asset more desirable than a poorly located non-RSO property.