According to AB-1482, the Tenant Protection Act of 2019, the maximum that landlords can raise rents in California is 5% per year, plus the percentage change in the cost of living according to the consumer price index, or 10% of the lowest rent increase at any time during the 12 months (whichever is less). For example, with the high inflation in 2022, many areas are using the 10% rent increase limit because it's considerably lower than keeping up with the consumer price index. But remember that this only applies to properties subject to rent control, and there are exemptions to the rule that will be discussed below.
Not all property types are subject to California rent increase laws. Those properties include:
- Single-family homes and condos that are not owned by a corporation, REIT, or a corporation-owned LLC
- A duplex where the landlord lives in one of the units
- Mobile homes
- Schools and college dorms
- Commercial properties
- Buildings constructed within the past 15 years
- Rental properties managed by non-profit organizations
- Rental properties subject to a pre-existing local ordinance
Landlords with properties exempt from rent control can raise the rent as much as they like, as long as there are no other local laws they must obey. But they are required to provide notice of exemption from AB 1482 to their tenants so they are aware.
California landlord-tenant law only allows landlords to raise the rent at the end of the lease period, and limits increases to twice per year for month-to-month and other short-term leases. In most instances, landlords will only have the ability to raise the rent once every year if the lease period is that long. But, even if the lease period is shorter, landlords can only increase the rent twice per year in properties subject to rent control laws.
The amount of notice landlords must provide depends on several factors. For rent increases over 10%, landlords are required to give the tenants at least 90 days' notice. For all rent increases under 10%, landlords must provide 60 days' notice if the tenant has lived in the unit for more than a year. For tenants who have lived in the building for less than one year, 30 days notice is required.
In addition to the statewide rent increase limits, multiple cities impose additional rent controls. Those cities are:
- Berkeley: Multi-family properties built before June 1980 are subject to rent regulation. Local laws put a cap on not only rent prices, but also garbage and parking fees and set security deposit laws and eviction protocols.
- Beverly Hills: Rent increases are capped at 8% annually or shift with the consumer price index. Buildings constructed before September 20, 1978, with two or more units and a move-in rent of less than $600 are subject to rent control.
- East Palo Alto: Landlords can only increase the rent from June 1 to June 30 of a given year. Rent increases should not exceed 10%, including any fees for utilities, parking, or other services the landlord charges.
- Hayward: Annual rent increases are limited to 5%, and banked rent increases are capped at 10%. Any unit constructed before July 1, 1979, is subject to rent control.
- Los Angeles: Rent increases are capped at 8% annually and can only happen once yearly. But the landlord may increase up to 10% if a new roommate moves in.
- Los Gatos: Rent increases can go over 5% of the current monthly rent or 70% of the annual consumer price index change.
- Oakland: Annual rent increases shouldn't be greater than the current rate by 10% per year or 30% in 5 years.
- Palm Springs: Landlords are permitted to raise rents to 75% of the consumer price index.
- San Francisco: The San Francisco Rent Board determines annual rent increase rates. But landlords are permitted to submit requests to increase beyond the limits the Board reviews imposed.
- San Jose: Annual rent increases are capped at 5% unless the tenant vacated voluntarily or following a lawful eviction.
- Santa Monica: Annual rent increases are limited to 75% of the consumer price index of Los Angeles for the past 12 months.
- West Hollywood: Maximum rent increases are determined by the West Hollywood rent stabilization division and are typically based on 75% of the CPI.
California has many laws on the books that govern the amount of money landlords can charge in rent. If you own an investment property in California, you're wise to research the statewide and local laws that govern rent increases so you don't get yourself into trouble.