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On Wednesday, November 12, the Los Angeles City Council voted 10–2 to significantly revise the Rent Stabilization Ordinance (RSO), adopting a far more restrictive formula for allowable rent increases. The new methodology makes several substantial cuts:
Key Changes to the RSO Rent Increase Formula
- CPI percentage reduced from 100% to 90%
- Maximum annual increase (“ceiling”) lowered from 8% to 4%
- Minimum increase (“floor”) dropped from 3% to 1%
- Extra 1% increases for gas and/or electricity in master-metered buildings—roughly 20% of all RSO units—eliminated
- Additional 10% increase for dependent occupants on a lease removed
The updated formula is projected to take effect February 1, 2026, pending final ordinance language from the City Attorney. Given the contentious nature of the meeting and the limited 30-minute total public comment period, further adjustments appear unlikely.
How Did This Happen? A DSA-Led Shift
The push for changes originated with Council Member Nithya Raman, Chair of the Housing and Homelessness Committee. Raman’s initial proposal was even more aggressive—reducing increases to 60% of CPI, capping them at 3%, and eliminating the floor entirely. Council Members Ysabel Jurado (a Democratic Socialists of America member) and Heather Hutt backed the motion.
During the meeting, several amendments were introduced:
Amendments That Failed
Amendment 47E – Soto-Martinez Proposal
Council Member Hugo Soto-Martinez (DSA, RSO renter, and 2026 candidate for re-election) sought to revise the formula to 75% CPI, with a 3% cap and no floor. The amendment was supported by Council Members Hernandez (DSA), Raman, Jurado, Hutt, and McOsker.
It failed with only six votes.
Hernandez Amendment
Council Member Hernandez proposed eliminating the shelter component of CPI—representing 36% of the index and directly related to housing.
Only Hernandez, Hutt, Jurado, Raman, and Soto-Martinez voted in favor, so
the amendment failed.
Amendments That Passed
Amendment 47D – Harris-Dawson Formula
Council President Marqueece Harris-Dawson proposed adjusting the base calculation to 90% of CPI.
Passed with four “no” votes: Hernandez, Hutt, Jurado, and Soto-Martinez.
Amendment 47B – Yaroslavsky, Rodriguez, McOsker
This amendment reduced the ceiling to 4% and the floor to 1%, which ultimately became the core of the final policy.
Only Soto-Martinez voted against it.
Amendment 47A – John Lee
Council Member John Lee proposed an additional 1% increase for small owners (10 or fewer units), similar to the County’s RSO structure.
However, he withdrew the amendment without discussion, leaving small property owners without relief—despite LAHD’s testimony that small owners are being pushed out of the market and forced to sell to large corporate buyers.
Amendment 47C – Harris-Dawson, Yaroslavsky, Raman
This amendment directed LAHD to study requiring entire replacement buildings—not just one-for-one replacement units—to fall under RSO rules whenever an existing RSO building is demolished.
The amendment passed unanimously and is expected to further depress already weakened RSO property values, narrowing the pool of buyers to developers intending to build for-sale luxury housing, townhomes, condominiums, or multi-ADU configurations.
Summary of Changes to the RSO Formula
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney
