Los Angeles Will Cap Rent Hikes to Help Struggling Tenants

30 December 2025

Los Angeles is preparing to enact one of the most significant changes to its housing landscape in more than four decades by imposing new limits on annual rent increases that many city residents hope will offer long-awaited relief from the relentless climb in housing costs, a decision that reflects mounting pressure on policymakers to make the city more affordable while setting the stage for intense debate about the future of rental housing in America’s second-largest metropolis.

Beginning in early 2026, landlords of most multifamily apartment buildings within the city’s limits will no longer be able to raise rents by unlimited amounts or by double-digit percentages; the newly approved rent stabilization ordinance will restrict annual rent hikes to a range of one percent to four percent depending on inflation, a formula tied to 90 percent of the regional Consumer Price Index that is designed to give tenants more predictability and breathing room in planning their monthly budgets.

The decision to cap rent increases at these levels marks the first major overhaul of Los Angeles’s Rent Stabilization Ordinance in roughly forty years and comes after years of mounting concern that skyrocketing rents were pushing long-time residents out of neighborhoods they helped build and making it harder for working families, seniors and young people to stay in the city where they work, go to school and raise children.

Under the old system, some rent-controlled units could see annual increases of up to eight percent, and even higher if landlords were permitted to pass utility costs onto tenants; the updated law eliminates additional charges for gas and electricity and sets firm limits that many housing advocates argue will prevent sudden jumps in costs that can destabilize households.

Mayor Karen Bass, who signed the updated ordinance into law in late 2025 after it was approved by the Los Angeles City Council, framed the reform as a fundamental step toward making the city a place where people can afford to live long-term without fear of being priced out or facing constant financial strain.

In announcing the new policy, Bass emphasized that rent affordability is not a luxury but a basic necessity, invoking the image of parents who should not have to choose between food and shelter for their families. Councilmember Hugo Soto-Martínez and tenant advocacy groups were also vocal supporters, arguing that the ordinance will support stability for renters who are often vulnerable to market swings and sharp increases that bear little relation to wage growth.

The change will affect roughly 650,000 units in the city many of them in buildings constructed before October 1978 that fall under the Rent Stabilization Ordinance representing a substantial share of the city’s rental housing stock and touching the lives of a large portion of Angelenos, since the majority of city residents rent rather than own their homes. Many tenants in areas such as Koreatown, South Los Angeles and the Westside are expected to see the impact directly as landlords prepare notices that their upcoming rent increases will be bounded by the new caps rather than by the broader swings allowed under the old rules.

Yet even as tenants applaud these reforms, the policy’s critics including many property owners, landlords and industry advocates, warn that limiting rent increases so strictly could discourage investment in rental housing and hamper the ability of owners to maintain properties, particularly smaller landlords who may already be struggling with rising insurance premiums, maintenance costs and the broader economic challenges of managing aging buildings. These voices argue that while caps may offer short-term relief for renters, they risk reducing the overall supply of available housing by making Los Angeles less attractive to investors and developers, a concern that cuts to the heart of the city’s larger housing shortage crisis.

The debate over rent control and affordability in Los Angeles mirrors similar discussions happening in other major cities across the United States, where skyrocketing housing costs have become central political issues. In places like New York and San Francisco, policymakers have wrestled with balancing tenant protections and incentives for developers, often with mixed results, and Los Angeles’s move to cap annual increases at four percent places it at the forefront of cities attempting to use rent policy as a lever to stabilize communities under pressure.

Proponents of the reform note that for many renters, predictable increases tied to inflation will help keep basic needs within reach, especially for families that have seen their incomes stagnate even as the cost of living continues to rise. The removal of certain utility-based increases and prohibitions on raising rent when additional family members move in such as children or elderly relatives, are part of a suite of tenant protections intended to make housing costs more equitable and predictable for the city’s most vulnerable residents.

The new law will not apply to new units built after certain dates or to single-family homes exempt under state law, and developers and advocates for housing supply have argued that a sustainable path forward must also include building more housing, especially affordable units, alongside measures that protect current renters. Nevertheless, the rent cap represents a historic shift in how Los Angeles manages its rental market, and its effects will be watched closely in the coming months as tenants and landlords alike adjust to the new normal.

Mayor Bass and city leaders have indicated that this is just one step in a broader strategy to address homelessness, economic inequity and affordability in Los Angeles, which also includes accelerating the production of affordable housing units and improving tenant legal protections to prevent unjust evictions. As 2026 unfolds, this rent cap is expected to shape conversations about the future of community stability, housing equity and economic mobility in one of America’s most dynamic and diverse cities.