A Los Angeles city councilman wants to lower the annual rent cap to 60% of the Consumer Price Index, the same formula used in San Francisco.

At present, the annual cap on rent increases for rent controlled housing in L.A. comes to 4%, a figured determined by the rate of inflation. The city’s ordinance also includes a 3% floor, meaning rents can never be capped below 3% no matter what happens to CPI.

Under a proposal by Councilman Mike Bonin, the rent control ordinance would have no floor and be set at 60% of CPI, regardless of how low the rate of inflation gets. Right now, the CPI in Los Angeles is 3.1, so if Bonin’s proposal were in effect today, rents for housing that falls under the city’s rent control law would be capped at 1.86%.

“The 3% floor has been the backbone of the city’s’ Rent Stabilization Ordinance since 1978,” said Beverly Kenworthy, vice president of public affairs for the California Apartment Association in Los Angeles. “The 3% floor has long existed as a safety mechanism for housing providers. It ensures they do not fall victim to costs that rise independent of CPI.”

The Consumer Price Index does not take into account rising operational expenses such as real estate taxes, insurance, the city’s gross receipt tax, utilities, water, sewer, waste franchise increases, pest control, repairs and maintenance, earthquake retro-fitting, painting, cleaning, landscaping, vacancies, management administration, advertising, legal costs and a whole host of other expenses incurred through operating rental housing. These costs are increasing significantly in the city of Los Angeles.

The change to the rent control formula is part of a broader package of proposals related to housing.

You can read the 3% elimination proposal HERE.
You can read the other proposals introduced HERE and HERE.

CAA is encouraging its members to contact City Council members and voice their opposition to the proposed changes to L.A.’s rent control formula. Council contact information is as follows:

Council President-Nury Martinez:
ackley.padilla@lacity.org
213 473-7006

Gil Cedillo:
debby.kim@lacity.org
213 473-7001

Paul Krekorian:
karo.torossian@lacity.org
213 473-7002

Bob Blumenfield:
lisa.hansen@lacity.org
213 473-7003

David Ryu:
nicholas.greif@lacity.org
213 473-7004

Paul Koretz:
joan.pelico@lacity.org
213 473-7005

Monica Rodriguez
doug.tripp@lacity.org
213 473-7007

Curren Price
curtis.earnest@lacity.org
213 473-7009

Marqueece Harris Dawson:
soloman.rivera@lacity.org
213 473-7008

Herb Wesson
duran.williams@lacity.org
213 473-7010

Mike Bonin
chad.molnar@lacity.org
213 473-7011

John Lee
Hannah.lee@lacity.org
213 473-7012

Mitch O’Farrell
jeanne.min@lacity.org
213 473-7013

Joe Buscaino
jenny.chavez@lacity.org
213 473-7015

Jose Huizar
paul.habib@lacity.org
213 473-7014

Questions? Do not hesitate to contact Fred Sutton, CAA’s senior vice president for Los Angles, at fsutton@caanet.org.