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Housing and Homelessness

As Inflation Soars, LA Tenants Are Getting Hit With Large Rent Hikes Despite Rent Control

A woman with dark brown hair, wearing a black T shirt, sits in front of a computer in a living room, reading a document in her hands
Magally Lopez reads the notice saying her rent will increase by 10% in August.
(David Wagner
/
LAist)
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With high inflation already hammering Californians at the gas station and grocery store, many are now facing another skyrocketing expense: double-digit rent hikes.

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As Inflation Soars, LA Tenants Are Getting Hit With Large Rent Hikes Despite Rent Control

Large rent increases are coming for many Los Angeles tenants despite state and local laws meant to stop landlords from passing on massive increases.

Because those laws allow rents to rise with inflation, some tenants are now getting hit with increases of up to 10% — levels unheard of in recent years.

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“It's certainly a new phenomenon after 20-plus years of having inflation rates in the one, two, three percent range,” said Shane Phillips with the UCLA Lewis Center’s Housing Initiative.

For renters already struggling with rising costs, “this is not going to make matters easier,” he said.

Why Landlords Can Charge More As Inflation Rises

Each law calculates allowable rent increases slightly differently. But they all tie rent hikes to inflation.

With L.A.’s consumer price index up a staggering 8.6% from last year according to the U.S. Bureau of Labor Statistics, those laws are now letting landlords pass on rent increases some tenants haven’t seen in decades.

Local rules on raising rents

California’s statewide Tenant Protection Act will allow increases of up to 10% starting in August. The city of Inglewood has approved 10% increases in rent-controlled buildings with up to four apartments (the maximum is 7.9% in larger buildings). Santa Monica recently approved 6% increases starting in September, up to a maximum of $140 per month.

Former Santa Monica rent control board commissioner Nicole Phillis said the city never approved such large rent increases during her term from 2014 to 2022.

Lower-income renters and seniors on fixed incomes will "have a really difficult time staying in their units, because these increases are at historic levels,” she said.

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USC researchers released a survey last year, before inflation really took off, showing that nearly two-thirds of L.A. County renters were already spending more than 30% of their income on rent.

Federal labor statistics show that since then, local wage gains have not kept up with inflation. That means many tenants could struggle to pay for large rent hikes without cutting back on other essentials like food, healthcare and fuel.

This bleak economic picture is pushing some policymakers to ask: Does it make sense to allow soaring inflation to drive L.A.’s already high rents even higher?

 A “for lease” sign showing a 2 bedroom is available. it's on the wall of a grey-brown apartment building with two stories
A “for lease” sign on an apartment building in the city of Los Angeles.
(David Wagner/LAist)

‘Life Is Just So Much More Expensive’

Last month, Magally Lopez got an email about the Pasadena apartment she has shared with her mom for more than a decade. It said their rent would be going up 10% starting in August. Lopez called her mom, and they sat down to discuss their budget.

“We just had a whole conversation about how life is just so much more expensive,” said Lopez, a recent college graduate working with disabled adults as a nonprofit case manager.

“My mom and I did discuss moving out,” Lopez said. “We used to have family that also lived in the same apartment complex, and most of them have also left.”

Pasadena currently has no local rent control. Tenants there are only covered by the statewide Tenant Protection Act, which applies to most apartments built more than 15 years ago. That law restricts annual increases to 5% plus inflation — up to a maximum of 10% per year.

I agree that a 10% rent increase is too high, and wish we had been able to do better.
— David Chiu, former California State Assemblymember

Lopez said she and her mom considered looking for a new apartment. But today’s rents are far higher than what they currently pay, even with a 10% increase on the way, so they’ll likely stay put for now. But Lopez said if these increases continue, they’ll eventually be forced out.

“I grew up here in Pasadena,” she said. “So it's a little sad to have to consider leaving home.”

Pasadena voters could soon change the rules on rent hikes in the city. After years of organizing, local tenant advocates have placed a rent control measure on the November ballot that would cap rent increases at 75% of inflation. The ballot measure proponents are not the only ones who say 10% annual increases are unsustainable.

“I agree that a 10% rent increase is too high, and wish we had been able to do better,” said David Chiu, San Francisco’s current city attorney and the former state lawmaker who crafted the Tenant Protection Act.

“We ended with a bill that gave millions of California renters new protections against egregious rent increases and predatory evictions, but it was not a perfect bill,” Chiu said in an email. “I always hoped it would be a starting point on which the state and local governments could build.”

A woman with dark brown hair wearing a black T shirt sits on a brown sofa with a teal colored cushion, holding a photograph which shows a group of people. Behind her is a brightly colored painting.
Magally Lopez holds a photo featuring family members who have left the apartment complex where she and her mother live.
(David Wagner/LAist)

Some Parts Of L.A. Cap Rent Hikes Below Inflation

Despite high inflation, much lower rent increase caps — in some cases, rent freezes — remain in effect in many parts of Southern California.

The city of L.A., for example, continues to ban all rent increases during the COVID-19 pandemic in rent-controlled buildings. That includes most apartments constructed before 1978. Once that freeze lifts, allowable rent increases could rise as high as 8% under the city’s rules.

Elsewhere, rent control laws in the cities of Baldwin Park and Santa Ana cap increases at 3%, no matter how high inflation gets.

“We wanted those protections to be as strong as we possibly could make them,” said Santa Ana Mayor Vicente Sarmiento. “We realized that … one of the major causes” of homelessness in Santa Ana “is that [tenants] just can't afford rent.”

This strict approach has drawn protests from local landlords who say the cost of building maintenance such as plumbing work, electrical repairs and re-roofing has risen above the inflation rate.

Victor Cao with the California Apartment Association said the small landlords he works with in Southern California are “facing the same inflationary pressures as everybody else. The same cost at the supermarket. The same costs trying to get repairs done — in some ways more acute. So the question then becomes: whose pocket is this really coming out of?”

Local Lawmakers Push Back On Rising Rents

Seeing a wave of large rent hikes on the horizon, some local lawmakers are now taking steps to rein in allowable increases. Burbank City Councilmember Konstantine Anthony recently asked city staff to report back on the possibility of enacting a form of rent control in the city.

“You have a housing crisis that is demanding people pay higher and higher rents,” Anthony said. “That, in and of itself, is a policy failure.”

In 2020, Anthony advocated for Burbank ballot measure RC, which voters rejected after the city attorney said the rent control proposal ran afoul of the city’s charter. He thinks the chances of passing rent control now are better, with recent polling showing that 60% of Burbank residents view strengthening rent control as an urgent priority.

“This post-pandemic price gouging is making the argument for them,” Anthony said.

[Landlords] are always going to go as high as they can. So capping it at 10% just means they can legally get away with 10%.
— Burbank renter Matt Acuña

Burbank renter Matt Acuña recently came home to find a 10% rent increase notice taped to the door of the apartment he shares with friends. In August, their rent will go up nearly $100 per person per month. Acuña doesn’t understand why lawmakers allow such high increases.

“[Landlords] are always going to go as high as they can,” Acuña said. “So capping it at 10% just means they can legally get away with 10%.”

Santa Monica’s city council recently voted to forward a November ballot measure that would cap increases on rent controlled apartments at 3%, rather than 6%.

The move came over the objections of landlords who said the cost of property upkeep is rising more than 6%. Wes Wellman, a director of the Action Apartment Association, thinks a $140 monthly increase isn’t a big deal for most Santa Monica renters.

“We're talking about a cup of coffee a day — the cost of a cup of coffee,” Wellman said. “And this is a very affluent community.”

A large red and white sign reading 'vacancy' is strung outside a house with a green lawn and plants
A vacancy sign at a large apartment complex in Long Beach.
(Megan Garvey
/
LAist)

Why Do Rent Control Formulas Rely On Inflation, Anyway?

Housing experts say tying rent increases with inflation is generally perceived as an objective, fair standard that doesn’t unduly advantage landlords or tenants.

If costs rise for landlords, the thinking goes, they should also rise for renters. And hopefully wages will rise with inflation, making rent hikes manageable for tenants.

It’s an approach that has withstood legal challenges over the years. But Phillips, the UCLA housing policy researcher, said when inflation outpaces wages, “it's going to bite especially hard” for renters.

Phillips argues for some changes to rent control, such as more standardized rules across L.A. But he’s not sure there’s a better standard than inflation for calculating allowable increases.

“I think as we have things set up, it's a decent balance, however imperfect,” he said.

Renters See Dream Of Homeownership Slipping Away

But renters say they don’t see their landlords spending more money on building repairs or new amenities. They simply see more money leaving their bank accounts.

North Hollywood renter Kiana Johnson recently received a 10% rent increase notice. Her building is not covered by the city of L.A.’s rent control law because it was built after 1978.

Johnson and her roommates were eventually able to negotiate their landlord down to a 9% rent increase, but the increased cost has her questioning her future in L.A.

“If it's going to keep climbing 10% each year, there's no way anybody can afford that,” Johnson said.

Johnson moved to L.A. from Texas to build her career as a TV writer, a job that can come with spells of unemployment and big swings in income. She dreamed of one day owning a house — a place that would provide stability during career ups and downs. But with her rent rising so quickly, she said her ability to save is taking a huge hit.

“I genuinely don't think I'll be able to ever get a house,” Johnson said. “I'm kind of just resigned. But it's still sad.”

What questions do you have about housing in Southern California?