Los Angeles landlords face significantly tightened RSO rules in 2026. The LA City Council passed a reformed Rent Stabilization Ordinance that reduces the maximum allowable annual rent increase and permanently eliminates two previously permitted add-ons. If you own RSO-covered units in Los Angeles, here's exactly what changed and what you need to do before July 1, 2026.
Quick Summary of Changes
- New formula (July 1, 2026): 90% of CPI, capped between 1% and 4%
- Old maximum: 8% → New maximum: 4%
- Old minimum: 3% → New minimum: 1%
- Utility adder eliminated (as of February 2, 2026)
- Dependent occupant surcharge eliminated (as of February 2, 2026)
- Interim cap through June 30, 2026: 3% maximum
The New Rent Increase Formula in Detail
Starting July 1, 2026, the annual allowable rent increase for RSO-covered units is:
- Calculated as 90% of the CPI for All Items (previously 100%)
- Subject to a hard ceiling of 4% (previously 8%)
- Subject to a hard floor of 1% (previously 3%)
In practical terms: if CPI runs at 3.5%, the allowable increase is 90% × 3.5% = 3.15%. If CPI drops below 1.1%, the floor of 1% applies. If CPI spikes above 4.4%, the ceiling of 4% applies.
The Interim Period: Now Through June 30, 2026
For rent increases served between June 1, 2025 and June 30, 2026 that have not yet taken effect, the allowable increase is capped at 3%. If you issued a notice above 3% during this window, it needs to be corrected.
Two Add-Ons Permanently Eliminated
Effective February 2, 2026, two RSO add-ons that previously allowed landlords to exceed the base formula are permanently gone:
- 1% utility reimbursement adder: Landlords in master-metered buildings who paid tenants' utilities could previously tack on an extra 1%. This is eliminated.
- 10% dependent occupant surcharge: When an additional dependent moved in, landlords could raise rent 10%. This is eliminated.
Any rent increases that included these add-ons after February 2, 2026 are not valid under the new ordinance.
What Remains Unchanged
- RSO still applies to units built on or before October 1, 1978 (with 2+ units)
- Just cause eviction protections remain in effect
- Relocation fees continue, indexed to 100% of CPI
- Landlords may still apply for Individual Rent Adjustment (IRA) if operating costs justify a higher increase
- Rent increases remain limited to once per 12-month period per tenant
Action Items for LA Landlords Before July 1
- Audit any pending rent increase notices — ensure they don't include eliminated add-ons
- Confirm your building's RSO status at housing.lacity.gov
- Calculate your July 2026 allowable increase using the new 90% CPI formula (LAHD publishes the official percentage)
- Serve any new notices with the correct allowable percentage and 30 days advance notice
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