The RSO allowable rent increase in Los Angeles for 2026-27

What is the allowable increase for 2026-27?

LAHD set the allowable annual increase for RSO units at 3 percent for the year from July 1, 2026 to June 30, 2027. On a made-up rent of $1,800 that is $54, for a new rent of $1,854 from the unit's next increase date. LAHD posts the figure on its renter protections page and runs an RSO rent increase calculator, and the number changes every July, so read it again before each round of notices.

For price, 3 percent is this year's slope on every occupied unit. A buyer's projection uses it for year one and has to assume every year after, because the formula resets each July from price data nobody has yet.

How does the formula work now?

The City Council amended the formula effective February 2, 2026. The increase is now 90 percent of the average Consumer Price Index rather than 100 percent, and whatever that produces, it cannot fall below 1 percent or rise above 4 percent. The old formula ran between a 3 percent floor and an 8 percent ceiling.

The add-ons went too. From February 2, 2026 the annual increase may not include any added percentage for gas or electric service the landlord pays, and the extra 10 percent an owner could once charge for an additional occupant is no longer permitted.

For price, both ends moved. Under the old rules a buyer knew the allowable increase would be at least 3 percent in any year. Now it can be as little as 1 percent, and in a high-inflation year it stops at 4 percent where it could once reach 8. A projection built on the old range overstates what a sitting tenant's rent can do, in either kind of year.

What does an increase require?

An RSO increase starts with a current registration. LAHD's registration bulletin says a landlord may not demand or accept rent without a valid registration certificate, and an owner who fails to register properly receives no certificate and cannot legally collect rent. Certificates run from July 1 to June 30, a copy goes to the tenant, and the rent registry wants each unit's rent reported by the last day of February.

Rent may then go up once every 12 months, by no more than the allowable percentage unless LAHD or the Municipal Code permits more. Civil Code section 827 requires 30 days' written notice for increases of 10 percent or less, and every RSO increase is one of those.

Each unit keeps its own 12-month clock, set by the date of its last increase, and a sale leaves that clock where it was. A buyer who closes two months after a unit's increase waits ten months for the next one on that unit, so the first year of a projection follows each unit's dates rather than the calendar, which is why the increase dates belong on the rent roll you hand over.

A sale restarts the paperwork. The buyer registers the units within 45 days of the close of escrow or of recording. Fee pass-throughs stay apart from rent, and LAHD lets the SCEP and RSO fee surcharges be collected only after the units are registered and the tenant has written notice.

For price, registration is the first thing a buyer checks, because rent an owner could not lawfully demand is not income anyone should pay for. Expect a request for every unit's current certificate and the last rent registry filing, and bring any lapse current before you list.

How does a capped increase compound?

Take a made-up six-unit building collecting $10,800 a month, and suppose the same six units would lease today for $15,600, also made up. Assume every tenant stays and the allowable increase lands on the same figure every year. The table carries the rent roll forward at the new floor, at this year's 3 percent and at the ceiling, rounded to the dollar.

With the made-up market rent held still, the gap closes slowly. At the ceiling every year, the rent roll first reaches $15,600 in year 10. At 3 percent it takes until year 13, and at the floor until year 37. The gap at 3 percent starts at $4,800 a month, or $57,600 a year, and is still $3,080 a month after five years. If market rents rise instead of standing still, every one of those dates moves further out.

One unit far below market shows it more starkly. At a made-up $1,500 against a made-up $2,400, it first passes $2,400 in year 12 at the ceiling, in year 16 at 3 percent and in year 48 at the floor.

What does a buyer pay for?

A buyer pays for the capped line and treats the gap as something only a vacancy can deliver. Under the RSO a unit reprices when it comes open in a way the law allows, such as a voluntary move-out, and the vacancy rules under Costa-Hawkins decide which move-outs count. Until then the unit grows at the allowable increase.

Some rent sits outside the annual increase. LAHD's cost recovery programs add temporary surcharges for approved work, and each one runs out, so a buyer reads them apart from the rent. Capital improvement pass-throughs carry their own caps and terms.

A building outside the RSO grows on a different slope. Under the statewide rent cap the Los Angeles area maximum from August 1, 2026 is 8.7 percent, so identical rents support different prices on either side of the October 1, 1978 line.

If your ledger shows an increase taken while a unit's registration had lapsed, have a landlord-tenant attorney read the file before you quote that rent to a buyer. That is a legal question and Shaya holds no law license, but he can show you what the building is worth on the rent that holds up.