The Rent Stabilization Ordinance (RSO) was enacted in the City of Los Angeles during the peak of the housing shortage crisis of 1978, following the passage of Proposition 13. Prop 13 limited property taxes to 1% of its assessed value which, in turn, encouraged a “lock-in” effect on property. In general, as the market value of land drastically increases, Prop 13 results in a disproportionately high property tax increase for newer property owners. For landlords, additional costs from property taxes were often offset by rental income in which tenants were obligated to pay. The goal of Prop 13 was to counteract these increases, and tenants were told that the benefits would “trickle down” in the form of reduced rent. This did not become reality, as landlords continued to raise their rents after the Proposition passed.

As a result of Prop 13, tenants began organizing and demanding protections from the city. Rising rent was viewed as a problem that only affected the middle-class, and there was not widespread support and solidarity amongst all class stratifications. Despite this, these efforts resulted in a freeze on rents and the RSO was drafted and enacted. The RSO was created to address the housing crisis by protecting tenants from excessive rent increases and evictions without due notice. 

RSO-Eligible Units: Units in properties that were built on or before October 1978 or units constructed after July 2017 that replace RSO-eligible units are subject to the RSO. In the City of Los Angeles, this amounts to approximately 624,000 units in 118,000 properties.

What is covered: The RSO covers allowable rent increases, legal reasons for evictions and any required payments of relocation assistance, registration of rental units, buyout agreements, and interest payments or security deposits.

When rents can increase: if the tenant moves out, does not pay rent, violates the lease, accepts a buyout agreement, or is evicted; or if a new tenant joins the lease. In addition, rent can be increased once every 12 months up to the allowable increase percentage. These increases can be made without the Los Angeles Housing Department’s (LAHD) approval. Please click here for a list of allowable rent increases.

Required registration: All properties with RSO units must have a notice posted that the property is subject to the RSO. All units must also be registered annually with LAHD.

The landscape of Rent Control policies: Rent control policies have continued to spread to other cities, but there has also been an increase in litigation. Landlords find loopholes, evict tenants, and cities react by attempting to close those loopholes. However, policies that are beneficial to property owners have also been passed, including the Ellis Act and Costa-Hawkins Rental Housing Act (which addressed vacancy control and prohibited rent control on properties built after February 1995). Despite heavy landlord involvement in lobbying for decreased tenant protections, the State of California is still committed to addressing rising rents and predatory actions. The Tenant Protection Act created a rent increase cap statewide and tenant protections are up on the ballot in 2024.

Written by Caroline Ghanbary