The Consumer Price Index is measured by the average change in prices over time in a fixed market basket of goods and services. In June 2022, prices in the Los Angeles-Long Beach-Anaheim, CA metro, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), increased 1.1%, according to the U.S. Bureau of Labor Statistics. This increase was fueled by higher prices for housing and used and new motor vehicles. Over the last 12 months, the CPI-U has increased 8.6%. Food prices have increased 9.3%, energy prices have increased 38.4% (largely due to price increases in gasoline). The index for all items less food and energy increased 6.0% over the past year in the Los Angeles-Long Beach-Anaheim, CA metro.
Based on the California Tenant Protection Act, the maximum allowable rent increase is calculated by taking 5% plus the CPI for the Los Angeles-Long Beach-Anaheim, CA market, based on the Bureau of Labor Statistics is 8.6%, for a total of 13.6%.
Note, this law does not apply to:
- Vacant units before new tenancy. In this case, the landlord can increase rent without a limit
- Rental units built within the past 15 years (i.e., certificate of occupancy issued)
- Single-family homes and condos, unless the landlord is a REIT, corporation, or LLC
- Duplexes where the landlord resides in the other unit
- Units already under a local rent control law
Example
Assuming you have a tenant that is occupying a building in the Greater Los Angeles area, which is due for a rent increase and their current rental amount is $2,162. Landlords would be able to increase this tenant by 13.6%, which would equate to an additional $294.03 per month, bringing the new monthly rent to $2,456.03.
