CPI Adjustment for 2024/25

Orange County CPI set at 3.9%; Riverside & San Bernardino Counties CPI set at 4.3%

The Bureau of Labor Statistics 12-month (April 1, 2023 - April 1, 2024) Consumer Price Index adjustment for the Los Angeles - Long Beach - Anaheim (Orange County) Region has been set at 3.9%. For Riverside and San Bernardino Counties, the CPI adjustment has been set at 4.3% (March 1, 2023 - March 1, 2024).

The 12-month adjustment provides the basis upon which maximum rent increases in the region are calculated for rental properties that are subject to California's statewide rent cap under AB 1482. Annual rent increases are limited to CPI + 5%, but never to exceed 10%.

Based on the CPI adjustment, annual rent increases from August 1, 2024 - July 31, 2025 will be capped at:

Los Angeles - Long Beach - Anaheim (Orange County) - 8.9%
Riverside & San Bernardino Counties - 9.3%

Please see the following link for details on the Bureau of Labor Statistics regional CPI adjustments for Los Angeles-Long Beach-Anaheim (Orange County).

Please see the following link for details on the Bureau of Labor Statistics regional CPI adjustments for Riverside-San Bernardino Counties.

What Type of Notice Must I Give My Residents?
The answer depends on the amount you intend to increase the rent:

UNDER 10% - Even if your rental property is not subject to AB 1482, if you will be increasing rents UNDER 10%, you must provide AT LEAST 30-DAYS WRITTEN NOTICE.
10% OR MORE - Regardless of rent control restrictions, if you will be increasing rents 10% OR MORE you must provide AT LEAST 90-DAYS WRITTEN NOTICE.

Guidance to Rental Housing Providers
We emphasize the "AT LEAST" portion in these requirements as a reminder that consumers are seeing costs go up all around. Rental-housing providers should be cognizant that significant rent increases can and will have consequences. They should communicate with their residents in connection with the notice to increase rent as much as possible.

AB 1482 limits how much a property owner or manager can increase their rent in a 12-month period.  

Rent increases in any 12-month period are limited to 5% (percent) plus the change in inflation from April 1 of the prior year to April of the current year, as measured by the Consumer Price Index (CPI-U) for the area which the property is located. 

For rent increases that take effect before August 1  of any calendar year, the following shall apply: 

The percentage change shall be the percentage change in the amount published for April of the immediately preceding calendar year and April of the year before that.

For rent increases that take effect on or after August 1  of any calendar year, the following shall apply: 

The percentage change shall be the percentage change in the amount published for April of that calendar year and April of the immediately preceding calendar year.

AB 1482: The Basics

A rental housing provider may increase rent up to two times in a 12-month period, but are still limited to the annual cap.
Vacancy Decontrol remains intact. You will be able to reset your rents to market rate upon all original tenants vacating. 
Just Cause termination provisions take effect at 12 months of tenancy if all tenants have occupied the unit for 12 months or more.  If there have been changes in occupancy, then Just Cause takes effect at 24 months. 
Just Cause applies to month-to-month tenancies and fixed-term lease renewals.
At-Fault terminations include, but are not limited to, non-payment of rent, lease violations, criminal activity. 
No-Fault terminations are defined as owner move-in, withdrawal from rental market, a habitability order from a government agency, and intent to demolish or substantially remodel.
- "Substantially remodel" is defined as: the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.
No-Fault terminations will trigger a relocation payment of one-month's rent, regardless of the tenant's income, to be paid within 15 days of the notice being served. The last month's rent may also be waived.
Specific language and disclosures are required for exempt properties and when terminating tenancy. Be sure to use the correct AAOC forms to ensure compliance.

AB 1482: Exemptions

Single-Family Homes and Condos are exempt...
- UNLESS they are owned by a Real Estate Investment Trust (REIT), corporation, or an LLC where one of the owners is a corporation. 
Properties containing two separate dwelling units within a single structure in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit. 
Deed Restricted Housing
Housing built within the last 15 years (determined by Certificate of Occupancy date)
Housing subject to a local Rent Control ordinance (e.g. Santa Ana)
Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.
Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property.
Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit are excluded from the Just Cause privisons of AB 1482.

For additional information, contact Chip Ahlswede at chip@aaoc.com. or (714) 245-9500