Multi-family property built before 1978 in the City of Los Angeles falls under Los Angeles rent stabilization ordinance (RSO) otherwise known as rent control. Rent control limits the amount you can raise rents and the reasons you can remove a tenant (LINK 12 legal reason for eviction).
Historically, the annual rent increase average is 3% this year it is 4%, which is nice for landlords. The minimum rent increase is 3% the maximum rent increase is 8%.
LAHD wrote a great guide file:///C:/Users/James%20Campbell/Downloads/allowable_rent_increases_english.pdf
If your building has a gross rent Multiplier of 12, and you are giving your tenant a $100 break on rent:
12 GRM x ($100 below market rent/mo. x 12 months) = $14,400
You lose $14,400. Staggering that doing a small a favor as saving them $100 a month on their rent isn’t costing you the $1,200 of lost rent upfront- but could be costing you $14,400 when you decide to sell. In this situation, I always recommend that you continue serving your below market tenants rent increase notices each year, but let them know you have no intention on enforcing it- that way you can keep as high a monthly gross as possible on your rents and keep up with RSO. Remember, if you don’t exercise the right to do a rent increase in a given year- you lose it.
as a result landlords who do not keep up with annual increases will end up with below market tenants in their building that dramatically lower their property’s sale value.If you have trouble raising rents as a landlord, hire a property management company to do it for you.
Example Rent Increase Form: