2024 was an active year with regard to the LA Apartment regulatory environment, filled with both wins and losses for apartment owners.
The one thing that remains certain is that the regulatory landscape surrounding rental housing in California continues to evolve, with challenges and opportunities arising from recent legislation.
Below is a brief recap of a few major outcomes which transpired in 2024:
- Proposition 33 Was Defeated (Win) -The 2024 election saw the defeat ofProposition 33 which would have expanded rent control in California, and likely would have led to the possibility of Vacancy Control (ie your ability to raise rents in-between tenancies).
- Proposition 34 Passed (Win) – The passage of Prop 34 mandates that The AIDS Healthcare Foundation (the organization behind Prop 33) will be forced to allocate 98% of its revenue directly towards patient care, impairing its financial ability to support rent control initiatives such as Prop 33 in the future.
- LA County Approved Lower Annual Rent Hikes (Loss) -The LA County Board of Supervisors approved lower annual rent increases for many tenants in unincorporated areas. Rent increases will be limited for units already under rent control to 60% of the annual change in the consumer price index with a ceiling of 3%.
- SB 1211 Passed Allowing for Greater ADU Density (Win) – SB 1211 passed in 2024 creating more flexibility to add ADUs at multifamily properties by raising the cap on detached ADUs from 2 units to 8 units, so long as the ADUs do not outnumber the units in the main building.
- Max Section 8 Rents Lowered in Los Angeles (Loss) – Local housing authorities such as HACLA reduced the amount of Fair Market Rents being offered to housing providers participating in the Section 8 voucher program by as much as 10% to 12%.
- New Compliance for Non-RSO Properties (Loss) – The LA City Council passed a sweeping compliance program affecting non-RSO property owners in the city of LA. Owners of properties not covered by the Rent Stabilization Ordinance (RSO) – including multifamily buildings constructed after 1978, single-family homes, condominiums, accessory dwelling units (ADUs), and Junior ADUs – must now register their rental units and display certification, aligning with standards previously set for RSO properties.
As always, we will continue to monitor the regulatory landscape and ensure that you have the most accurate and up-to-date information on how these changes may affect your multifamily investments. Please do not hesitate to reach out if you have any questions or need further clarification on any of these developments.
