How much can you raise rent in California in 2025?

karina Updated on January 18, 2025 9400 views 4

California is inching its way up to becoming one of the most expensive places to live in the US. Undoubtedly, the fear of excessive rent hikes is ever-present for renters, making it crucial to understand the state’s rent control laws.

While not all cities in California have rent control measures in place, recent statewide legislation offers renters some protection. The Tenant Protection Act of 2019 (AB 1482) limits annual rent increases for eligible properties, and local ordinances may provide additional safeguards.

This article delves into the provisions, coverage, and exemptions of AB1482, ultimately answering how much you can raise rent in California. Landlords must understand and uphold AB1482 to avoid legal violations regarding rent control.

How much can you raise rent in California?

Before the Tenant Protection Act (AB 1482) was enacted in 2019, there were no statewide limits on rent increases in California. Rent control policies were determined entirely at the local level by cities and counties that chose to implement their own rent control ordinances. 

Only around 20 cities and counties in California had some form of rent control policy before the statewide law went into effect. In other areas, landlords could raise rent by any desired amount when renewing a lease or issuing a rent increase notice as specified in the rental agreement. 

The Tenant Protection Act (AB 1482) now caps annual rent increases for specific properties at 5% plus the regional inflation rate (CPI), or 10%, whichever is lower. The California Consumer Price Index (CA CPI) is published by the state’s Department of Finance.

Per year rent increase in California

Residential properties in California subject to the Tenant Protection Act of 2019 may increase rent annually by the lower of two computations:

1. 5% + regional inflation rate percentage
2. 10% of the lowest gross rental rate charged for the immediately preceding 12 months

For instance, if a unit is currently renting at $1,500 and the regional CPI is at 2.3%, the maximum monthly rent upon lease renewal is 7.3% or $1609.50.

However, if the regional CPI is at 5.8%, the maximum rent increase upon lease renewal is 10% or $1650.00.

Month-to-month rent increase in California

Month-to-month rent increases on residential properties in California subject to AB 1482 are covered by the same provisions as annual leases, whichever is lower: 

1.  5% + average percentage increase in CPI
2.  10% of the lowest gross rate in the past 12 months

A written notice specifying the amount, reason, and effective date of the increase must be sent to tenants within this timeframe:

• 30 days for increases of 10% or less
• 60 days for increases above 10% (on properties not covered by AB 1482 and other local ordinances)

What properties are covered by the California Tenant Protection Act (AB 1482)?

The Tenant Protection Act applies to all residential rental units in California, except for certain types of properties specifically exempted by the law. These include:

• Single-family homes not owned or controlled by a corporation or REIT (but the Act does apply to single-family homes owned or controlled by such entities)
• Units covered by a local rent control ordinance that is more protective than the Tenant Protection Act
• Units that received their certificate of occupancy within the past 15 years (this is a rolling exemption, so units become covered once they reach 15 years old)
• Mobile homes, unless owned and rented out by the mobile home park owner/manager
• Duplexes where the owner lives in one unit, but only while the owner remains a resident
• Housing restricted as affordable by deed, government agreement, or other recorded document, or subject to an affordable housing subsidy agreement
• Dormitories

Enacted primarily to address the housing crisis, the Act took effect on January 1, 2020, and contains a sunset provision to expire on January 1, 2030.

 What is the rent cap in California?

In California, the Tenant Protection Act (AB 1482)  establishes a statewide rent cap that restricts annual rent hikes to the lower of these two amounts:

• 5% of the current rent plus the local inflation rate
• 10% of the current rent

California Rent Increase Laws for 2025

Tenant Protection Act (AB 1482) of 2019

The Tenant Protection Act of 2019 is the most significant and far-reaching rent control legislation in California. This statewide law serves as the primary determinant of rent control policies across the state, imposing limits on annual rent increases for most residential properties.

While some cities and counties have their own local rent control ordinances, the Tenant Protection Act establishes a baseline standard that applies even in areas without specific local measures.

In addition to the Tenant Protection Act (AB 1482), residential landlords and tenants should be fully aware of other existing laws and provisions governing rent increases in the state of California as of 2025. 

Costa-Hawkins Rental Housing Act

The Costa-Hawkins Rental Housing Act passed in 1995, placed significant limitations on local rent control laws in California. It prohibited cities from applying rent control to single-family homes, condominiums, and any housing units first occupied after February 1, 1995. 

Costa-Hawkins still limits the scope of AB 1482 in a few key ways:

1. Rent control exemption for newer units: AB 1482 cannot regulate rents for units first occupied within the last 15 years, as per Costa-Hawkins.
2. Vacancy decontrol: Landlords can still raise rents to market rates when a unit becomes vacant, as allowed by Costa-Hawkins.
3. Preemption of stricter local laws: In areas with local rent control, the less restrictive of the two laws (AB 1482 or the local law) applies.

While AB 1482 provides statewide rent caps and protections, it operates within the boundaries set by Costa-Hawkins, which continues to constrain the application of rent control in certain cases and prevents the state from implementing stronger rent control measures.

 Consumer Price Index (CPI) Reference for Rent Increase

The Tenant Protection Act (AB 1482) must use the Consumer Price Index (CPI) from April of each year to determine the allowable rent increase limit. However, the applicable CPI percentage depends on when the rent increase takes effect:

1. For rent increases effective before August 1st: Use the April CPI percentage from the previous year rounded to the nearest one-tenth of a percent.
2. For rent increases effective on or after August 1st: Use the April CPI percentage from the current year, rounded to the nearest one-tenth of a percent.

Landlords need to apply the correct April CPI value based on whether the rent hike happens before, on, or after August 1st of any given year.

How often can a landlord raise rent in California?

Landlords can only raise rent twice each year in California. The Tenant Protection Act of 2019 (AB 1482) explicitly states:

“The bill would prohibit an owner of a unit of residential real property from increasing the gross rental rate for the unit in more than 2 increments over a 12-month period, after the tenant remains in occupancy of the unit over a 12-month period.”

Moreover, the sum of two increases must not exceed the allowable margin of either 5% of the current rent plus the local inflation rate or 10% of the current rent.

Single family home rent increase California

Single-family homes in California are exempt from rent control laws like the Costa-Hawkins Rental Housing Act and the Tenant Protection Act of 2019 (AB 1482). There are no statewide limits on how much landlords can increase rent each year for single-family homes.

Without being covered by rent control, landlords of single-family homes can raise the rent by any amount when leases expire or renew. The rent increases are not legally capped or regulated at the state level, except for those owned or controlled by a corporation or REITs, which are subject to the provisions of AB 1482.

Some cities in California may have their own local ordinances that apply rent increase caps even to single-family homes. However, state rent control laws allow unlimited annual rent hikes for single-family residences not subject to local rent control rules.

Does California have rent control?

Yes, rent control in California is governed by state and local laws that set limits on how much landlords can raise rents. It essentially caps rental rates and annual rent increases within defined thresholds.

Can a landlord raise rent by more than 10% in  California?

No, the California Tenant Protection Act of 2019 explicitly states that landlords can raise rent annually by 5% plus the local inflation rate (CPI), or 10%, whichever is lower. The maximum allowable increase is thus 10%, nothing more.

Let’s look back to when inflation was at its highest in 2022 up to early 2023. During this period, high inflation rates drove up regional Consumer Price Index (CPI) figures, so the entire state of California hit the 10% rent increase cap under AB 1482.

Rather than being limited to 5% plus the local CPI rate, landlords were allowed to raise rents up to 10% annually since 10% was the lower of the two allowable rent increase calculations dictated by the law.

What are the new rental laws in California 2025?

Assembly Bill No. 12

California has taken a significant step to make housing more accessible by limiting security deposits for renters. Assembly Bill No. 12, signed into law by California Governor Gavin Newsom, aims to enhance housing affordability and accessibility for renters. 

Effective July 1, 2024, the bill caps security deposits at an amount equivalent to one month’s rent, addressing the widespread practice of landlords demanding excessive deposits, sometimes up to three months’ worth. 

This legislation makes California the twelfth state to implement such a limit on security deposits. However, it exempts small landlords with no more than two properties and four units in total from the cap. 

By regulating security deposit amounts, the bill seeks to ease the financial burden on renters and promote greater housing opportunities across the state.

Assembly Bill 1482 – Just Cause Eviction Categories

Under California’s AB 1482 rent control law, landlords must demonstrate ‘just cause’ to evict tenants after they have lived in a unit for at least 12 months, or if one tenant has resided there for 24+ months. This prevents evictions solely to raise rent on new tenants beyond the cap. 

The law outlines two ‘just cause’ categories: 

• ‘at-fault’ for violations like nonpayment of rent or criminal activity, requiring a chance to cure
•  ‘no-fault’ reasons like owner move-in or renovations, requiring one month’s relocation assistance

These provisions protect long-term tenants from arbitrary evictions while allowing landlords to reclaim properties under legitimate circumstances specified in the legislation.

Assembly Bill No. 1764 – Item 2

Current California law mandates that when an applicant pays a fee to rent a residential property, the landlord or their agent must provide an itemized receipt detailing the out-of-pocket costs and time spent processing the applicant’s information.

Assembly Bill 1764 (2) proposes an amendment that would allow the landlord or their agent to send this required receipt for the applicant’s paid fee to an email address provided by the applicant, rather than necessarily providing a physical printed copy if both parties agree to this electronic delivery method.

How to manage your rental property and rent collection

Collecting rent from tenants can present various challenges for landlords. One of the most common issues is late or missed payments, which can disrupt the landlord’s cash flow and create financial strain. 

Collecting rental payments manually is also an arduous and time-consuming process fraught with potential issues. Landlords must keep meticulous records of payments received and alert tenants of missed or late rent. 

Processing cash or checks is also inconvenient, as trips to the bank to deposit funds waste valuable time. Manual payment tracking often results in errors in bookkeeping. 

Overall, the lack of automation bogs down operations, hindering cash flow and consuming unnecessary administrative resources better allocated elsewhere.

Automating rent collection through RentPost property management software

Property management software like RentPost is crucial for landlords and property managers to automate the time-consuming task of rent collection. 

Here’s how RentPost streamlines rent collection in a breeze.

1. RentPost sends out automatic reminders to tenants when rent is due.
   
2. Tenants can pay securely via ACH bank transfers or credit cards with a few clicks. Tenants may use any US-based bank account or Credit Card (Visa, Mastercard, or American Express).

3. Tenants can also opt for the AutoPay rent payment method. RentPost gives tenants AutoPay convenience so they never have to worry about missing rent payments.
   
4. On the backend, RentPost integrates with Payshift to track rent payments, assess late fees when applicable, and maintain detailed records. Landlords get real-time updates on outstanding balances across all their properties. 

Overall, RentPost reduces errors, missed payments, and the hassle of manually collecting and depositing checks from each tenant. It’s our way of simplifying rent collection for both landlord and tenant.

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