West Hollywood to End Rent Increase Freeze In 2023 and Permanently Cap Annual Rent Increase to 3%

Posted By: Danielle Leidner-Peretz (deleted) Local News Alerts,

At the West Hollywood August 15th City Council meeting, the Council directed staff to return in sixty (60) days with an ordinance to end the over two-year long moratorium on rent increases applicable to all rent stabilized units during the first quarter of 2023 and to permanently reduce the maximum allowable annual general adjustment to 3%. 

The City has had a rent increase freeze in effect since April 2020 that prohibits any rent increases for rent stabilized units regardless of whether or not the renter has been financially impacted by COVID-19. Pending the City’s adoption of an ordinance ending the rent increase freeze, the ban is currently to remain in effect for sixty (60) days following the end of the City’s local emergency.

On a related matter, each year prior to July 1st, the City’s Rent Stabilization Commission announces the annual general adjustment which is based on the formula in the Rent Stabilization Ordinance (RSO) of seventy-five percent (75%) of the Consumer Price Index (CPI) based on the CPI May to May percentage increase. The 2022 General Adjustment for the period of September 1, 2022 to August 31, 2023 is 6%.

As a result of the City Council deliberations, staff will return with a draft ordinance that ends the rent increase freeze in the first quarter of 2023, reduces the 2022 General Adjustment by half, from 6% to 3%, and amends the City’s RSO formula to permanently limit the annual general adjustment to a maximum of 3%. The Council also requested that staff analyze the potential consequences of such action and whether it would result in the City’s small business rental housing providers selling their properties.

Prior to the meeting and during the meeting’s public comment period, the Association urged the City Council to establish the earliest possible date certain for the immediate expiration of the rent increase freeze, allowance for the full 2022 general adjustment of 6% to be instituted and creation of a process for housing providers to recoup forgone rent increases resulting from the City’s over 2 yearlong ban. Further, we indicated that many small business rental housing providers are already in a financially dire situation caused by the last several years of government mandates that have only been compounded by current inflationary pressures and are on the verge of selling or losing their property.

We will continue to advocate for our members interests and provide updates once the proposed ordinance is made available.