Rent Ceiling Increases & Decreases

Rent ceiling increases

Rent ceilings may be increased by annual general adjustments or by amounts granted in an Individual Rent Adjustment (IRA) petition. California law requires a landlord to give a 30-day notice of rent increase if the increase is 10% or less of the current rent, and a 90-day notice for an increase of more than 10%.

Annual General Adjustment (AGA)

Each January 1, rent ceilings are increased by the AGA, which allows landlords to increase the rent for most fully covered units up to the new rent ceiling. See our AGA page for the current AGA and to learn when a landlord can take the AGA. There is also an AGA calculator to help determine the allowable rent increase for eligible units. After the expiration of a fixed-term lease, the landlord may raise the rent to the rent ceiling at any time.

Landlord IRA petitions

Landlords may petition the Rent Board for rent ceiling increases for the following reasons:

• Increase in number of tenants from that allowed in the unit or actually residing in the unit with the landlord’s knowledge between June 1, 1979 and May 31, 1980, or, for tenancies beginning on or after January 1, 1999, from that allowed at the beginning of that tenancy
• Increase in living space or housing services from those existing on May 31, 1980, or, for tenancies beginning on or after January 1, 1999, from those existing at the beginning of the tenancy
• Historically low rent
• Capital improvements (although vacancy increases often offset rent increases that a landlord would be eligible for)
• Adjustment or maintenance of net operating income (fair return)
• Restoration of AGAs
• No units on a property have had a vacancy increase since December 31, 1998

Special note on rent ceiling increases for government owned/subsidized units 

If a government owned/subsidized unit’s rent ceiling is adjusted upward, either by the Annual General Adjustment or through the petition process, an owner must still go through the subsidizing agency’s rent increase approval process (if there is one) to receive more rent.

Rent ceiling decreases

Tenant IRA petitions

Tenants may petition the Rent Board to reduce the rent ceiling, most often to compensate for things like housing code violations, habitability problems, or a decrease in living space or housing services. Other grounds for filing a tenant IRA petition are:

• Illegally high rent, unrefunded security deposit, and unpaid security deposit interest
• Substantial deterioration of the unit, failure of the landlord to provide adequate services, or failure of the landlord to provide services agreed to by the parties in their initial agreement, written or oral
• Reduction in the number of tenants allowed in the unit from the number allowed on May 31, 1980, or, for tenancies beginning after January 1, 1999, from the number allowed at the beginning of the tenancy