Updated August 16, 2026
LA multifamily is one of the most regulated asset classes in American real estate. Twelve overlapping laws — city, county, state, federal — touch the cash flow, the exit value, and the operating cost of every apartment building in the region. Miss one and the math on your building is wrong. This tracker is the current state of all of them. Updated quarterly, plus any time a material change happens between updates. What you are reading is accurate as of the Last updated date in the frontmatter, verified against source documents on that date. Anything older than one quarter should be cross-checked against the source URL at the bottom of each section.
Ranked by how much they move valuation for a typical LA multifamily building in 2026. If you only have time for three, read the top three.
Each law below has a full plain-English explainer. Jump straight to the one that
governs your building:
| Law | Applies to | Explainer |
|---|---|---|
| LA City RSO | Pre-1978 LA City, 2+ units | the 2026 rewrite · the rent cap |
| Costa-Hawkins | Statewide exemption line | explained |
| AB 1482 | Buildings local rent control misses | explained |
| LA County RSTPO | Unincorporated county only | explained |
| Proposition 13 | Every California property | explained |
| Ellis Act | Exiting the rental market | explained |
| SB 567 | Owner move-in / substantial remodel | explained |
| LA Just Cause Eviction Ordinance | Non-RSO LA City rentals | explained |
| AB 12 | Security deposits | explained |
| AB 2347 | Eviction timelines | explained |
| SB 9 | Single-family parcels | explained |
| SB 79 | Parcels near qualifying transit | explained |
| Santa Monica | Its own regime | explained |
| West Hollywood | Its own regime | explained |
| Beverly Hills | Its own regime | explained |
| Proposition 19 | Inheriting or gifting property | explained |
| SB 721 | Balcony inspections | explained |
Status: In effect. The new formula started calculating July 1, 2026 as scheduled, and LAHD has published the actual rate for the RSO year running July 1, 2026 through June 30, 2027: 3% — the same as the prior year. Utility reimbursement and dependent occupant changes took effect January 24, 2026. Full explainer: what the 2026 RSO rewrite means and the rent cap itself.
Applies to: Buildings within the City of Los Angeles, certificate of occupancy before October 1, 1978, two or more units.
The numbers that matter:
| Component | Before | After (July 2026) |
|---|---|---|
| Base formula | 100% of CPI | 90% of CPI |
| Floor | 3% | 1% |
| Ceiling | 8% | 4% |
| Utility reimbursement bump | +1% allowed | Eliminated |
| Dependent occupant bump | +10% allowed | Eliminated |
Sale price impact: Very high. Pre-1978 LA City DCF valuations reprice meaningfully lower versus pre-rewrite underwriting. Institutional buyers are already widening their pricing on RSO-constrained inventory.
Tenant relocation fees (2025–2026): Mandatory for no-fault evictions. Eligible tenants: $10,650 (under 3 years) to $13,950 (3+ years). Qualified tenants (seniors 62+, disabled, families with minors): $22,450–$26,550. Mom-and-pop landlords (4 units or fewer): $10,200–$20,600.
Michael's angle: The single biggest valuation story for LA multifamily in 2026. Pre-1978 LA City owners considering a sale in the next 18–36 months face a closing pricing window. Buyers who signed term sheets in Q1 2026 locked in pre-rewrite numbers. Buyers signing in Q3 2026 and beyond are pricing to the new formula. The delta is real money.
Source: housing.lacity.gov/residents/rso-overview · lucrumre.com/la-rso-rent-increase-changes-2026/
Status: In effect. Three statewide repeal attempts have failed: Prop 10 (2018), Prop 21 (2020), and Prop 33 (November 2024, which failed 62% to 38%).
Applies to: Buildings with a certificate of occupancy on or after February 1, 1995, single-family residences (any age), and condominiums (any age). These properties are exempt from local rent control ordinances like LA City RSO and LA County RSTPO.
Sale price impact: Very high — in the opposite direction from RSO. Post-1995 Costa-Hawkins-exempt buildings trade at a meaningful premium to comparable pre-1978 RSO inventory in the same submarket. The gap has been widening for three consecutive years and accelerated after the December 2025 RSO rewrite.
Michael's angle: Costa-Hawkins is the deal maker for LA multifamily as an asset class. It is also the biggest single-law risk. One successful repeal would vaporize billions in LA multifamily valuation. Three attempts have failed, but the threat remains structurally asymmetric — for landlords, there is no upside case, only a continued-survival case. Post-1995 buildings command a premium that exists purely because this one statute still exists.
Source: caanet.org/topics/costa-hawkins-act/ · calmatters.org/politics/2024/11/california-election-results-prop-33-rent-control/
Status: In effect. Current allowable increase (August 1, 2026 through July 31, 2027): 8.7% — 5% + 3.7% regional CPI for Los Angeles–Long Beach–Anaheim. The CPI component is measured each April and the cap resets every August 1, so this figure has a twelve-month shelf life by design. Full explainer: AB 1482 explained.
Applies to: Statewide residential tenancies not covered by a stricter local ordinance. For LA City buildings, AB 1482 is the backstop for buildings outside RSO scope (post-1978 through pre-1995 construction, small landlord-occupied properties).
Key rules:
- Cap formula: lesser of (5% + CPI) or 10%
- No more than two increases per 12-month period
- Combined increases cannot exceed annual cap
- Cap recalculated each August 1
Exemptions:
- New construction post-February 1995 (Costa-Hawkins)
- Single-family homes and condos (Costa-Hawkins)
- Buildings with 25 units or fewer built before February 1, 1995 (landlord-elected in some circumstances)
Sale price impact: Moderate. AB 1482 is less restrictive than RSO (8.7% current vs. 3–4% RSO) but still caps rent growth. Buildings that fall under AB 1482 but not RSO sit in the middle of the valuation spectrum.
Michael's angle: Often misunderstood. Owners of buildings built 1979–1994 sometimes assume their building is "rent controlled" when it is actually AB 1482-governed, which is meaningfully less restrictive. The distinction changes underwriting and sometimes changes the sale thesis entirely.
Source: caanet.org/topics/ab-1482/
Status: Amended effective January 1, 2025. Allowable rent increase now capped at 60% of CPI with a 0–3% ceiling (small landlord +1%, luxury +2%).
Applies to: Residential rental properties in unincorporated LA County (not City of LA, not Santa Monica, not West Hollywood).
Sale price impact: Moderate to high. LA County unincorporated buildings are now structurally more restricted than LA City buildings. This is a reversal of historical logic — County once looser than City, now tighter. Buildings in unincorporated County trade at a valuation discount relative to otherwise-identical City buildings.
Michael's angle: Few owners of unincorporated County buildings have repriced their valuation expectations to reflect this. The discount is real. For sellers in County, the conversation has to start with honest math.
Source: dcba.lacounty.gov/rentstabilizationprogram/
Status: In effect. Unchanged through 2026.
What it does:
- 1% property tax rate cap on assessed value
- Maximum 2% annual assessed-value increase
- Reassessment only triggered by (a) change in ownership or (b) new construction
- Refinance does NOT trigger reassessment
- Partial ownership transfers trigger partial reassessment
Sale price impact: High, and mostly invisible. On sale, the buyer's property tax basis resets to the purchase price. A seller who bought for $1M in 1990 and sells for $6M today has been paying tax on a ~$1.8M assessed value (2% annual growth). The buyer's tax basis jumps to $6M. That increase flows through the buyer's NOI and shows up as a lower offer.
Michael's angle: Partial-transfer mechanics (selling 50% JV interest only reassesses that 50%) are rarely explained to sellers. They represent a real tax optimization for specific situations. Most brokers do not raise this. Also: a building held until death receives a stepped-up basis, which permanently eliminates deferred capital gains. For owners over 65 with estate plans, the hold-versus-sell calculus shifts dramatically in favor of holding.
Source: boe.ca.gov/proptaxes/faqs/changeinownership.htm
Status: In effect. No material amendments through 2026.
What it does: Allows a landlord to withdraw residential rental property from the rental market entirely. After withdrawal, the property can be sold, converted, or demolished.
Costs (LA City relocation fees, 2025–2026):
- Eligible tenants: $10,650–$13,950
- Qualified tenants: $22,450–$26,550
- Mom-and-pop landlords: $10,200–$20,600
- Payment due within 15 days of eviction notice
- Re-rental within 2–10 years triggers tenant first-right-of-return protections
Sale price impact: Moderate to high for specific strategies. Ellis-then-demolish or Ellis-then-convert can unlock significant value on older buildings in certain zones. But the relocation cost math is steep — a 20-unit building with qualified tenants can face $500K+ in mandatory payments before any sale proceeds are realized.
Michael's angle: Ellis remains legal. On most buildings, it is also cost-prohibitive. Some owners are trapped in older buildings not by rent control law but by exit economics. Knowing this is not the same as avoiding it — understanding the math before you buy or before you consider a value-add strategy is where the discipline matters.
Source: housing.lacity.gov/rental-property-owners/relocation-assistance-information
Status: Effective April 1, 2024.
What changed:
- Owner move-in (OMI) evictions: owner, spouse, domestic partner, children, grandchildren, parents, or grandparents must actually occupy as primary residence, within 90 days of tenant departure, for at least 12 continuous months
- Substantial remodel evictions: landlord must detail intended work in notice and inform tenant of reoccupancy rights if work is not completed
- Explicit penalties for violations
Sale price impact: Low to moderate, scenario-dependent. For value-add buyers planning quick turnover via OMI, SB 567 substantially raises the risk and cost of that strategy.
Michael's angle: SB 567 makes OMI a worse exit pathway than it used to be. For owners considering selling to a buyer with a value-add thesis that assumes OMI turnover, the buyer pool's underwriting has tightened. If your building sells on "upside from tenant turnover" positioning, the pricing discount is larger than it was in 2023.
Source: caanet.org/governor-signs-bill-revising-states-no-fault-eviction-requirements/
Status: In effect. Annual enforcement fee ($31.05/unit) effective January 2025.
Applies to: All LA City residential rental units not covered by RSO (since RSO has its own just-cause provisions).
What it requires:
- At-fault evictions: 3-day notice to pay or quit, standard grounds
- No-fault evictions: 30–60 day notice + relocation assistance
- All eviction notices must be filed with LAHD within 3 business days of service
Sale price impact: Low. JCEO adds operating friction and a small per-unit fee but does not move valuations materially on its own.
Michael's angle: JCEO is the second-order regulatory layer for LA City non-RSO buildings. Combined with AB 1482, it creates a two-part regime (rent cap + eviction protections). Small but real cost and complexity.
Source: housing.lacity.gov/residents/just-cause-for-eviction-ordinance-jco
Status: Effective July 1, 2024.
What changed: Security deposits capped at one month's rent for most landlords (previously two months unfurnished, three months furnished). Small-landlord exception (≤2 properties, ≤4 units total, held as natural person/LLC/family trust) allows up to two months.
Sale price impact: Minimal. Reduces pre-lease capital tied up in deposits; affects turnover reserve math slightly.
Michael's angle: Noise, not signal. Affects small owners more than institutional. Factor into pro forma reserves on takeover, nothing more.
Source: caanet.org/new-law-limiting-security-deposits-now-in-effect/
Status: Effective January 1, 2025.
What changed: Tenant response window to unlawful detainer filings extended from 5 court days to 10 court days.
Sale price impact: Low. Slower eviction timelines on problem tenants. Affects operational NOI marginally.
Michael's angle: Adds a few weeks to eviction timelines. For buildings with existing tenant issues, factor into hold-period projections. Not a deal-killer, but real.
Source: caanet.org/new-2025-laws-for-the-rental-housing-industry/
Status: Effective January 1, 2022 — but the legal position has moved twice and most summaries are out of date. In 2024 the LA County Superior Court held SB 9 unconstitutional as applied to five charter-city petitioners (Redondo Beach, Carson, Torrance, Whittier, Del Mar). The Legislature then passed SB 450, amending the language the ruling turned on, and on November 12, 2025 the Court of Appeal reversed and remanded. General law cities remain subject to SB 9; for charter cities the question is live again rather than settled. Los Angeles is a charter city but was never a petitioner, so SB 9 has applied in LA City throughout. Full explainer: SB 9 explained.
What it does: Allows ministerial approval of (a) lot splits and (b) duplex conversions on single-family-zoned parcels. Combined with ADU/JADU allowances, can produce up to 4–6 units on a formerly SFR parcel.
Applies to multifamily: Indirectly. SB 9 is a single-family tool. For multifamily owners, SB 9 affects neighborhood-level supply dynamics over time. In SFR-zoned areas adjacent to multifamily inventory, SB 9 conversions may pull demand toward smaller product types.
Sale price impact: Low and indirect. Relevant for strategic positioning in neighborhoods with heavy SFR conversion activity.
Michael's angle: Worth knowing, not worth underwriting against. Unless you own in a neighborhood undergoing rapid SFR-to-multi-unit conversion, SB 9 is background noise to your valuation.
Source: hcd.ca.gov/sites/default/files/docs/planning-and-community/sb-9-fact-sheet.pdf
Status: In effect July 1, 2026. Sets state minimum height and density near qualifying transit — up to roughly nine stories at a heavy-rail stop, eight at light rail / dedicated-lane BRT, stepping down by distance to a half mile.
The carve-out that decides it: SB 79 cannot be used where the project would demolish more than two rent- or price-controlled units occupied by tenants in the previous seven years, nor on a site where such units were demolished in that window. That excludes most occupied pre-1978 LA stock.
Los Angeles has moved to defer it citywide under the law's temporary exclusion provisions for cities that already zone for a majority of the required capacity near transit. Confirm any specific parcel with LA City Planning rather than a map.
Sale price impact: High for non-RSO parcels, small parcels and underbuilt sites near qualifying transit. Nil for occupied rent-stabilized buildings, which is where the market commentary and the statute disagree most.
Michael's angle: If a buyer prices SB 79 upside into an occupied RSO building, ask how many rent-controlled units the project demolishes. Above two, the argument does not survive the statute. Full explainer: SB 79 explained.
Three LA-adjacent cities maintain their own rent control regimes separate from LA City RSO. If your building is in one of these, none of the LA City rules apply directly — you are under that city's ordinance.
Santa Monica operates a rent control board with its own annual general adjustments, registration requirements, and just-cause rules. Historically one of the most restrictive regimes in the state.
West Hollywood has its own rent stabilization ordinance with a separate allowable-increase formula and tenant protections.
Beverly Hills maintains a rent stabilization program covering most multifamily built before 1995. Beverly Hills is also outside Measure ULA, which on a sale above $5.4 million is worth 4% of the gross price.
Full explainers: Santa Monica · West Hollywood · Beverly Hills.
Sale price impact: High, specific to the city. These regimes materially differ from LA City. Buildings in these cities require submarket-specific underwriting.
Michael's angle: Never price a Santa Monica building off LA comps without adjusting for the Santa Monica rent board trajectory. The cities are not interchangeable.
Source: Each city's housing department website.
No announced 2026 ballot measures directly target LA multifamily rent control or Costa-Hawkins. The primary legislative risk vectors are (a) attempts to lower the AB 1482 cap in future sessions and (b) the ever-present possibility of another Costa-Hawkins repeal attempt in 2027 or 2028. Santa Barbara City Council voted January 13, 2026 to draft a rent control ordinance that may appear on their 2026 ballot. San Leandro (East Bay) is advancing a separate ordinance. Neither directly affects LA.
Six truths that the twelve laws above combine to produce. These are what sellers most often miss.
This tracker is updated on a quarterly schedule and on an event-triggered basis when a material change occurs (new law signed, ballot measure results, major amendment). The quarterly update checklist lives at ~/sterman/legislation/UPDATE_TEMPLATE.md and takes approximately 20 minutes. Event-triggered updates are same-day.
Last verified: 2026-08-16. SB 79, SB 9's litigation status, AB 1482's current cap, the RSO's published rate and the Santa Monica / West Hollywood / Beverly Hills adjustments were re-checked against live sources on that date. Next scheduled verification: 2026-11-15.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap, specializing in Los Angeles multifamily transactions.This tracker is a public-interest document; it is not legal advice. For advice on a specific building, consult your real estate attorney.
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