How Much Can a Landlord Raise Rent in California in 2025?

Are you a landlord in California? Staying informed on state rent control laws isn't just good practice; it's essential. In 2025, California will continue to enforce specific caps on rent increases, shaped mainly by the Tenant Protection Act of 2019 (AB 1482). This legislation aims to strike a balance between tenant stability and landlord flexibility, particularly in high-demand housing markets.

This guide will help you understand how much you can legally raise the rent, why limitations exist, and how to calculate rent increases using tools like the Consumer Price Index (CPI).

Why Do Landlords Raise Rent?

Landlords raise rent for several reasons:

1. To keep up with rising operating costs such as property taxes, insurance, repairs, and utilities.
2. To reflect the appraised rent value based on local real estate trends and market demand.
3. To maintain profitability in line with inflation and cost of living.
4. To fund capital improvements or upgrades that enhance property value and tenant experience.

Understanding the motive behind rent increases helps frame the legal and ethical landscape of rental property management.

Rent Raise Percentage Allowed Under AB 1482

As of 2025, California landlords covered by AB 1482 must follow the state's rent cap formula: The annual rent increase is limited to 5% of the current rent plus the local Consumer Price Index (CPI), capped at 10% per year.

How to Calculate Rent Increase:

Let's say: - Current monthly rent: $2,000 - Local CPI for your metro area: 4%

Calculation: - 5% of $2,000 = $100 - 4% of $2,000 = $80 - Total allowable increase = $180

New monthly rent = $2,000 + $180 = $2,180

It provides a transparent way to answer the common question: “Can a landlord raise the rent every year? Yes, but only within state-defined limits.

Note: CPI values vary by region and are published annually by the Bureau of Labor Statistics (BLS). Use the April CPI report of the current year for your calculations.

What Is Rent Control?

Rent control refers to a set of government policies that regulate:

1. How much landlords can raise rent (Price Control)

2. Under what conditions they can evict tenants (Eviction Control)

These policies aim to: - Prevent rent gouging and displacement - Promote housing stability - Preserve affordability in high-cost cities

Types of Rent Control Regulations:

· Price Control: Limits the amount and frequency of rent hikes

· Eviction Control: Requires landlords to show “just cause for lease termination

Cities like Los Angeles, San Francisco, and Oakland have strict local rent control laws in addition to the California law, AB 1482.

Exemptions: Who Doesn't Have to Follow AB 1482?

Not all properties fall under the scope of AB 1482. Here are some common exemptions:

1. Single-family homes and condos (unless owned by corporations, REITs, or LLCs)
2. New construction (certificate of occupancy issued within the last 15 years)
3. Owner-occupied duplexes
4. Student Housing
5. Short-term rentals (14 days or fewer)
6. Government-subsidized or deed-restricted affordable housing

If your property qualifies for exemption, you must notify tenants in writing using a proper legal disclosure.

What AB 1482 Means for Evictions?

AB 1482 includes strong “just cause eviction protections to prevent tenant displacement.

At-Fault Cause:

Landlords may evict tenants for reasons like: -

1. Non-payment of rent
2. Lease violations
3. Criminal activity
4. Refusal to sign a lease renewal

If the violation is curable (e.g., late rent), landlords must offer an opportunity to rectify the issue before proceeding with any further action.

No-Fault Cause:

These include:

1. Owner move-in
2. Major renovations
3. Government-mandated relocation.

In such cases, landlords must offer one month's relocation assistance to tenants.

What's New in 2025?

1. Security Deposit Reform (AB 12)

Effective July 1, 2024, California now limits security deposits to one month's rent. - Applies to most rentals - Exemption: Landlords with two properties of four units or fewer.

2. Screening Fee Modernization (AB 1764)

Landlords can now deliver screening fee receipts via email with tenant consent. This update supports a more modern and efficient rental process.

The Effects of Rent Control on Landlords

Pros:

1. Reduces tenant turnover
2. Provides steady income
3. Builds long-term tenant relationships

Cons:

1. Limits on rental income growth
2. Reduced incentive for upgrades
3. Added compliance and documentation workload

A study in San Francisco showed that rent control reduced tenant displacement but also led landlords to withdraw units from the market, thereby reducing the overall supply of rental housing.

Key Takeaways for Landlords in 2025

1. You can raise the rent every year, but only within AB 1482's cap (5% + CPI, up to 10%)
2. Know your property type to determine exemption status
3. Always issue notices of exemption and follow “just cause procedures
4. Use appraised rent, market data, and CPI when planning rent adjustments
5. Stay compliant with new laws like AB 12 and AB 1764

Make Smarter Leasing Decisions with CreditLink Secure

At CreditLink Secure, we support landlords with:

1. In-depth tenant screening credit reports
2. Eviction and criminal background checks
3. Online document management
4. Quick, reliable application processing

Our tools help landlords minimize risk, comply with local laws, and choose the right tenants with confidence.

Get in touch with one of our tenant screening experts.

Disclaimer: This post is for informational purposes only. It does not constitute legal, financial, or tax advice. Please consult a professional advisor for guidance specific to your property and location.