Los Angeles has more rent control laws, more transfer tax exposure, and more regulatory variability between adjacent properties than any other multifamily market in the United States. This guide covers the three frameworks that matter most for every apartment building transaction in the LA metro: Measure ULA, the eight separate rent control jurisdictions, and the 2026 updates that are actively changing deal economics right now.
Whether you are selling a 6-unit in Silver Lake, buying a 40-unit in Inglewood, or evaluating a portfolio across multiple LA municipalities, the regulatory picture is materially different depending on exactly where the property sits. This guide is structured to give you the specific, jurisdiction-level detail you need, not a general overview.
Measure ULA (the United to House LA initiative) is a transfer tax on high-value real estate transactions within the City of Los Angeles. Passed by voters in November 2022 and effective April 1, 2023, it imposes a significant additional tax on the seller of any property that sells at or above $5 million within the City of Los Angeles boundaries. The tax is separate from and stacks on top of the existing documentary transfer tax. It applies to all property types: residential, commercial, industrial, and mixed-use.
Measure ULA applies exclusively within the incorporated boundaries of the City of Los Angeles. Properties in Santa Monica, Beverly Hills, West Hollywood, Culver City, Inglewood, Long Beach, or unincorporated LA County are not subject to this tax. A $10M building in Culver City has zero ULA exposure. The same building one block away inside City of LA limits would generate $550,000 in additional seller-side tax at closing. This boundary distinction is one of the most significant pricing variables in the current market.
Measure ULA is paid by the seller at close of escrow, calculated on the gross sale price. There is no netting for debt, costs, or other encumbrances. The full tax is due regardless of the seller's equity position.
Exemptions and Exclusions
Exemption qualification must be established and documented prior to closing. It is not self-executing. Properties that appear to qualify require formal confirmation through the City of LA Office of Finance before escrow closes. Errors in exemption qualification can result in the full tax becoming due with interest and penalties. Always confirm with counsel before relying on an exemption at closing.
The Los Angeles metro contains at least eight separate and independent rent control frameworks. They operate under different statutes, apply to different building vintages, permit different annual increases, and impose different eviction standards. A property's rent control classification determines its buyer pool, its income ceiling, and its long-term value trajectory, often more than any other single variable.
The City of LA's Rent Stabilization Ordinance covers residential rental units in buildings built before October 1, 1978 with two or more units. Annual increase: currently 4% (with gas/electric included) or 3% (tenant pays utilities), set annually by LAHD. Just cause eviction required. Relocation assistance mandatory for no-fault evictions. Covers the largest concentration of rent-controlled units in the entire metro.
Among the most restrictive rent control regimes in California. Established by City Charter in 1979. Covers buildings built before April 10, 1979 with two or more units. Annual increases set by the Rent Control Board, typically 1–3%. Strict limits on capital improvement pass-throughs. Active Board enforcement and adjudication. Vacancy decontrol applies on unit turnover, but just cause eviction protections strongly limit tenant turnover in practice.
Beverly Hills operates a two-chapter rent stabilization structure. Chapter 5 governs pre-October 20, 1978 apartment buildings. Maximum annual increase: 3% of current rent. Landlords must file annual registration statements with the City. Just cause eviction required for covered units. Capital improvement pass-throughs permitted but regulated. More landlord-friendly in practice than Santa Monica or the City of LA.
West Hollywood incorporated in 1984 in part to protect its tenant population. Strong ordinance covering pre-1979 multifamily buildings. Annual increases tied to CPI, historically among the lowest permitted in the metro. Tenant-friendly just cause protections and active enforcement. Buildings must register with the Rent Stabilization Division. Considered one of the more complex operating environments for landlords in the region.
Covers most residential rentals in buildings built before 1995 and first occupied before February 1, 1995. Maximum annual increase: 3% or 60% of CPI, whichever is lower. Just cause eviction protections apply. Ordinance passed in 2020 and continues to evolve through City Council action. Properties near the City of LA border require careful jurisdiction verification. Boundaries are not always obvious.
Covers residential rentals with a maximum annual increase of 5% for stabilized units. Includes a rolling 15-year Certificate of Occupancy (CoO) exemption. Buildings that received their CoO within the past 15 years are fully exempt. This creates meaningful investment opportunity in newer Inglewood stock. The 5% cap is higher than the City of LA's current 3–4% range, affecting how buyers model yield.
Long Beach's primary protection is just cause eviction rather than a strict rent cap. California's AB 1482 (5% + CPI, max 10%) serves as the de facto annual rent limit for most Long Beach multifamily stock. A separate Tenant Relocation Assistance Ordinance applies for certain no-fault evictions. The absence of traditional hard rent control makes Long Beach one of the more investor-accessible markets in the metro, with a different buyer profile than City of LA buildings.
Applies only to properties in unincorporated areas of LA County, not within any incorporated city. Covers most residential rentals built before February 1, 1995. Annual increases limited to the lower of 3% or 60% of regional CPI. The County significantly expanded its ordinance in 2020. Communities like East LA, Altadena, and portions of the San Gabriel Valley in unincorporated territory fall under County jurisdiction, frequently misidentified by out-of-area buyers.
Two nearly identical buildings a few hundred feet apart (one inside the City of LA, one in unincorporated county territory) can have materially different rent control classifications, permitted annual increases, and eviction requirements. This jurisdictional complexity creates persistent pricing inefficiencies that well-informed buyers can exploit and uninformed sellers frequently leave on the table. Understanding exactly which framework applies to a given property is step one in any accurate underwriting.
These recent developments are directly relevant to apartment building owners and investors operating in Los Angeles. Each one has had or is expected to have a measurable effect on deal structure, pricing, or operating income.
Following a legal challenge that temporarily stayed Measure ULA, Los Angeles voters passed Measure HD in November 2024, re-enacting the transfer tax with minor structural modifications. The 4% and 5.5% rate structure was preserved. The measure addressed constitutional challenges by restructuring the tax as a general tax requiring a two-thirds majority. Sellers of high-value properties in the City of LA should confirm current tax status and any pending litigation developments with counsel before closing.
SB 567 amended AB 1482 to add stricter enforcement mechanisms around owner move-in and relative move-in evictions. Owners invoking owner move-in as just cause must now occupy the unit for a minimum of 24 months (up from 12). Violations expose landlords to damages of three times monthly rent plus attorney fees. This directly affects exit strategy for buyers intending to reposition rent-controlled buildings through vacancy, a commonly underwritten value-add path that is now more legally constrained.
California's AB 1482 limits rent increases for most non-exempt residential units to 5% plus regional CPI, with a hard cap of 10%. For 2026, the applicable CPI adjustment for the Los Angeles metro results in a maximum permitted annual increase of approximately 8.8% for AB 1482-covered units. This is distinct from, and generally higher than, local RSO limits in most LA jurisdictions. Buildings exempt from local ordinances (including newer construction in certain cities) may be subject to AB 1482.
The Los Angeles Housing Department set the allowable RSO rent increase for February 1, 2025 through January 31, 2026 at 4% for units where landlord provides gas and electricity, and 3% for units where tenants pay their own utilities. RSO increases are not cumulative. Missed increases cannot be banked and applied in future years. Owners who have not raised rents in multiple years cannot retroactively capture those allowances.
The regulatory environment described in this guide changes through legislation, court decisions, and administrative rule-making. More importantly, the interaction between these frameworks and any specific property requires analysis that goes beyond the general rules: whether a building is covered, what its rent roll looks like relative to allowable rents, whether pending increases are properly documented, and what the full transfer tax exposure is at various price points.
The Group CRE operates exclusively in the Los Angeles multifamily market. Every transaction starts with a full regulatory audit of the property, identifying the applicable framework, modeling the tax exposure, and determining the buyer profile that will pay the most for the asset given its regulatory status. If you own a building in LA and are considering a sale, or if you are evaluating an acquisition, we are happy to provide that analysis at no cost as part of an initial consultation.
