California Rent Increase Laws: The AB 1482 Cap Explained
Raise a California tenant's rent above the legal cap and the increase doesn't hold. The tenant can refuse to pay the excess, and you've spent goodwill on a number you can't enforce. For the most-searched rent-law state in the country, that's a costly mistake to make by accident.
California's statewide cap comes from AB 1482, the Tenant Protection Act. The rule itself is simple: 5% plus local inflation, capped at 10% a year, whichever is lower. The complications are who it covers and how the inflation piece is calculated.
Here's the formula, a worked dollar example, the exemptions that matter, and what the cap means when you set a price.
This is a general guide for landlords, not legal advice. The CPI figure changes annually and local ordinances vary. Confirm the current numbers for your city before you raise rent.
How the AB 1482 cap works
The maximum annual increase under AB 1482 is:
5% + the regional Consumer Price Index (CPI), with a hard ceiling of 10%.
You take whichever is lower — the 5%-plus-CPI figure or 10%. So in a low-inflation year the cap might be 7% or 8%; in a high-inflation year it never exceeds 10%, no matter how high CPI runs.
The CPI piece is regional and recalculated every year. California is covered by a few metro CPI regions, so the exact number depends on where the property is and which year you're in. Look up the current published figure for your region before you calculate.
Math in action
Say the current rent is $2,000 and the regional CPI for your area this year is 3.5%.
- Cap = 5% + 3.5% = 8.5% (under the 10% ceiling, so this is the limit).
- Maximum increase = $2,000 × 8.5% = $170.
- New maximum rent = $2,170.
Now suppose inflation spikes and regional CPI comes in at 6%.
- 5% + 6% = 11%, which is over the ceiling, so the cap drops to 10%.
- Maximum increase = $2,000 × 10% = $200.
- New maximum rent = $2,200.
The 10% ceiling is the backstop. CPI moves the cap between roughly 5% and 10%, but never above it.
Who AB 1482 covers — and who's exempt
The cap is broad but not universal. Common exemptions include:
- Single-family homes and condos not owned by a corporation or REIT, if the landlord gives the required written exemption notice.
- New construction — housing with a certificate of occupancy issued within the last 15 years (a rolling window, so a building ages into coverage).
- Deed-restricted affordable housing and certain other regulated units.
- Duplexes where the owner lives in one of the two units.
If your property is exempt, the statewide cap doesn't bind you — but a local ordinance still might. Check both.
Local ordinances can be stricter
AB 1482 sets a statewide floor of protection, not a ceiling. Cities can and do impose tighter caps. Los Angeles, San Francisco, Oakland, San Jose, and others have their own rent-stabilization rules that often cap increases below the AB 1482 number and cover different units.
When a local ordinance is stricter, it governs. So the order of operations is: check your city's rules first, then fall back to AB 1482 if no local cap applies.
Just cause comes bundled in
AB 1482 also carries a just-cause eviction requirement for covered units once a tenant has been in place long enough. You can't sidestep the rent cap by ending a tenancy without a qualifying reason. The pricing cap and the eviction rules are part of the same law, so treat them together.
What the cap means for pricing
The cap squeezes you mid-tenancy, not at the start. For most covered units, AB 1482 limits the increase on a sitting tenant — it generally doesn't dictate the rent you set for a brand-new tenancy.
That makes turnover your reset point. When a unit goes vacant, you usually have your one clean chance to bring it to market. Underprice it then and the cap means you'll claw back the gap a few percent a year — slowly. So the move is to price each vacancy to current comps, precisely, because the law limits how fast you can fix a number that's too low.
The takeaway
California rent increase laws under AB 1482 cap annual increases at 5% plus regional CPI, never above 10%, with exemptions for newer buildings and most non-corporate single-family homes — and stricter local ordinances on top. Know your number, and remember the cap bites between tenancies, not at move-in.
Price every vacancy to the market while you can. The cap sets how fast you can adjust; the comps set where you should land.
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