rent increase limit

Rent increase limit – San Diego County rent cap law

Rent Increase Limit in San Diego County – updated for 2024

UPDATE: I have added new updates to the Tenant Protection Act – effective April 1, 2024, and updated the CPI, released April 10, 2024.

Also, Fox 5 News interviewed me about the rent cap law – check out the interview here.

rent cap law san diego

The rent increase limit, or rent cap, became effective on January 1, 2020. And, even though this happened over FOUR YEARS ago, I have trouble finding accurate information, or even a decent guide explaining what IS the rent cap maximum for San Diego County. So, here we are. If you have experienced the same frustration, I hope this article helps.

If you are a landlord, renter, or potential investor, I wrote this article for you. And, while this article applies to San Diego County, you will see how most of it also applies to all of California.

This article covers:

  • Does rent control exist in San Diego County?
  • What is the rent increase limit/rent cap law?
  • How is the rent cap calculated?
  • What is the current rent increase limit for San Diego County?
  • What happens if a landlord violates this law?
  • When does the law enforcing rent caps end?
  • What properties are exempt from the rent cap law?

Does Rent Control exist in San Diego County?

My short answer is NO.  In most cases, landlords can offer a property for rent at any amount they wish.

There are restrictions on rent increases and evictions. But the initial asking rents are often unchecked. (There are some exceptions, such as low income housing and student housing.)

The high initial asking rents are based on the limited supply and increasing demand for housing. So, what are rent caps?

Rent caps limit how much your landlord can INCREASE your rent. For example, a landlord can offer to rent residential property to you for $4000 per month. But, once you have agreed to pay $4000 per month, your landlord can’t suddenly increase the rent to $4500.

What is the rent increase limit/rent cap law?

The Tenant Protection Act of 2019 (TPA), or California Assembly Bill 1482,  became effective January 1, 2020. This is the statewide rent cap law.

Here’s an excerpt from the bill, the describes the new rent increase limit:

This bill would, until January 1, 2030, prohibit an owner of residential real property from, over the course of any 12-month period, increasing the gross rental rate for a dwelling or unit more than 5% plus the percentage change in the cost of living, as defined, or 10%, whichever is lower, of the lowest gross rental rate charged for the immediately preceding 12 months, subject to specified conditions. The bill would prohibit an owner of a unit of residential real property from increasing the gross rental rate for the unit in more than 2 increments over a 12-month period, after the tenant remains in occupancy of the unit over a 12-month period. 

Read the complete text of AB 1482 here.

How is the rent cap calculated?

There has been SO MUCH MISINFORMATION about this on the Internet, it makes me want to type this part out in caps…

The MAXIMUM annual rent cap = 5% PLUS the % CHANGE in the local Consumer Price Index (CPI).

Also, no matter what the change in CPI is, the annual rent increase can never exceed 10%. 

Now, most of us are asking, how do we calculate the % change in the CPI? 

And, which percentage change do we use? The CPI is updated throughout the year.

If you Google “California CPI,” you will find that there are many different indexes, both by region and by type. Different government entities print different tables, and as far as I can tell, all the numbers vary. So now what?

According to the California Association of REALTORS®, the real estate industry uses the change in CPI-U from March to March each year. They refer to the United Status Bureau of Labor Statistics, and the California Consumer Price Index for All Urban Customers (CPI-U). Here is the page for San Diego County.

I added a screenshot of that page, that shows the new CPI change.

The last number in the chart below, which is circled in red, 3.6, is the percentage change for March 2024.

What is the current rent increase for San Diego County?

For rent increases effective between August 1, 2023 and July 31, 2024, the maximum rent increase in San Diego County is:

5% base + 5.3% CPI change (from March 2023) = exceeds max 10% rent increase

For rent increases effective between August 1, 2024 and July 31, 2025 the maximum rent increase in San Diego County is:

5% base + 3.6% CPI change (March 2024, see below) = 8.6% max rent increase

This means that 8.6% is the maximum rent increase for the next 12-month period. While AB 1482 allows a landlord to increase rents twice per year, the total increase cannot exceed 8.6% for that period.

Also, remember that any rent increases 10% or less require a minimum 30-day notice to the tenant. Since the maximum rent increase can no longer exceed 10%, this means that any rent increase should require no more than 30 days’ notice. Of course, this does not apply if your landlord is exempt from this law.

What happens if a landlord violates this law?

The Tenant Protection Act was updated in 2024 to outline consequences for violating the law. Effective April 1, 2024, a landlord who raises the rent too high can be liable for actual and punitive damages, and attorney costs.

When does the rent cap law end?

This law will sunset on January 1, 2030.

What properties are exempt from the rent cap law?

Here are some examples of properties that are exempt from the rent cap law:

  1. A single family residence or condominium with NO corporate ownership. This applies ONLY IF the landlord is NOT a real estate investment trust, a corporation, or a limited liability corporation. The tenant must receive a notice of exemption with the rental agreement.
  2. Housing that is less than 15 years old.
  3. A duplex, where the landlord lives in one unit and rents out the other.
  4. Low income housing.
  5. School-owned housing.
  6. Housing already subject to more stringent rent control.

If you are a landlord who is exempt from the law, be sure to provide your tenants with the California AB 1482 Notice of Exemption. You can find sample forms online.

I’m tired of paying rent. Can I buy instead?

If you’re tired of paying off your landlord’s mortgage, consider homeownership. Of course I would love to help you! If you don’t want to contact me yet, here are a few articles to check out:

Buying a Home Q&A
Buyer Closing Costs – Buying a Home in California
Mortgage Affordability Calculation – How Much Home Can I Afford?

I’m tired of renting my property. Can I sell?

If you’re tired of being a landlord, consider selling. You can either cash out on your investment, or effect a 1031 Exchange.  Of course I would love to help you! If you don’t want to contact me yet, here are a few articles to check out:

What are Home Seller Closing Costs in California?
1031 Exchange – How Real Estate Investors Defer Capital Gains Tax
What to Expect When Selling Your Home – Seller Escrow Timeline
Selling Your Home Q&A

Of course, you are always welcome to Contact Me with any questions.