Rent Increases 101

Updated Sept. 18, 2023

Landlords often have a seemingly simple question for the Rent Program: “By how much am I allowed to increase my rent?” The answer is almost always: “It depends.” This primer is intended to help landlords navigate the rules regulating rent increases in the City of Alameda and avoid violations of the Rent Ordinance when notifying tenants of a rent increase.

In general, landlords should consider these 10 questions when implementing a rent increase:

Question 1: Is my property subject to rent control?

Certain types of properties are exempt from rent control under state law. As a result, the City of Alameda can not impose a cap on rent increases for rental units on these properties (although they are subject to other provisions of the Rent Ordinance, such as the regulations on “no fault” terminations of tenancy). The Rent Program refers to these properties as “partially regulated.”

Most rental units in Alameda, however, are “fully regulated” and subject to all provisions of the Rent Ordinance, including regulations on rent increases. Any multi-unit property built prior to February 1, 1995, is subject to rent control and the Rent Ordinance’s annual limit on rent increases.

For more information on the two categories of units, please click here.

The Alameda Rent Registry classifies every property with rental units as either fully or partially regulated, based on public land use records. If you are unsure whether your property is fully or partially regulated, please contact the Rent Program.

Most of the remainder of this guide applies to fully regulated units. For partially regulated units, please skip ahead to question 8.

Question 2: When was the last time the tenant’s rent increased?

The Rent Ordinance limits landlords to a single rent increase in any 12-month period. See Section 6-58.50(A)(PDF, 3MB), Alameda Municipal Code (AMC). A landlord cannot give a tenant a rent increase notice within a year of the last increase. This rule applies to the “effective date” of the rent increases, when tenants actually begin paying the new rent.

Example: If a rent increase becomes effective on June 1, 2022, the next time the landlord serves notice of a rent increase, its effective date cannot be before June 1, 2023.

Question 3: Have I registered the property and paid the annual program fee?

A landlord may increase rent only if the landlord has complied with all provisions of the Rent Ordinance, including payment of all program fees owed for the property and registration of all rental units. See Section 6-58.65(B)(PDF, 3MB), AMC.

If you have not registered a property, contact the Rent Program for assistance and staff will assist you with submitting registration information and paying the annual fee.

Once registered, you should receive information annually on how to pay the program fee by credit card via the online Rent Registry or by check via a mailed invoice. Depending on how much time has passed since the notice, you may need to contact program staff in order to complete an online payment. You may also contact staff to request a new copy of the invoice and/or invoices for previous year’s unpaid fees.

Question 4: What will the Annual General Adjustment be on the date the rent increase becomes effective?

The Annual General Adjustment, or AGA, is a percentage cap on the amount of the annual rent increase. Each year, the Rent Program calculates the AGA at 70% of the percentage change in the Consumer Price Index for the 12-month period ending April of each year; provided, however, in no event will the AGA be more than 5% nor less than 1 percent. See Section 6-58.15(A)(PDF, 3MB), AMC.

Landlords who have registered their rental properties and paid the annual program fee are permitted to increase the rent by a percentage less than or equal to the AGA, with no additional attachments or special notice required other than what is necessary under state law when implementing a rent increase.

The AGA is in effect from September 1 until August 31 of the following year. The percentage cap is determined by the AGA in effect on the effective date of the rent increase.

Example: The AGA for the period from Sept. 1, 2021, to Aug. 31, 2022, is 2.7%.  The AGA for the period from Sept. 1, 2022, to Aug. 31, 2023, is 3.5%. Regardless of when it was noticed, a rent increase effective Sept. 1, 2022, could not exceed 3.5%. However, if the notice stated that the rent increase was effective one day earlier, on Aug. 31, 2022, then it could not exceed 2.7%.

Question 5: Do I have any “banked” rent increases from previous years?

The Rent Ordinance allows landlords who choose not to raise the rent for a full 12 months, or choose to raise the rent by less than the full Annual General Adjustment (AGA), to “bank” those unused amounts. Any AGA increases a landlord was prohibited from imposing during the moratorium on rent increases due to COVID-19 shall similarly be considered “banked.” These unused portions can be carried over and added to a subsequent year’s AGA; however, such increases are subject to numerous restrictions.

One way to determine the amount, if any, you have “banked” is to consider the unit’s Maximum Allowable Rent, or MAR. Annually the Rent Program mails letters to tenants and landlords with the MAR for each rental unit, based on registration information submitted by the landlord. The MAR reflects what the rent would be if the landlord had taken every allowable rent increase since the first AGA went into effect, the tenancy began, or the property changed hands—whichever is most recent. The difference between the current rent and the MAR essentially tells you how much you have "banked."

Keep in mind that the Rent Ordinance’s banking restrictions may prevent you from simply increasing the rent to the MAR with the next annual rent increase. Please see Question 6 for more information.

Question 6: Which is smaller, the Maximum Allowable Rent or the current rent increased by the Annual General Adjustment + 3.0%?

Regardless of how much a landlord has “banked,” the Rent Ordinance prevents landlords from increasing rent (a) to a rent that exceeds the Maximum Allowable Rent as determined by the Rent Program or (b) by a percentage that exceeds the current year’s AGA plus 3.0%, whichever, i.e., (a) or (b), is smaller. See Section 6-58.70(E)(PDF, 3MB), AMC.

In other words, if you want to impose a rent increase using banked amounts, you must consider both of these calculations and go with the lesser of the two. If limited by the AGA + 3.0% rule, the remainder of the MAR will still be “banked” and potentially available for use in a subsequent year.

You can view a recording of a special training that goes into this issue in detail on our Workshops & Clinics page.

Question 7: Do any of the Rent Ordinance’s other restrictions prevent me from imposing a rent increase using “banked” amounts?

The Rent Ordinance also includes the following restrictions (see Section 6-58.70(PDF, 3MB), AMC):

  • A landlord may not implement a rent increase that uses banked amounts in consecutive years
  • A landlord may not implement a rent increase that uses banked amounts more than three times during a tenancy.

If either of these apply, you may not increase the rent by any more than the current Annual General Adjustment.

Please also note these additional regulations:
  • Banked rent increases do not transfer to a new owner when a property changes hands.*
  • Banked amounts from a prior tenancy cannot be imposed on new tenants.
  • While unlikely to affect most tenancies due to the other restrictions, a landlord may not bank more than 8.0%.
  • Due to extra protections enacted in response to the COVID-19 pandemic, any rent increase that includes banked amounts noticed prior to December 18, 2022, is invalid.

*Note: If a landlord has noticed a rent increase using banked amounts and then sells the property before the rent increase becomes effective, the banked amounts do not transfer to the new owner and therefore will not be available on that date. Such a rent increase is in violation of the Rent Ordinance. As a result, a new owner must rescind any pending rent increases in excess of the AGA issued by the previous owner or else will be responsible for reimbursing the tenant for any overpayments.

Question 8: Does the rent increase exceed 10 percent?

For all units, including partially regulated units, a rent increase that will result in a tenant's rent increasing by more than 10% cumulatively over a 12-month period is considered a Relocation Rent Increase. The tenant will be entitled to a permanent relocation payment if they choose to vacate within 90 days rather than pay the increase. See Section 6-58.85(A)(PDF, 3MB), AMC.

Question 9: Have I properly noticed the tenant?

Landlords must follow all requirements of state law when increasing the rent, including providing tenants with advanced, written notice of the increase. See the California Tenants guidebook for more information on state requirements.

For fully regulated units, any notice of a rent increase that exceeds the AGA by making use of “banked” amounts must also include an attachment, Form RP-203(PDF, 289KB), that informs tenants of their rights.

For all rental units, a notice of a Relocation Rent Increase (see Question 8) must also include an attachment, Form RP-209(PDF, 231KB), that informs tenants of their rights.

Question 10: Have I filed a copy of a rent increase requiring special notice with the Rent Program?

For rent increases requiring the use of either form RP-203(PDF, 289KB) or RP-209(PDF, 231KB) (see Question 9), the Rent Ordinance requires the landlord to file a copy of the notice with the Rent Program within three calendar days. See Section 6-58.35(P) and 6-58.70(D)(PDF, 3MB), AMC. For details, see the form instructions.

There is no filing requirement for a rent increase equal to or less than the current Annual General Adjustment.