Pasadena Rental Board Approves Landlord Fair Return Rules

The Pasadena Rental Housing Board approved new regulations Thursday night authorizing landlords to petition for rent increases above the normal Annual General Adjustment limit in order to ensure a fair return on their properties. The meeting focused on balancing protections for tenants against landlords’ rights to maintain profitability. 

Board members engaged in significant debate about whether to set a 15% annual cap on total rent increases. Some argued it was unnecessary given other tenant protections, while others insisted it was crucial for preventing excessive rent hikes. 

The approved regulations establish a process for landlords to request “upward adjustments” to rents beyond the annual allowed increase. 

Key provisions, to be evaluated on a case-by-case basis when petitioned by a landlord, include: 

• A 15% annual cap on total rent increases, including both the regular allowed increase and any upward adjustments
• Use of 2021 as the “base year” for calculating fair returns, as mandated by the City Charter amendment
• Consideration of tenant hardship when evaluating increase requests 
• Amortization of capital improvement costs over time 

The Board also approved an amendment clarifying that owner-occupied single-family homes are exempt from registration requirements. This comes as the city’s rental registry implementation moves forward, with registration notices sent to 11,115 properties representing 33,805 units. 

Board members expressed concern about low tenant participation in recent stakeholder meetings. One tenant meeting had only four in-person attendees and 21 on Zoom, compared to over 30 landlords at a separate meeting. 

In other business, the Rent Stabilization Department announced staffing changes, including replacing a housing counselor position with an office assistant. 

The Board also welcomed new Deputy City Attorney Alyssa Martinez. 

Future agenda items will include a revised meeting calendar and consideration of making the policy ad hoc committee a standing committee. The Rent Stabilization Department also announced an upcoming landlord-tenant law and rent stabilization basics course on October 23rd. 

Public comments during the meeting expressed concerns about the regulations, the registration process, and the overall impact on property owners in Pasadena. 

The implementation date for the new regulations about rent increases was not specified in the meeting.