Rental Housing Board to Set 2.5% Cap on Annual Rent Increases

[Editor’s note: An earlier version of this article has been updated.]  Renters in Pasadena’s rent-controlled units could see their rent rise by as much as 2.5% next year under a cap the Pasadena Rental Housing Board is scheduled to set on June 18.

That ceiling, known as the Annual General Adjustment, is the maximum a landlord may raise the rent on an existing tenancy in a covered unit, and it would apply for the 12-month period from Oct. 1, 2026, through Sept. 30, 2027. Because the figure is fixed by a formula written into the city’s housing charter, the board’s role is largely to confirm the calculated rate; as an independent body, it would adopt the adjustment directly rather than send it elsewhere for approval.

The authority comes from the Pasadena Fair and Equitable Housing Charter Amendment, which charges the board with setting allowable rent increases at fair and equitable levels and authorizes it to adopt regulations governing those increases. The charter limits increases on covered units to either the Annual General Adjustment or an amount won through a petition for an upward adjustment, which makes the annual rate the primary lever most landlords have to raise rents.

The adjustment equals 75% of the rise in the Consumer Price Index for the Los Angeles-Riverside-Orange County region over the 12 months ending in March of the year the rate is set, rounded to the nearest one-quarter percent. The Consumer Price Index climbed 3.4% in the year ending March 2026, according to data published by the U.S. Bureau of Labor Statistics, and 75% of that increase yields the 2.55% figure now before the board.

Timing matters for landlords who want to use the increase. The charter requires the board to announce the adjustment no later than Sept. 1 each year, with the new rate taking effect Oct. 1. A landlord must impose the increase within the 12 months between Oct. 1 and Sept. 30; miss that window, and the adjustment is gone for the year and cannot be carried forward.

Staff recommend that the board also find the action exempt from the California Environmental Quality Act under the common-sense exemption. The report was prepared by Stanko Zovko, a Program Coordinator III with the Rent Stabilization Department, and submitted by Executive Director Helen Morales.

The resolution is not expected to affect the board or the department budget, according to the staff report. The real impact lands on the public: for renters, the rate sets how much their housing costs can legally climb in the coming year; for housing providers, it caps what they can charge without filing a separate petition for an upward adjustment.

The Pasadena Rental Housing Board is scheduled to meet at 6 p.m. on Thursday, June 18, in the Council Chamber at Pasadena City Hall, 100 North Garfield Avenue, Room S249, in Pasadena. For more information call (626) 744-7311 or visit https://www.cityofpasadena.net/commissions/agendas/.