Learn More About Allowable Rent Increases

The Oakland Rent Adjustment Ordinance allows an annual rent increase based on the regional Consumer Price Index (CPI). These annual rent increases are known as CPI increases or annual general rent increases. Each Spring, the RAP publishes the CPI increase for the next fiscal year which runs from August 1st through July 31st.

An owner can increase the rent on a covered unit only once in a 12-month period. The first increase cannot be effective any earlier than 12 months after the tenant moved into the unit. No rent increase can be imposed until at least six (6) months after the tenant was first served with the RAP’s Notice of Existence of the Residential Rent Adjustment Program (“RAP Notice”) (O.M.C 8.22.060). Each tenant covered under the Oakland Rent Adjustment Ordinance should receive a  RAP Notice when they move in. This notice explains the existence of the Rent Board and tenant’s rights under the rent law. If the owner does not give a RAP notice, the landlord cannot increase the rent until 6 months after the tenant receives the notice.

To increase the rent, a property owner must give a tenant at least a 30-days’ written notice. If the tenant has a fixed-term lease, unless the lease allows the increase, the property owner will have to wait until the expiration of the lease term to implement the CPI increase.

If all the tenants in the unit are new tenants, the owner can set the rent to market rate. If there are tenants in the unit who were original occupants under a prior tenancy, the owner is limited to following the Oakland Rent Adjustment Ordinance for allowable increases.
 

• August 1, 2024: 2.3% (current CPI)
• August 1, 2023: 2.5% 
• August 1, 2022: 3%
• July 1, 2021: 1.9% 
   
• July 1, 2020: 2.7%
• July 1, 2019: 3.5%
• July 1, 2018: 3.4%
• July 1, 2017: 2.3%
• July 1, 2016: 2.0%
• July 1, 2015: 1.7%
• July 1, 2014: 1.9%
• July 1, 2013: 2.1%
• July 1, 2012: 3.0%
• July 1, 2011: 2.0%
• July 1, 2010: 2.7%
• July 1, 2009: 0.7%
• July 1, 2008: 3.2%
• July 1, 2007: 3.3%
• May 1, 2006: 3.3%
• May 1, 2005: 1.9%
• May 1, 2004: 0.7%
• May 1, 2003: 3.6%
• July 1, 2002: 0.6%
• March 1, 1995 – June 30, 2002: 3% per year

The “CPI rate” takes effect on each August 1 and remains in effect through July 31 of the following year. A property owner can raise rent above the CPI rate, based on certain justifications.

• Banking
• Increased housing service costs
• Capital improvements
• Uninsured repair costs
• Fair return

Banking refers to deferred allowed annual rent increases. Annual rent increases that were not applied either fully or completely, can be applied in future years. Property owners may defer applying annual rent increases up to 10 years. Rent increases that were not imposed within 10 years expire. If challenged, evidence of the rental history of the subject unit is required.

• Banking Rent Increase Calculator Instructions
• Banking Rent Increase Calculator

Housing service costs are expenses for services provided by the property owner. The costs are related to the use of a rental unit. These costs are also known as “operating expenses”.

If a tenant challenges a rent increase, the landlord must present evidence to prove all claimed expenses. Staff will compare the most recent two years of operating expenses to determine if a rent increase is justified. The calculation in both years must provide a reasonable comparison of all expenses. You may not isolate any single expense.

Expenses considered include:

1. Business license and insurance,
2. Utilities (electricity, gas, water, garbage)
3. Maintenance and repairs
4. Managerial costs
5. Other legitimate annually recurring expenses to operate the rental property, except debt service

• Increased Housing Costs Rent Increase Calculator

Capital improvements include improvements to the property. A landlord may apply a rent increase to reimburse themselves for property improvements that benefit the tenants. Reimbursement is limited to 70% of the cost of the improvement amortized over its useful life. Property owners must also show that these costs were paid. Examples include: copies of receipts, invoices, bid contracts or other documentation.

• Capital Improvements Rent Increase Calculator Instructions
• Capital Improvements Rent Increase Calculator

Uninsured repair costs are losses that are not reimbursed to the property owner. These losses are related to damage from fire, earthquake, or other disasters. These costs must be associated with repairs to meet state or local laws. An increase for uninsured repairs is calculated the same way as an increase for capital improvements.

Property owners are entitled to the opportunity to receive a fair return. Ordinarily, a fair return will be measured by maintaining the net operating income (NOI) produced by the property in a base year, subject to CPI related adjustments.

Rent increases that exceed the CPI increase may be justified for one or more of the reasons listed. Owners may used more than one justification to increase the rent at the same time.

• CPI, banking, and capital improvements can be passed through as a rent increase in a single petition.
• Landlords cannot apply a rent increase based on a CPI increase with an increase based on increased housing service costs or fair return. Increased housing service costs or fair housing justifications replace the CPI increase.

Rent increases that exceed the CPI increase may be valid for one or more of the reasons. Owners may combine more than one justification to increase the rent at the same time.

• Owners can combine CPI, banking, and capital improvements for a rent increase in one petition.
• Landlords cannot combine CPI with increased housing service costs or fair return.
• Increased housing service costs or fair housing justifications replace the CPI increase.