California's rent caps now run 8.1% to 8.8%, while Santa Monica caps increases at 2.6%

New caps on rent increases took effect across California on August 1, and where you live decides whether the number that governs your lease is 8.6% or 2.6%. The statewide ceiling under AB 1482 runs from 8.1% to 8.8% depending on the region, while local ordinances in a handful of cities land far below that.

The state figure comes from a formula, 5% plus regional inflation, capped at 10%. Here's how it shook out for this cycle, which runs through July 31, 2027.

Across the 74 California cities we track with at least 100,000 residents, rent rose about 3.1% over the past year, so these ceilings sit at roughly two to three times what the market is actually doing.

The San Diego drop wasn't a building boom

San Diego is the only region whose cap fell, down from 8.8% last year. No other region moved down. The article credits that drop to construction. Steven Greenhut of the Pacific Research Institute's Free Cities Center told The Center Square that "San Diego has seen a building boom, and that's how you reduce rents, through competition and increasing the supply."

The broader argument about supply is the mainstream economic view, but it isn't what moved this particular number. The cap tracks consumer price inflation, not rent, so San Diego's ceiling fell because general inflation cooled in that metro rather than because apartments got cheaper. San Diego rent is actually up 6.6% over the past year in our data, the second-fastest rise among the large California cities we track.

We walked through what that means for San Diego renters in a separate look at the 8.2% cap, and the same formula quirk pushed the Los Angeles cap up to 8.7% in a year when LA rents barely moved.

Local rules are where the real limits live

The statewide cap is a ceiling, and plenty of cities sit well underneath it. Santa Monica's ordinance, in place since 1979, holds increases to 75% of the change in the consumer price index with a hard maximum of 3%, and this year the allowed increase came to 2.6%. Los Angeles caps its rent-stabilized units at up to 8% but sets a 3% floor-level increase when inflation runs under 3%, which is what applied this past year.

Santa Monica rent averages about $3,517 and has been flat over the past year, down 0.1%, so a 2.6% cap there permits roughly $91 a month while the statewide 8.6% on that same rent would allow about $302. That's a $211 gap every month.

Rose Patel, Santa Monica's rent control public information manager, framed the value as predictability. "Rent control does provide a level of stability for tenants, especially those on fixed incomes, and they know from year to year what their rent increase might be because it is capped at 3%," Patel said. Greenhut sees a cost on the other side, arguing that long-held below-market units get treated as an asset, and that "it transfers the property rights from the owner to the tenant."

What the caps don't touch

San Francisco is the clearest illustration of the limits here. It carries the highest cap in the state at 8.8% while rents rose 26% over the past year, because AB 1482 exempts housing built in the last 15 years and doesn't restrict what a landlord charges a new tenant after the old one leaves. A cap governs your renewal, and it does nothing about the price on a listing.

Other exemptions include owner-occupied duplexes, plus single-family homes and condos that aren't corporate-owned when the tenant gets a written exemption notice. The law also requires just cause to end a tenancy, and under Senate Bill 567 an owner who displaces a tenant to move in or remodel must either waive the final month's rent or pay a month's rent as relocation help.

You'll want to check your city's own ordinance before accepting any increase, since the local number usually controls and it can run a third of the state ceiling. We looked at whether these policies move rents at all in our review of the evidence on caps and freezes.

Sources

• The Center Square, "New rent limits take effect in California"

• California Attorney General, landlord-tenant guidance and regional caps

• City of Santa Monica Rent Control Board

• Los Angeles Housing Department, rent stabilization

• RentDataNow California rent data (Zillow Observed Rent Index, June 2026)