In California, being a landlord doesn't mean you can increase rent by whatever amount you want each year. If you're a landlord in California or planning to purchase rental properties for leasing purposes, make sure to pay close attention to the following parts.

According to the tenant protection law implemented in January 2020, if a landlord wishes to increase the rent for a tenant who has been residing for one year or more, the rent increase cannot exceed 10% of the total rent, or the rent increase can be 5% plus the local CPI (Consumer Price Index), whichever is lower. For example, if the original rent is $1000 per month, under the first method, the increase cannot exceed 10%, which would be a maximum of $100 per month. Alternatively, under the second method, if the CPI for the San Francisco Bay Area in August is 3.4%, then the maximum allowable increase would be 5% + 3.4%, totaling 8.4%, which would mean a maximum increase of $84 per month. Comparing these two methods, the second method results in a smaller increase. Therefore, according to the tenant protection law, landlords can only increase rents according to the second method.

However, this is only a general situation in California. In certain cities within the Bay Area, there are stricter controls on rent increases. For example, in San Francisco, the government regulations stipulate that from March 1, 2023, to February 29, 2024, rent increases cannot exceed 3.6%. In Mountain View, from September 1, 2023, to August 31, 2024, rent increases cannot exceed 5%. Similarly, in San Jose, Los Gatos, Hayward, among other cities, rent increases are also capped at 5%.

One more thing to note is that as a landlord, you must provide written notice to your tenant at least 30 days before increasing the rent. If you deliver the written notice to the tenant by mail, you must provide an additional five days to ensure the tenant has sufficient time to respond.