Los Angeles County extended the state of emergency through September 29, 2025, marking the third continuation since July. Supervisor Lindsey Horvath has championed each extension, and investors should anticipate the likelihood of further rollovers.
Implications for Multi-Family Investors
Emergency declarations in California automatically trigger anti–price gouging restrictions under Penal Code Section 396. For real estate operators, this means direct limitations on rental pricing strategy:
Rent increases capped at 10% above pre-emergency levels for existing units.
New units brought to market cannot be listed above 160% of HUD Fair Market Rent (FMR).
Duration: Generally 30 days after a declaration, but reconstruction and cleanup-related caps may extend up to 180 days.
These measures place temporary ceilings on revenue growth, particularly in high-demand submarkets where rents might otherwise command stronger premiums.
Strategic Considerations
Expense Pass-Throughs: Owners can exceed the 10% threshold only if increases can be tied to verifiable cost drivers (labor, materials, capital improvements). Proper documentation is critical to withstand scrutiny.
Lease Structuring: According to attorney Niv Davidovich, lease terms that extend beyond 12 months are not subject to anti–price gouging statutes. Structuring 12.5 or 13 month leases offers compliance protection and secures stronger long-term rental growth.
Cash Flow Planning: With recurring extensions, operators should plan for a regulatory environment where near-term rent acceleration is constrained, and returns depend more heavily on operational efficiency and expense management.
Investor Takeaway
The repeated extensions of LA County’s emergency declaration underscore a growing trend: policy risk is now a key factor in revenue strategy for multi-family assets. Investors should evaluate their lease structures, document all cost-related rent adjustments, and consider how recurring extensions could impact portfolio-level NOI projections through year-end.
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