As of August 1, 2025, Bay Area landlords are facing new rent increase constraints under California’s AB 1482 Tenant Protection Act of 2019. The allowable increases have dropped significantly from last year’s caps, with current rates ranging from 6.3% to 7.7% depending on your county location.
Understanding AB 1482: The Essentials
AB 1482 establishes two fundamental tenant protections that every property owner should understand:
- Annual rent increase limits: 5% plus regional Consumer Price Index (CPI), capped at 10% maximum
- Just cause eviction protections: After 12 months of tenancy, landlords must provide legal justification for lease terminations
The law applies to most multifamily rental housing constructed before 2005, with specific exemptions for single-family homes not owned by corporations, REITs, or LLCs with corporation members.
2025-2026 Bay Area Rent Caps by County
California Civil Code §1947.12 defines the allowable CPI increase to be the CPI-U for “All Urban Consumers for All Items” based on the metropolitan area as released in April of each year, as published by the Bureau of Labor Statistics. Once released, the rate lock goes into effect on August 1st of the same year. For example, the CPI-U for the San Francisco-Oakland-Hayward metropolitan area was published at 1.3% as of April 2025. Therefore, as of August 1, 2025, the maximum allowable increase for counties located within this metropolitan area is 5% + 1.3%. This creates a uniform 6.3% maximum allowable increase across:
- Alameda County
- Contra Costa County
- San Francisco County
- San Mateo County
- Marin County
However, suppose a county falls outside a metropolitan area. In that case, the CPI rate is determined by the CA Consumer Price Index for All Urban Consumers for All Items, as published in April of each year by the Department of Industrial Relations. This year, that rate of change is 2.7%. Counties with higher CPI allowing 7.7% increases include:
- Santa Clara County
- Sonoma County
- Napa County
- Solano County
- Monterey County
This represents a significant decrease from 2024’s caps, which reached 8.8% in many counties.
Critical Implications for Property Owners
The “Use It or Lose It” Rule
Important: Under AB 1482, you cannot “bank” rent increases. If you skip this year’s allowable increase, you permanently lose that opportunity.
This makes regular, modest rent adjustments essential for:
- Keeping pace with rising operating expenses
- Maintaining your property’s competitive market position
- Protecting long-term investment returns
Property Valuation Impact
Consistent rent increases directly affect your property’s market value. Properties with regularly adjusted rents typically appraise higher than comparable properties with stagnant rental rates—a crucial consideration for future sale or refinancing opportunities.
Navigating State vs. Local Regulations
While AB 1482 establishes the baseline requirements, local rent control ordinances may impose stricter limitations. Cities including San Francisco, Oakland, Berkeley, and San Jose maintain their own rent boards with calculation formulas that often produce lower caps than state law permits.
Key reminder: AB 1482 establishes the floor, not the ceiling. Local ordinances can and do supersede state regulations when they’re more restrictive. For example, properties under rent control ordinances in San Francisco have a significantly reduced maximum allowable rent increase published each year by the rent board.
Essential Compliance Steps
To ensure full compliance with current regulations:
- Verify coverage: Confirm whether your property falls under AB 1482 or local rent control ordinances
- Calculate limits: Determine your county’s maximum allowable increase
- Make strategic decisions: Decide whether to implement this year’s increase – remember, unused increases cannot be carried forward
- Serve proper notices: Provide required 30 or 90-day notices, depending on the increase percentage
- Update documentation: Include mandated AB 1482 language in all lease documents
- Maintain records: Keep comprehensive documentation of CPI data, calculations, and tenant notices
Looking Forward
With inflation moderating, we anticipate continued smaller caps in the near term. However, should inflation spike again, caps could increase—though they’ll never exceed the 10% statutory maximum. AB 1482 remains in effect until 2030, ensuring that CPI-driven rent caps will continue to shape Bay Area rental markets.
Strategic Takeaways for PURE Clients
For our property management clients and investor partners, this update underscores the critical importance of strategic rent management. Regular, compliant increases protect both cash flow and property value—especially vital in today’s evolving market conditions.
The division between 6.3% and 7.7% caps across Bay Area counties reflects local economic variations. Still, the central message remains clear: consistent, legal rent growth is essential for maintaining your investment’s performance and competitive market position.
Whether you’re planning rent increases, evaluating investment returns, or seeking clarity on tenant regulations, understanding these AB 1482 changes is crucial for protecting your interests in one of the nation’s most complex housing markets.
Need assistance navigating AB 1482 compliance or rent increase implementation? Contact your PURE Property Management team for expert guidance tailored to your specific property and location. We’re here to help you maximize your investment while maintaining full regulatory compliance.
