Rent Control in LA Under a New Mayor: What Private Investors in Class B/C Properties Need to Know Before June 2

by Hugh Hoang

With the LA mayoral primary days away, here’s how a Bass re-election, Raman victory, or Pratt win could reshape your RSO portfolio—plus practical steps to position your smaller multifamily assets for success no matter who wins.

As a broker who works almost exclusively with private investors owning smaller Class B and C multifamily properties in Los Angeles, I’ve seen firsthand how the 2025–2026 Rent Stabilization Ordinance (RSO) updates are already pressuring NOI and valuations. The tighter 1–4% annual caps (currently ~3% flat through mid-2026, with utility adders eliminated) hit pre-1978 buildings hardest—exactly the stock that dominates many private portfolios.

With the June 2 primary just days away, the next mayor could significantly influence enforcement, future RSO tweaks, and the broader regulatory environment. No candidate is expected to win an outright majority, so the primary almost certainly sends the top two finishers to a November runoff—making June 2 the first round of a two-round fight. Here’s a clear-eyed look at where each candidate stands, what the latest polling shows, and what it means for hands-on owners of smaller properties.

Quick Recap: Where We Stand Today with RSO

The recent overhaul (signed by Mayor Bass) lowered the rent-increase formula to 90% of CPI with a 4% ceiling and 1% floor. Vacancy decontrol under Costa-Hawkins remains, offering turnover upside, but compliance costs, relocation fees, and NOI compression are real for fragmented ownership. Many Class B/C assets in corridors like East LA or the 710 are already seeing cap-rate expansion and softer pricing. Private owners can’t just “wait it out”—you need proactive strategies.

The Candidates on Housing & Rent Control

Karen Bass (Incumbent)

Bass championed and signed the latest RSO tightening, framing it as tenant protection paired with supply efforts (42,000+ units fast-tracked, adaptive reuse). She emphasizes eviction prevention and affordability tools. A Bass re-election—whether by outright majority June 2 (unlikely) or via a November runoff win—means steady or expanded tenant protections, continued focus on enforcement of existing rules, and incremental supply gains.

For smaller owners: Expect predictable but constrained rent growth, higher compliance burden, and continued pressure on older stock maintenance. Her incumbency vulnerability (nearly 50% unfavorable ratings post-wildfire) makes her path to a November win less certain than it once appeared.

Nithya Raman (Councilmember & Challenger)

Raman helped drive the recent RSO changes through council and describes herself as a Democratic Socialist who sees “significant alignment” with Bass on tenant protections. Her campaign leans YIMBY (“Yes in My Backyard”) on supply—promising to triple housing production by cutting red tape—while maintaining strong stabilization rules as a “bridge.” Don’t expect a meaningful rollback of tenant protections under Raman; the differences from Bass would likely be at the margins.

For Class B/C investors: Opportunity in potential zoning reforms for value-add plays but expect continued—or strengthened—rent stabilization and operational friction from tenant-first policies.

Spencer Pratt (Independent Challenger)

Pratt—yes, the reality TV personality from The Hills—lost his home in the 2025 Palisades Fire and turned that experience into a campaign launch. He’s running as a registered Republican in a nonpartisan race, and polling now consistently puts him in a competitive three-way contest, not a sideshow. He stands out for blunt criticism of overregulation and has made wildfire response the central dividing line of his campaign.

He hasn’t detailed RSO-specific reforms but rails against policies he says favor squatters over paying tenants, discourage investment, and slow development. His platform prioritizes aggressive enforcement (clearing encampments and occupied buildings to free up units), faster permitting (e.g., 60-day ADU approvals), and partnering with industry to build quicker. He sympathizes openly with mom-and-pop landlords squeezed by caps and protections.

A Pratt runoff—or eventual win—could signal a market-friendly reset: lighter touch on expanding controls, stronger eviction/occupancy enforcement, reduced bureaucracy, and emphasis on clearing non-paying occupations that plague smaller properties. This might stabilize or improve investor confidence in older stock, especially if it reduces vacancy loss from squats and speeds rehabs.

Scenario Planning for Your Class B/C Portfolio

Bass or Raman in the runoff (and eventually wins): Tighter NOI growth math continues. Focus on maximizing legal turnover, ancillary income (parking, storage, utilities where allowed), aggressive expense control, and Section 8 optimization. Valuations may stay pressured—underwrite conservatively and use RSO status as a due diligence edge when buying.

Pratt in the runoff (or wins in November): Potential tailwind for private owners. Better enforcement could lower bad-debt and turnover costs. Faster approvals might unlock value-add rehabs or ADUs. Investor sentiment on RSO assets could improve, narrowing cap-rate spreads. Still unlikely to unwind RSO wholesale—manage expectations accordingly.

Bottom line regardless of winner: Supply shortages persist. The mayor who best balances protections with actual building and enforcement wins long-term. Smaller owners win by adapting faster than institutions

Actionable Steps for Private Investors Right Now

1. Audit Your Portfolio: Confirm RSO status on every unit. Model 2026–2028 NOI under 3–4% caps vs. market rents. Calculate loss-to-lease for sales positioning.
2. Maximize Legal Revenue: Optimize turnover where vacancy decontrol applies. Audit expenses ruthlessly. Add compliant ancillaries.
3. Stress-Test for Both Runoff Scenarios: Run numbers for both “continued pressure” (Bass/Raman) and “regulatory relief” (Pratt) outcomes. Build in buffers for compliance and relocation costs.
4. Position for Transactions: In a softening RSO market, strong operators can buy at discounts. Get estoppels early and highlight operational upside to buyers.
5. Engage Locally—and Stay Engaged Through November: June 2 isn’t the finish line. Track the runoff, stay informed on post-election policy shifts, and maintain relationships with brokers who know the private investor space.

June 2 won’t rewrite the RSO overnight—and with a runoff almost certain, neither will November. But the next four years will be shaped by who ends up in that office, and the policy trajectory for pre-1978 multifamily is very much in play. For private investors in smaller Class B and C assets, adaptability and strong operations have always been the edge—under any administration.

If you’re holding, buying, or selling LA multifamily, let’s talk this week—before the primary closes and the runoff math becomes clearer. My team specializes in navigating exactly these dynamics for hands-on owners like you. Reach out for a no-obligation portfolio review or market comps.

Contact

Hugh Hoang

[email protected]

310.935.0540