La Jolla renters saw their ceiling on annual rent increases fall on Saturday, Aug. 1, when California's statewide cap dropped in the San Diego region for the first time since the tenant protection law took effect.

Under Assembly Bill 1482, landlords in the San Diego-Carlsbad area can now raise rent by no more than 8.2% over any 12-month period, down from 8.8% last year. The cap runs through July 31, 2027.

San Diego is the exception. It is the only metro area in California where the allowable increase fell year over year, according to the California Attorney General's office. For comparison, San Francisco's cap is 8.8%, Los Angeles sits at 8.7% and Riverside at 8.1%.

The 8.2% figure comes from the law's formula: 5% plus local inflation. The San Diego-Carlsbad Consumer Price Index rose 3.2% in the March 2026 measurement, according to the California Department of Industrial Relations. That's the number the state plugs in each spring to set the following August's ceiling.

It's also the lowest the San Diego cap has been in years. In prior cycles, the limit was 8.6% and, before that, 10%, inewsource reported.

In dollar terms, the San Diego-Chula Vista-Carlsbad metro area has a median rent of $3,360 per month, the third-highest among large U.S. metros, according to 2026 HUD data analyzed by Construction Coverage. An 8.2% increase on that figure would mean roughly $276 more per month.

Why San Diego's cap fell

Steven Greenhut, director of the Pacific Research Institute's Free Cities Center, pointed to a surge in construction.

"The answer is to build more housing and to make it easier to build housing," Greenhut told The Center Square on Aug. 15. "San Diego has seen a building boom, and that's how you reduce rents, through competition and increasing the supply."

The numbers back him up. Southern California housing permits hit a near-19-year high in the 12 months ending in March 2026, with 59,900 approved, according to an Orange County Register analysis of Census Bureau data. Multifamily permits ran 19% above the 2021–2025 average.

Closer to home, San Diego County's accessory dwelling unit permits more than tripled between 2020 and 2024, with completions up 247%, according to a Reason.org analysis citing UC San Diego data.

Who's exempt

Not every La Jolla rental is covered. Housing built within the last 15 years is exempt, as are owner-occupied duplexes. Single-family homes and condos are also exempt if they are not owned by corporations and tenants have received a written exemption notice.

The cap does apply to most rental housing older than 15 years, including units rented by Section 8 voucher holders, according to Attorney General Rob Bonta's office. The City of San Diego has no separate local rent stabilization ordinance beyond the state law.

Landlords must provide at least 30 days' written notice before raising rent. Notices can be delivered in person, posted on the door or sent by mail. To check whether a proposed increase exceeds the cap, tenants can subtract their current rent from the new amount and divide by the current rent. A jump from $2,150 to $2,300, for example, works out to about 7%, which is within the limit.

The next adjustment will be calculated in March 2027 and take effect in August 2027.