LA Rent Restrictions One Step Closer to Ending; Recovery Likely a 2027 Story

Research evidence excerpt

LA Rent Restrictions One Step Closer to Ending; Recovery Likely a 2027 Story

Equity Research

Flash Comment — May 20, 2026

Self Storage REITs

LA Rent Restrictions One Step Closer to

Ending; Recovery Likely a 2027 Story

Local Government Could Still Extend Restrictions Ahead of

June Expiration

Our Call Eric Luebchow, CFA

Higher likelihood of LA rent restrictions ending is a tailwind, but some regulatory risk Equity Analyst | Wells Fargo Securities, LLC

Eric.Luebchow@wellsfargo.com | 312-630-2386

remains. FY26 upside is likely limited, with core recovery in 2027. We remain cautious on

James Feldmanstorage NT given weak demand backdrop and limited positive catalysts.

Equity Analyst | Wells Fargo Securities, LLC

James.Feldman@wellsfargo.com | 212-214-5328

Initial Thoughts Caleb Stein

LA County To Let Fire-Related Rent Caps Expire; But Some Regulatory Risk Remains. Caleb.Stein@wellsfargo.com | 704-410-1823

LA County will not extend Penal Code 396 protections tied to the 2025 fires (expiring Jackson Armstrong

next week). However, separate emergency rent limits from late-2025 winter storms in LA Equity Analyst | Wells Fargo Securities, LLC

and San Diego run through June 22 and local administrators could still choose to extend Jack.Armstrong@wellsfargo.com | 212-214-8022

either set of restrictions. We now expect both to lapse, but uncertainty remains into mid-

June, especially with the LA mayoral election on June 2nd.

Deferred Growth Primarily A 2027 Story Given Notice Periods & ECRI Ramp. Even if

rent restrictions roll off in June, a 30-day notice period pushes the first increases into late

July. Additionally, it is our sense that ECRIs will be gradual, and flow through over the next

18 months rather than come all at once, which could spark political backlash.