On October 16, 2025, the Berkeley Rent Stabilization Board adopted RSB Item 8E, setting the 2026 Annual General Adjustment for rent-controlled units in Berkeley at 1.0% for the calendar year January 1, 2026 through December 31, 2026. That single percentage point is the lowest allowable rent-increase figure in the entire RentCeiling jurisdiction catalogue — below San Francisco's 1.6% (Rent Year 2026-27), well below California's statewide AB 1482 cap of 8.8%, and below every other rent-controlled jurisdiction we model. If you own a covered Berkeley unit, this is the smallest legal increase you've been allowed to take in a long time. If you own one of the units the law denies the AGA to, you can't even take that.
This post walks the math behind the 1.0% figure, explains why the four-condition AGA-denial gate at Berkeley Municipal Code §13.76.110(B)(2) makes a covered Berkeley unit different from a covered unit in any other jurisdiction we cover, surfaces the eligibility-deferral rule at §13.76.110(B)(1) that catches landlords with tenancies that started in 2025, and contrasts Berkeley's rent-ceiling-accumulation banking model with the stacked-banking-with-ceilings approach used in San Francisco. By the end you should be able to look at any covered Berkeley unit, say what its 2026 lawful rent ceiling is, and decide whether it makes sense to serve a notice this year at all.
The math: 65 percent of one CPI reading
Berkeley's annual cap is set by Rent Board Regulation 1271. The formula is one line:
Take the percentage change in the BLS Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland-Hayward, CA metropolitan statistical area, all items, not seasonally adjusted, from July of the prior calendar year to June of the publication year. Multiply by sixty-five percent (65%). Round to the nearest tenth of a percent.
For the 2026 AGA the inputs were:
- BLS CPI-U SF-Oakland-Hayward, July 2024: approximately 354.8
- BLS CPI-U SF-Oakland-Hayward, June 2025: approximately 360.1
- Year-over-year change: approximately 1.5%
- 1.5% × 65% = 0.975%
- Rounded to nearest tenth: 1.0%
That's it. There is no smoothing, no floor, no statutory ceiling distinct from the formula itself, no discretionary adjustment. The Board passes the order before June 30; the percentage takes effect the following January 1 and applies for that calendar year. The 2025 AGA was 1.6%, also derived from this formula against the July 2023–June 2024 CPI reading of approximately 2.5%.
Why 1.0% is the lowest cap in the country (that we cover)
A natural reaction is “65% of CPI sounds like a smaller multiplier than other formulas, so of course it's the lowest.” But the multiplier alone doesn't explain it. San Francisco's rent ordinance uses 60% of CPI — lower than Berkeley's 65% — and SF's 2026-27 cap is 1.6%. The reason Berkeley still ends up below SF is the anchor period for the CPI reading.
- Berkeley: July–to–June, ending June of the publication year. For the 2026 AGA, the anchor was July 2024 – June 2025: 1.5% CPI growth.
- San Francisco: March–to–March, ending March of the publication year. For the 2026-27 cap, the anchor was March 2024 – March 2025, which captured a higher inflation reading of approximately 2.7% — tax season is later in the SF window than in Berkeley's.
Run the math: SF's 60% × 2.7% = 1.62%, rounded down to 1.6%. Berkeley's 65% × 1.5% = 0.975%, rounded up to 1.0%. The lower SF multiplier is more than offset by the higher SF CPI reading. This is also why the same metro area can produce two materially different caps: in a year where inflation rises rapidly through the spring, SF's later anchor catches more of the rise; in a year where inflation cools sharply through the spring, Berkeley's earlier-ending anchor smooths it.
Compared against the other eight jurisdictions in our side-by-side table, the picture is:
- Berkeley: 1.0% (CY 2026)
- San Francisco: 1.6% (RY 2026-27, March 1 reset)
- Saint Paul, MN: 3.0% statutory floor under the City Charter
- New York City: 2.75% on a 1-year RSL renewal, 5.25% on 2-year (RGB Order 56)
- Oregon: 10.0% statutory ceiling capping CPI+7% (the lower binds)
- Montgomery County, MD: 5.8% (RY 2025-26 VRGA)
- Los Angeles RSO: 4.0% standard, 5.0% for landlord-paid utilities
- Washington DC: CPI-W +2% (standard), or CPI-W (elderly/disabled), capped 10%/5%
- Washington State: 9.683% residential (CPI+7%, 10% ceiling), 5% manufactured
- California (statewide AB 1482): 8.8% (statewide 2026 cap)
Berkeley's 1.0% is alone at the bottom. The next-lowest is SF's 1.6% — sixty percent higher than Berkeley's. For a covered $2,400 Berkeley unit, the AGA increase is $24/month. The same unit a few miles south in SF would face a $38/month maximum, and across town under AB 1482 it could be $211/month.
The four-condition AGA-denial gate at BMC §13.76.110(B)(2)
Here is where Berkeley diverges from every other rent-cap jurisdiction we cover. In Berkeley, the cap on a covered unit is conditional. BMC §13.76.110(B)(2) lists four conditions under which a landlord may not impose the AGA increase — even though the unit is otherwise covered, even though the percentage has been duly published, even though every other jurisdiction's analysis would say the increase is lawful:
- Registration not current. The unit must be registered with the Berkeley Rent Stabilization Board on a current basis, including filing of the annual rent-roll registration form. The Board flags units it believes are non-current via the Apparent Lawful Rent Ceiling Notice. The cure is to file the registration form, pay the annual unit fee (~$280 per unit at the 2026 fee schedule), and bring the historical filings up to date.
- Outstanding Rent Board orders. If the Board has issued a final order against the landlord — an Individual Rent Adjustment denial, a wrongful-increase rollback, an arrears assessment, a habitability-related decision — and the landlord has not complied with that order, the AGA is denied. The cure is to comply with the order, which generally means refunding overcharges and rolling back rent.
- Substantiated habitability violations. If the unit has health, safety, or building-code violations on file with the City of Berkeley Housing Code Enforcement that have not been cured by the AGA effective date, the AGA is denied. This pulls Cal. Civ. Code §1941.1 (the state warranty of habitability) directly into the rent-cap analysis. The cure is to remedy the violation and obtain a written closure from the Code Enforcement officer.
- Annual security-deposit interest unpaid. Berkeley landlords must pay annual interest on tenant security deposits per BMC §13.76.080. If the interest payment is in arrears at the AGA effective date, the increase is denied. The cure is to remit the back interest to the tenant in writing and document the payment.
Any one of these conditions blocks the increase entirely. The lawful effective cap drops from 1.0% to 0% for that calendar year on that unit. There is no partial denial. There is no reduction. There is no “you may impose 0.5% because you only have one out of four problems.”
This is structurally unique in the catalogue. Every other jurisdiction we cover treats the cap as unconditional within the coverage analysis — if you're in scope, you get the cap, full stop, whether or not your registration is current or your habitability is clean. Washington DC attaches registration to the right to file at the Rental Accommodations Division but doesn't conditionally deny the CPI-W cap on a unit-by-unit basis the way Berkeley does. Montgomery County's Chapter 29 Article VII requires a current DHCA license but doesn't tie the VRGA itself to license status. The Berkeley structure is genuinely unusual: the Rent Board is using cap-eligibility as the lever to enforce four other compliance regimes (registration, board orders, habitability, deposit interest) all at once.
The eligibility-deferral trap at §13.76.110(B)(1)
Layered on top of the four-condition denial gate is a second restriction that catches landlords the gate wouldn't: the eligibility-deferral rule at BMC §13.76.110(B)(1). It says that any AGA may be imposed only on tenancies that began before that AGA's CPI reference year began.
Concretely: the 2026 AGA is computed against the July 2024 – June 2025 CPI window. The reference year for the 2026 AGA is calendar 2025. If a tenancy at a covered Berkeley unit commenced any time during 2025 — January 1, 2025 through December 31, 2025 — that tenancy is deferred from the 2026 AGA. The increase becomes available only on the FOLLOWING January 1, which is January 1, 2027. A 2025-tenancy at a covered Berkeley unit waits two calendar-year cycles before it sees its first lawful rent increase under the AGA.
The cure path is just patience. There is no “cure by paying a back fee” like the registration prong of the denial gate. The deferred unit gets the next year's AGA when the next year arrives. RentCeiling's Berkeley draft-notice form computes the next-eligible January 1 from the lease start date and surfaces it as a red callout when the picker indicates a deferred tenancy.
Berkeley's banking model: rent-ceiling accumulation, no stacking ceiling
The third Berkeley quirk landlords hit is banking. Most rent-cap jurisdictions handle the “I skipped last year, can I take it now” question with a simple no — one increase per twelve months, period, no carry-forward. Two of the ten jurisdictions we cover allow some form of banking: Oregon ORS 90.323 permits intra-tenancy banking subject to the 12-month rule, San Francisco permits stacked banking under SF Rent Board Rules §4.12, and Berkeley uses what we call rent-ceiling accumulation.
Under BMC §13.76.110(B), the lawful rent ceiling for each covered unit automatically rises by the AGA each January 1, regardless of whether the landlord applies the increase to the actual rent collected. If a landlord skipped:
- 2024 (5.0% AGA, the highest in recent Berkeley history)
- 2025 (1.6% AGA)
- 2026 (1.0% AGA)
...the rent ceiling has nonetheless risen by approximately 7.7% on a multiplicative basis from the January 1, 2024 baseline. The landlord may issue a single notice in 2026 that brings the actual rent up to that accumulated ceiling, subject to three constraints: (a) the once-per-12-months rule under §13.76.110(C), (b) Cal. Civ. Code §827(b)'s 30-day notice for increases under 10% or 90-day notice for 10%-or-greater increases, and (c) the unit must be registered and current with the Rent Board.
Crucially, there is no Berkeley equivalent of the SF stacking ceilings. San Francisco caps any single banked notice at 7% per Rent Year of cumulative increase and 10% per single notice across all years. Berkeley has neither cap — the math is whatever the rent-ceiling history says it is. If a landlord skipped seven straight years and the cumulative AGA stack is 12.4%, the landlord may move the rent 12.4% in one notice, provided that notice serves a 90-day window because the increase is over 10%, and provided every other condition is met. The Berkeley Rent Board's AGA Calculator at rentboard.berkeleyca.gov computes this for any unit by Apparent Lawful Rent Ceiling on file.
What this means in practice
If you own one or more covered Berkeley units, the 2026 cycle is the smallest you'll have on the books in years. Here is the practical sequence:
- Audit your registration status before you serve. Pull each unit's most recent Apparent Lawful Rent Ceiling Notice from the Berkeley Rent Board. If anything is non-current, file the registration form and pay the unit fee before drafting the notice. If you serve a notice on an unregistered unit, you risk an overcharge finding under BMC §13.76.150 with treble damages and attorney fees.
- Check your tenancy start dates. Any tenancy that commenced in calendar 2025 is deferred from the 2026 AGA under §13.76.110(B)(1). The increase is available January 1, 2027. Don't serve it now — the notice will be void and the rent collected over base will be unlawful from the first month.
- Compare the cap math against the accumulated ceiling. If you skipped the 2024 or 2025 AGAs, your lawful ceiling is materially above the current rent. The 2026 increase you're entitled to is not 1.0% — it's whatever the cumulative gap is, subject to a 90-day notice if it crosses 10%. Use the Berkeley Rent Board's AGA Calculator or our Berkeley draft-notice form for the per-unit math.
- Pay the deposit interest. If you're in arrears on the BMC §13.76.080 annual deposit interest, remit it before the AGA effective date. This is a single-condition prong of the denial gate that's almost trivial to cure but routinely ignored.
- Document habitability closures. Any open Berkeley Housing Code Enforcement file on the unit must be closed before the AGA effective date. Get the written closure letter from the inspector. Keep it with the rent file in case the tenant petitions for a wrongful-increase determination.
- Consider whether to serve at all. A 1.0% increase on a $2,400/month unit is $24/month. If you have a tenant in good standing, the math on retaining vs. losing them at vacancy turnover (where Costa-Hawkins applies and you can reset to market) will often dominate the $288/year of incremental revenue. We're not making that call for you, but we are making sure the math is visible.
A note on Costa-Hawkins exemption
Some Berkeley units are not covered by BMC Ch. 13.76 at all and instead fall under the higher AB 1482 statewide cap (8.8% for 2026). Under the Costa-Hawkins Rental Housing Act (Cal. Civ. Code §§ 1954.50–1954.535):
- Single-family homes are Costa-Hawkins exempt from the Berkeley cap if the current tenancy commenced on or after January 1, 1996 — not the more familiar June 13, 1979 multi-unit cutoff. A continuous pre-1996 tenancy in a Berkeley single-family home can still fall under price control.
- Condominiums are Costa-Hawkins exempt from the Berkeley cap if the unit was lawfully separable when sold to a bona fide purchaser.
- Multi-unit buildings are Costa-Hawkins exempt from the Berkeley cap if the building's first certificate of occupancy was issued AFTER February 1, 1995 — not the June 13, 1979 SF cutoff.
A unit that is Costa-Hawkins exempt from the Berkeley price-control regime may still owe registration fees and may still be subject to BMC §13.76.130 good-cause-eviction protections and BMC §13.79 anti-harassment rules. The price-control regime and the just-cause regime have overlapping but distinct scopes.
Closing thought
Berkeley's 1.0% cap is the cleanest proof in our catalogue that “the cap percentage” alone is a poor model for what a landlord can actually do. Behind the headline number sits a four-condition denial gate that pulls registration, board-order compliance, habitability, and deposit-interest payment into the same determination — and a tenancy-eligibility rule that defers a covered unit's first increase by up to a full year. The smallest cap in the country is genuinely the smallest, but only after you've passed all four gates.
The flip side: Berkeley landlords who keep their compliance current, their habitability clean, and their deposit interest paid have a uniquely transparent system. The Rent Board publishes the formula. The CPI reading is on the BLS site. The denial conditions are in the code section. Every output is auditable. A Berkeley unit done right is the easiest rent-control unit in California to defend if challenged.
If you want to run the math for a specific Berkeley unit — with the AGA-denial gate, the eligibility-deferral check, and the rent-ceiling accumulation worked through — the Berkeley draft-notice form on RentCeiling does it for free, with no sign-up required. The audit log of what we computed, against which rule version, is yours to keep.