Law to Charge Landlords Interest on Deposits OKd

The Los Angeles City Council on Tuesday gave final approval to an ordinance that would require most landlords to pay 5% annual interest on security deposits.

The council approved the long-debated ordinance in a 9-1 vote, and at the same time rescinded an earlier plan to bar landlords from increasing security deposits to match rent hikes. The action was a compromise in a tug-of-war between landlord and tenant groups.

Councilman Ernani Bernardi voted against the measure.

The council also gave tentative approval Tuesday to an ordinance that would bar landlords from increasing rent if a minor child of the tenant moves into the unit. The ordinance would permit a rent increase of up to 10% for an additional adult and would bar evictions for the addition of one child and one adult to a unit.

Both actions apply only to the 480,000 housing units that fall under the city’s rent control law. About 40% of the city’s apartment units are not covered.