Sterman Multifamily Group · Free Tool

How much does rent control cost you at sale?

Estimate the structural valuation discount rent control places on your building — the gap between what it would sell for free and what it sells for under RSO, AB 1482, or LA County RSTPO.

4.5% typical Koreatown/Hollywood
What a new tenant would pay

The discount

Rent control discount on sale value

Value if rents were market

NOI at market rents ÷ cap rate

Value at current rents

NOI at in-place rents ÷ cap rate
Projected rent in 5 years (under regime)
Structurally locked-in gap after 5 years
Difference between market rent growth and rent-control-capped growth over 5 years. Compounds permanently into your cap rate.

Rent control is not a temporary constraint. It compounds. Every year the gap between in-place and market rents widens, the value you cannot capture grows. That gap shows up as a discount on the sale price, whether you acknowledge it or not.

Michael Sterman, Marcus & Millichap. $1.41 billion across 254 closed transactions. For an actual read on your building's rent-control discount and whether it's capturable before sale — request a free evaluation.

Simplified model. Uses standard 35% operating expense ratio, assumes 3% annual market rent growth, and applies the regime's current annual cap. Does not model tenant turnover, vacancy decontrol events, or capital improvement pathways that may allow above-cap increases. Verify with your broker.