On Wilshire Boulevard stands a classic Art Deco department store whose main entrance doesn't face the boulevard. It faces the parking area in back.

This is the third post in my "LA Street-Corner Real Estate History" series. Starting from this building, I want to talk about the logic behind how Los Angeles was designed, and about something anyone buying an older apartment building nearby needs to understand first: LA's rent stabilization rules (RSO).

1929: a department store designed for drivers

Bullocks Wilshire opened in 1929 and is considered one of the first department stores designed specifically for customers arriving by car. Its main entrance was at the rear motor court: shoppers drove in, stepped out of the car, and walked straight into the store.

The department store closed in 1993. Today the building is a campus of Southwestern Law School, and its exterior remains one of LA's signature Art Deco landmarks.

Los Angeles was built for the car

A department store that turns its front door toward the parking lot tells you something: Los Angeles is a city designed around the automobile.

That logic shaped the housing nearby too. The Koreatown area around Bullocks Wilshire has a lot of older apartment buildings, and parking is often one of the first things renters ask about. How a city is designed shapes how its buildings are used.

Buying an older apartment building? Learn the RSO first

If you're thinking about buying an older apartment building in the City of Los Angeles as a rental, you need to understand the city's Rent Stabilization Ordinance (RSO). According to the Los Angeles Housing Department (LAHD), as of September 2026:

  • Coverage: Generally, rental properties with a certificate of occupancy issued before October 1, 1978 are covered (there are many exceptions, including some condos and single-family homes, so confirm each case)
  • Frequency: Rent can be increased only once every 12 months
  • Amount: Set by the city. Under LA's new formula, starting February 2, 2026, the allowable annual increase has a floor of 1% and a ceiling of 4%, and the former utility add-ons have been eliminated
  • Regaining possession: Requires a legally permitted reason, and in some cases landlords must pay tenant relocation assistance

Rules can change. Check LAHD's current announcement for the allowable increase, or use LAHD's RSO rent increase calculator.

Where out-of-town investors often get the math wrong

The most common mistake when evaluating returns on an older RSO building is calculating with market rents.

If current tenants have lived there for years, their rents may be well below market, and the RSO limits how quickly you can raise them and when you can regain possession. So your return calculations should use:

  • Actual rents under existing leases
  • The increases the RSO allows
  • Realistic operating costs (repairs, insurance, management, property tax, and so on)

As a hypothetical example, suppose a unit currently rents for $1,500 and market rent might be $2,200. If you run your numbers at $2,200, you'll overestimate your return. Under the RSO, annual increases are capped, so that gap could take many years to close, or it may never close.

Checklist before buying an RSO property

  • [ ] Confirm whether the property is subject to the RSO (check its registration status with LAHD)
  • [ ] Get all current leases, rent history, and security deposit records
  • [ ] Confirm that past rent increases complied with the rules
  • [ ] Find out whether any tenant disputes or complaints are pending
  • [ ] Recalculate returns using current rents and RSO-allowed increases
  • [ ] Consult an attorney familiar with LA rental law if needed

One building, a whole city

Bullocks Wilshire reminds us that a city's design shapes how its buildings are used. The RSO reminds investors that you're not just buying a building. You're buying the leases and the rules that come with it.

Looking at rental properties in LA?

If you're considering an older apartment building in Koreatown or elsewhere in Los Angeles, reach out. I can help you sort through the leases, RSO status, and return calculations together.

Sources

Wynn Hung | CA DRE #02249826 | eXp Realty

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