What’s Happening in Montebello? Major Changes Landlords Need to Know (2026 Update)

The City of Montebello is going through a noticeable shift and if you own apartment buildings here, you’re going to feel it. With new leadership at the City Council level and policy changes already taking effect, we’re seeing a clear push toward increased revenue generation and one of the biggest impacts is hitting apartment owners directly.

A New Direction at City Hall

Over the past few months, Montebello has welcomed a new City Council member who is already influencing policy decisions and priorities.

While change at the city level isn’t unusual, what is significant is the direction:

• A focus on “full cost recovery” for city services
• A shift toward increased fees and taxes
• A stronger emphasis on funding public services through local revenue sources
• 
  

This is where landlords, and especially apartment owners, come into the picture.

Business License Fees Just Changed (Effective Feb 1, 2026)

As of February 1, 2026, the City officially implemented new business license tax amounts, following City Council approval in late 2025.

For apartment owners, this is one of the most impactful changes we’ve seen in years.

What’s Different?

• Fees are now being applied more aggressively on a per-unit basis
• Many owners are reporting costs averaging around $171+ per unit annually
• Larger properties are seeing significant jumps in operating expenses overnight
• 
  

👉 Example: A 20-unit building could now be looking at $3,400+ annually just in business license fees.

Why the Increase? The City’s Position

The City is positioning these increases as necessary to support essential services, including:

• Police departments
• Fire services
• General city operations
• 
  

This aligns with a broader “full cost recovery” model which means the City aims to pass the true cost of services directly onto businesses and property owners.

Why Apartment Owners Are Hit the Hardest

Unlike other businesses, apartment owners:

• Are charged per unit (not per business)
• Cannot easily absorb rising costs without impacting operations
• Already operate under state rent control constraints like AB 1482

Under AB 1482, rent increases are capped annually (typically 5% + CPI, up to 10% max)

➡️ That means: You can’t simply pass these new costs onto tenants freely.

The Bigger Picture: What This Means for Investors

This isn’t just about one fee, it's about a shit that is coming.

1. Rising Operating Costs

Expect:

• Increased annual expenses
• Lower net operating income (NOI)
• Downward pressure on property values (if rents can’t keep up)
• 
  

2. More Cities May Follow

Montebello could become a case study for nearby cities looking to:

• Close budget gaps
• Shift costs onto landlords
• Expand fee-based revenue models
• 
  

3. Investment Strategy Needs to Adjust

Now more than ever, investors need to:

• Underwrite deals with higher expense assumptions
• Re-evaluate cash flow projections
• Focus on value-add opportunities to offset rising costs
• 
  

Final Thoughts: Stay Ahead of the Curve

Montebello is changing and it is changing quickly.



For landlords, this is a reminder that:

• Local policy matters just as much as market fundamentals
• City-level decisions can directly impact your bottom line
• Staying informed is no longer optional—it’s critical
• 
  

Need Help Navigating These Changes?

If you own property in Montebello (or are considering investing), now is the time to re-evaluate your strategy.

📩 Send an email to Shant Sherbetdjian at ss@remaxcir.com
📲 DM us @socalaptgroup on Instagram
📞 Text our Landlord Hotline at 626-650-957

📞 Text our Landlord Hotline at 626-657-8150

We’re actively tracking these changes and helping our clients stay ahead—not behind.

Shant Sherbetdjian

Realtor/Apartment Specialist
Southern California Apartment Group