The notice is invalid
You can write a letter to the landlord to inform them that the rent increase attempt is illegal and advise your landlord to seek legal advise as to why. If they don’t rescind the notice, you can file a Rent Adjustment Program Petition to fight the rent increase. This petition will pause the rent increase and will start a process towards a hearing. During that hearing both the tenant and landlord can argue their case and present evidence. It sounds intimidating and it can be but you don’t need a lawyer and the Rent adjustment Program has lots of resources to help you through the process. You can reach them at (510) 238-3721.
You also have the right to continue paying the current rent (before the increase). However, your landlord may continue to pursue that invalid rent increase through a 3-day notice. If you receive a 3-day notice based on the increased amount, be ready to pay the increased amount, You may be able to get that money back if the Rent Adjustment Program (RAP) determines that the increase was illegal. It may be that the landlord is raising your rent above Consumer Price Index for other valid reasons but they would have to tell you why and potentially file with the Rent Adjustment Program before you pay it. If your landlord does not have a reason or you want to ensure the rent increase is valid, contacting the Rent Adjustment Program is your best bet. You can call: (510) 238-3721.
If the Landlord insists that you pay the rent increase, and you believe it is illegal you can complete a Rent Adjustment Program Petition within 90 days of receiving the rent increase notice or 120 days if your landlord did not include a RAP notice with your rent increase.