Legal Question in Landlord & Tenant Law in California

You do not say, but I assume the neighbors are also tenants of your landlord. If you hold back on paying rent the landlord will evict you. Your only defense is that the value of the living quarter has gone down to nearly zero because of the lack of quiet enjoyment, but a judge will assume there is some rental value as you did live there. Call the police. Do you know if the landlord has attempted to get the neighbors to be more quiet? Perhaps they just refuse; tell the landlord that if they do not settle down you probably will have to move, so either way he is going to loss a tenant and since you are a better tenant than the others he should evict them.

There is a basic rule of contract law that applies to rentals - even if the other party breaches their obligations, you must continue to perform your obligations in order to be able to enforce your rights. With residential rental property, there are a few exceptions but only when the property has conditions that make it legally uninhabitable. What you have is a breach of the covenant of quiet enjoyment, not an unhabitable property (legal uninhabitable is not the same as no one can stand to live there because of the noise). If the landlord refuses to do anything, you have a right to sue him for breach of the implied covenant of quiet enjoyment, and them for nuisance. But you still have to pay your rent to preserve those rights.