Are you recovering costs on CAPITAL IMPROVEMENTS?
The Capital Improvement Program allows landlords to recover 50% of approvable expenses by distributing costs between themselves and tenants who benefit from the improvement.
According to the Los Angeles Municipal Code (LAMC 151.02.C), qualifying improvements can include exterior painting, landscaping, flooring, fixtures, and more. However, to qualify, these improvements must meet the following criteria:
- The improvement must primarily benefit the tenants.
- Regular repairs or maintenance do not qualify.
- The improvement must have a lifespan of five years or more.
- The upgrade must be relatively immobile or affixed in place.
- The improvement must be finished within 12 months of the application filing date.
💡 Pro tip:
To ease the process, landlords are encouraged to get the Capital Improvement Cost Recovery Application Packet before starting any projects. This packet includes planning guides, sample applications, and important regulatory details.
For example, an exterior painting project costing $25,000 for a 24-unit building could result in a temporary rent surcharge of $8.68 per unit per month over 72 months.
📩 Visit the official LA Housing Department website for more information and resources.
As the rental market evolves, staying informed about trends and averages can help you make smarter decisions. Here’s a snapshot of where Los Angeles rents stand as we kick off the year:
- Studio: $1,691/MONTH
- 1-Bedroom: $2,159/MONTH
- 2-Bedroom: $2,971/MONTH
- 3-Bedroom: $4,233/MONTH OR MORE
Market Trends
Average rents have dropped 2.84% year-over-year, saving tenants approximately $88 per month.
Why the Drop?
- Delayed construction projects from earlier in the pandemic are now completed, increasing housing supply.
- Fewer people are moving into new homes due to lifestyle changes.
- The remote work shift has reduced housing demand in urban centers.
Keep an eye on these changes as they continue to shape the rental market.
