Can You Raise Rent After Renovations in Los Angeles? Complete Guide for 2025

Los Angeles landlords frequently wonder whether property renovations justify rent increases. The answer isn't straightforward—strict rent control laws mean most improvements won't allow higher rents, even after significant investments.

Understanding Los Angeles Rent Control Laws

The Rent Stabilization Ordinance (RSO) governs approximately 640,000 rental units built before October 1978 in Los Angeles. This comprehensive rent control system strictly limits when and how much landlords can increase rent, regardless of property improvements or market conditions.

For the period from July 2025 through June 2026, the maximum allowable rent increase is 3% annually. Landlords who pay tenant utilities (gas or electricity) can add an additional 1%, bringing the total to 4%. These increases apply whether you've renovated or not.

Capital Improvements: The Only Path to Additional Rent Increases

Under the RSO, only capital improvements can justify rent increases beyond the annual limit. Capital improvements are major, permanent upgrades that extend the property's useful life or significantly enhance its value.

Qualifying Capital Improvements Include:

• Complete roof replacement

• New plumbing or electrical systems

• Seismic retrofitting and structural improvements

• HVAC system installation or replacement

• New windows throughout the building

• Foundation repairs or upgrades

The Application Process

Landlords cannot unilaterally decide what qualifies as a capital improvement. You must:

1. Apply to LAHD (Los Angeles Housing Department) before starting work

2. Provide detailed cost estimates from licensed contractors

3. Submit all receipts and proof of completion

4. Wait for official approval before implementing any rent increase

The approval process typically takes 60-90 days, and LAHD calculates the allowable increase based on the improvement's cost amortized over its useful life.

What Renovations Don't Qualify for Rent Increases

Many common renovations that landlords assume justify higher rent are specifically excluded under Los Angeles rent control:

Cosmetic Updates

• Interior and exterior painting

• New countertops or cabinets

• Flooring replacement (hardwood, carpet, tile)

• Light fixture updates

• Bathroom or kitchen remodeling that doesn't involve major systems

Routine Maintenance and Repairs

• Appliance replacement (refrigerators, washers, dryers)

• Landscaping improvements

• Patching walls or fixing minor damages

• Regular maintenance items

• Tenant improvement allowances

These improvements are considered normal landlord responsibilities for maintaining habitable conditions and don't entitle you to charge higher rent.

Properties Outside RSO Coverage: State Rent Control Laws

Not all Los Angeles properties fall under the RSO. Newer buildings (constructed after October 1978), single-family homes, and condos may be subject to California's Tenant Protection Act (AB 1482) instead.

Under AB 1482, annual rent increases are capped at 5% plus the Consumer Price Index (CPI), with a maximum of 10%. Like the RSO, these limits apply regardless of renovations or improvements made to the property.

Vacant Unit Rent Increases vs. Occupied Units

The rules differ significantly between vacant and occupied units:

Occupied Units

RSO-covered properties can only increase rent by the annual limit plus approved capital improvements. You cannot raise rent simply because you've renovated while tenants are in place.

Vacant Units

When RSO units become vacant, landlords can increase rent to market rate before new tenants move in. This "vacancy decontrol" allows you to recoup renovation costs through higher starting rents for new tenancies.

Strategic Timing for Property Improvements

Smart landlords time renovations strategically:

Between Tenancies: Complete major renovations during vacancy periods to justify higher rents for incoming tenants without RSO restrictions.

During Tenancies: Focus on capital improvements that qualify for LAHD approval, ensuring you follow proper procedures and documentation.

Documentation and Compliance Requirements

Successful rent increases require meticulous record-keeping:

• Maintain all contractor estimates and final invoices

• Photograph before, during, and after renovation work

• Keep permits and inspection certificates

• Document all communication with LAHD

• Preserve tenant notifications and legal notices

Common Landlord Mistakes to Avoid

Many Los Angeles landlords make costly errors when attempting rent increases:

1. Assuming renovations automatically justify higher rent

2. Failing to apply for LAHD approval before starting work

3. Mixing capital improvements with routine maintenance

4. Not properly documenting improvement costs

5. Attempting unauthorized rent increases

Violations can result in significant penalties, forced rent reductions, and tenant lawsuits.

Frequently Asked Questions

Q: Can I raise rent if I renovate between tenants? A: For RSO properties, you can set market-rate rent for new tenants regardless of renovations. For non-RSO properties, AB 1482 limits still apply.

Q: How much can capital improvements increase my rent? A: LAHD calculates increases based on improvement costs amortized over the improvement's useful life, typically 5-15 years depending on the upgrade type.

Q: What if my tenant requests improvements? A: Tenant-requested improvements don't automatically qualify for rent increases. The same RSO rules apply.

Maximizing Your Investment Within Legal Limits

While rent control limits immediate returns on renovations, strategic improvements still offer value:

• Enhanced property value for eventual sale

• Reduced vacancy periods with attractive, updated units

• Lower maintenance costs through quality upgrades

• Improved tenant satisfaction and retention

Understanding these regulations protects you from violations while helping you make informed investment decisions about your Los Angeles rental property.

About the Author

Justin Borges is the Team Leader of The Borges Real Estate Team at eXp Realty , one of the best real estate teams in Los Angeles County, with over a decade of experience and more than $200 million in closed sales. Known for his advisor-first approach, Justin specializes in helping landlords, homeowners, and investors navigate complex issues like rent control, tenant rights, and probate real estate.