We are pleased to announce our completion of the renovation of a five unit apartment building, nestled in Northeast Los Angeles. The neighborhood is located in Highland Park, and is known for its beautiful views and as an up-and-coming destination for millennials. This property demonstrates PMI’s Creative Multifamily Strategy. The location is easy walking distance to the Goldline Metro Station and retail amenities on Figueroa.
Creative Multifamily is a new line of small, low-rise apartments that are stylish, contemporary, and playful, but yet; still affordable. The complex retains the flavor of its era, but incorporates a totally redesigned interior. Residents at properties like this are typically young and well-educated, and appreciate being located within walking distance of several diverse cultural amenities. In this area, a thrift shop with character is as popular as a high end boutique.
We completely gutted the property, allowing us to build this older apartment from the ground up into a contemporary modern gem. The townhouse units have bright and clean streamlined features, modern appliances, amenities, and lovely patios. Energy efficient stained and polished concrete floors in the living room and kitchen, hardwood floors in the hallways and bedrooms, and pristine marble flooring in the bathroom were added with the tenant’s comfort and style in mind. Below, see some of our updates. Here is the before picture of the older popcorn ceilings, wall heater, and carpeted 1970s apartment.
We scraped the ceiling, removed the carpet, and polished the concrete slab to create an industrial, creative look to the living.
Before bedroom is below:
After bedroom is below
Here is your old galley kitchen below
The new kitchen features a modern stainless steel hood, new appliances, cabinets, and polished concrete floors. and now a sliding glass door leading to the patio.
We took a 1920s low income apartment complex and removed the plaster to expose the joists and wood ceiling. With other modern features, the apartment is transformed into a creative look:
The Los Angeles City Council passed the first reading of the new law requiring soft story apartments to be seismically upgraded. Soft stories are wood frame apartments, usually built between 1950 and 1978, and have open parking on the ground floor level. A structural engineer must determine if the building has a soft story. The LA Times estimated that the retrofit will cost approximately $5,000 per unit. The City Council is working on methods to help small landlords finance the retrofit but at this point, there is no such financing. The Governor just vetoed a bill that the California State Legislature passed providing a 30% tax credit for earthquake retrofit expenditures. Currently, a landlord may be permitted to raise a rent controlled tenant’s rent up to $75 per month (or 10% of the monthly rent, whichever is less) for capital improvements until they are paid. The increase is subject to review and approval by the City. It is not easily obtained. Further, tenant groups are pressuring to have the maximum rent increase limited to 50% of the retrofit cost with the maximum increase of $38 per month.
In about a month, the Los Angeles Department of Building and Safety will begin issuing courtesy letters to the owners of 13,500 wood apartment buildings warning of an upcoming order from the city to do a seismic retrofit. City officials have spent the last year canvassing the city to compile a list of quake-vulnerable apartments.
The official order letters will be sent on a rolling basis, with building officials focusing on the largest apartment buildings first.
Landlords have one year from the notice to either have an engineer provide proof that the building is not a soft story or to have an engineer complete retrofit plans. The Landlord will have an additional year to obtain a building permit. All improvements must be completed seven years from receipt of the official order. The Landlord must inform all tenants that the building is a soft story after the building is so determined to be a soft story.
If the Landlord does not comply, he shall be guilty of a misdemeanor, and shall be subject to prosecution and/or administrative enforcement under the Los Angeles Municipal Code.
Marcus and Millichap in their 3rd quarter 2015 Los Angeles apartment market report forecast 8,600 unit completions this year. Of those completions, M & M forecasts 4,400 unit completions in the Downtown area. That means over half of all new apartment units will be built in Downtown Los Angeles. Downtown is now the fastest growing residential market in LA and this trend is going to continue. Why is this happening? Billions of dollars have been invested in Downtown infrastructure and amenities including museums, parks, transits, and entertainment venues. A higher income residential cluster has formed to transform Downtown. Also, downtown is one of the easiest and most zoning friendly areas in the City to build. Developers can build density without lawsuits and homeowner fights. At some point, maybe these new residents will push back.
In the short run, at some point, this expansion may lead to overbuilding. M & M forcasts an increase in vacancy over the next few years. But in 2015, M & M is only forecasting a 10 basis point increase in vacancy to 3.7%. In the long run, this expansion will continue to transform Downtown into a popular and upscale neighborhood. This trend will also help transform many adjacent Northeast neighborhoods.