Justifications for Rent Increase Higher than the CPI Increase

Banking: Saving rent increases that are not given in one year and imposing them in subsequent years.

Capital Improvements: Seeking a rent increase based on improvements that materially add to the value of the property and appreciably prolong its useful life or adapt it to new building codes. These improvements must primarily benefit the tenant. Increases are divided among all units benefited by the improvement and are amortized (spread out) over five years. The increase expires at the end of 5 years.

Uninsured Repairs: An increase for work performed to secure compliance with any state or local law to repair damage from fire, earthquake, or other casualty or natural disaster to the extent the repairs are not reimbursed by insurance. These increases are allocated and amortized like capital improvements.

Debt Service Costs: An increase that allows an owner to collect rents sufficient to cover the combined housing service and debt service costs for a loan secured by the property to finance a purchase of the property or improvements in the property that directly benefits the tenants..

Increased Housing Service Costs: An increase that compares two years of operating expenses and allows for an increase in situations where there has been an increase in those costs.

Constitutional Fair Rate of Return: By law, owners must be allowed an increase that allows them to earn a fair rate of return on their investment.

NOTE: An owner may take the CPI Increase OR any combination of individual adjustments, but not both.