construction

Construction is where everything comes together and where everything can unravel if you haven’t prepared properly. The previous steps helped you plan, fund, select your building, engage your tenants, develop a scope, and choose a contractor. Now it’s time to build. But ‘just build’ undersells how much coordination this phase requires. 

You are managing contractors, tenants, incentive-program inspectors, LADWP, AQMD, and LADBS simultaneously, each with their own timeline, requirements, and expectations. One four-month occupied retrofit at ELACC required 36 separate inspections. That number isn't unusual; it's the nature of stacked incentive programs. What gets you through it is a clear process, defined roles, and documentation for everything.

Why Occupied Rehab Is Different

Most construction happens in empty space. Occupied rehabilitation is fundamentally different: you’re doing construction work in people’s homes, around people who are going about their lives. That changes how you schedule, how you communicate, how you manage your contractor, and how you protect the incentive funding that makes the project financially viable. Adalia Rodriguez, ELACC’s COO, frames it as three things you have to protect simultaneously:

Protect the Residents. Construction happens around them. People have lives, their routines don’t stop because your crew is in the hallway. The objective is to minimize disruption and, at the end of every single work day, restore essential services (water, power, heat) before anyone goes home.

Protect the Asset. Getting equipment specifications right is not a paperwork exercise; it’s a make-or-break decision. Deviating from approved equipment specs can cost you tens of thousands of dollars in lost incentives and turn a financially viable project into a problem. The full story is in the Equipment Specification Compliance section below.

Protect the Incentives. This isn’t a project with one inspector. You’re coordinating with incentive program implementers, LADWP, AQMD, and LADBS, each with its own inspection requirements and timeline. Missing a step or failing an inspection can delay reimbursements and put the whole financing structure under strain. 

Pre-Construction Planning

Here is a rule that sounds obvious, but gets skipped all the time: do your homework before you bid. Surprises discovered after a contractor is signed turn into change orders, and change orders turn into budget problems: lost incentives, delayed timelines, and frustrated tenants. Start your due diligence at least six months before construction begins. That’s not padding; you need that time.

What to assess before bidding:

• Electrical load: Confirm existing capacity. Determine whether the scope requires a service upgrade and engage LADWP immediately if so.

• Environmental testing: Complete lead and asbestos testing for pre-1980 properties. Know your roof weight capacity.

• Fire rating: Understand existing fire ratings so you can accurately plan for restoration.

• Shut-off locations: Map water, gas, and electrical shut-offs. Identify contractor staging areas and restrooms (crews cannot use tenant restrooms).

• New equipment requirements: Confirm how condensation, drainage, and clearance requirements will be met for each unit. 

Use the Pre-Construction Checklist (Appendix S10-A1) to confirm all contracts are final, incentives are aligned, timelines are set, and tenant engagement activities are planned before the first crew arrives. Appendix S10-A1

Permitting Timelines

Permitting is the most common source of schedule slippage, and the least forgivable, because it’s entirely predictable. Engage LADWP as early as possible. A working guide to the timelines:

• 6–8 weeks: Over-the-counter permits (no plan check required)

• 12–16 weeks: Full plan check required

• +6 months: LADWP electrical service upgrades; start this process immediately 

Vallejo is an instructive example: the building had 200 amps of electrical service. The scope required 600. That single requirement pushed the entire permitting timeline out and forced careful coordination to keep incentive program deadlines intact.

Scope Development

ELACC’s operating rule: align the scope of work to available incentive funding. If you’ve secured $700,000 in incentives, the scope is $700,000. This keeps the project financially viable without creating a gap that falls back on the property. For each incentive program, review the minimum equipment requirements before finalizing; they’re non-negotiable.

Require all contractors to walk every unit before submitting bids. Not a representative sample, every unit. Occupied rehab: no two units are identical, even in the same building. ELACC learned this at Lorena Terrace, where they assumed unit closets were uniform and ordered equipment for all 50 units before installation started. When crews got into individual units, some closets were too small. The whole order had to be revised. Walk every unit before finalizing scope. As Suzuki of Little Tokyo Service Center put it: “We’d like to think all the units are uniform, but they’re just not.”

Document unit conditions with pre-construction photos: water heaters and AC units with brand, model, serial number, and date-stamp. These photos protect you during incentive audits.

Contractor Selection for Occupied Rehab

The full selection criteria and bid evaluation process are in Section 8. Before signing, re-verify the two criteria that matter most in occupied rehab: a proven track record managing construction around tenants in place (ask for references, and call them), and the financial stability to float costs while waiting on slow incentive reimbursements. One further rule: any potential issue routes through the Project Manager and Property Manager, never directly to tenants.

Roles and Responsibilities

Before the first crew member sets foot on the property, everyone needs to know exactly what they’re responsible for, and what they’re not. Confusion about roles is how contractor crews end up talking directly to tenants, how notices get missed, and how units end up without power at the end of the day.

• Project Manager: Contractor oversight, schedule management, budget and invoicing, notice coordination with the GC. Single point of accountability for everything technical.

• Property Manager: Tenant communication, relocation coordination if needed, habitability monitoring. The trusted face of the project for residents; protect this relationship.

• General Contractor: Single point of contact for the field. Compliance with project rules and performance specs, prevailing wage requirements, field-condition reporting.

• Asset Management / Ownership: Major decision-making, relocation approvals, risk management.

The most important communication rule: tenant communication routes through the Property Manager only. Not the Project Manager. Not the contractor. Not the crew. Show tenants the notice template at the first pre-construction meeting so it’s familiar when it shows up on their door.

Tenant Habitability Plan (THP)

The THP is prepared by the general contractor and submitted to LAHD before construction starts. The contractor must convince LAHD, in writing, that their approach keeps units habitable throughout the project. LAHD’s standard is clear: habitable by end of day, every day. In practice:

• Water running (hot and cold) in all units

• Power restored to all units

• All wall holes and breaks covered or sealed

• Units restored to LAHD habitability standards

• Contractor crews prohibited from using tenant restrooms

The goal of the THP is to avoid relocation. Relocation is expensive, disruptive for residents, and often means tenants don’t return. ELACC has avoided relocation on every project in their portfolio.

During Construction: What Goes in the Contract

There is one simple rule for occupied rehab: if it matters, it goes in the contract. Not in an email. Not in a meeting. In the contract. Four categories of contractor expectations that must be contractual: That includes requiring the contractor to participate in tenant meetings.

• Daily Clean-up and Safety: Clean site daily; protect tenant property and shared spaces. No tools or materials left on tenant furniture. No use of tenant restrooms.

• Look-Ahead Scheduling: Maintain 1-week and 2-week schedules with backup work plans. Schedules slip in two predictable ways: equipment arrives late, or a tenant isn't home. Have a backup task for both. Meet weekly with your contractor to plan the next two weeks, every week.

• Equipment and Incentive Approval: Secure all equipment approvals before ordering. Confirm incentive-program compliance before installation begins.

• Documentation Requirements: Before/after photos, itemized invoicing, old and new equipment logs. Pre-inspect systems as installed, before completing each unit. Have the program inspector and LADBS inspect the first few installations before the contractor proceeds with the rest. 

Managing Surprises

Surprises will happen. Every occupied rehab has them. What separates well-managed projects from troubled ones isn’t the absence of surprises; it’s having a defined process to handle them quickly. Three things to set up before construction starts:

• Escalation process: A defined path for raising and resolving field issues fast. Field issues route through the GC; tenant issues through the Property Manager. Resolve at the lowest level; escalate only what blocks schedule or scope. Define an emergency path too: if the contractor cannot reach the Property Manager and must shut off water, everyone should know who to call next.

• Communication chain: Everyone knows who to call and in what order. Beware contractors who bid low and then pile on changes. Reserve change orders for true surprises or LADBS requirements. Tenants will also ask for extras during construction (“you’re replacing aerators, why not my whole faucet?”); the Property Manager’s answer is “this is the scope we funded,” with requests logged for the weekly meeting.

• Financial leverage: Your strongest tool for managing the contractor is the pay application. Don’t release payment until the Project Manager has physically walked the completed units. Hold at least 10% retention, written into the contract, and require a lien release with each draw. This isn’t punitive; it’s how you maintain accountability throughout the project.

Equipment Specification Compliance

Once your equipment list is approved by the incentive program, nothing on that list can change without going back for re-approval. Any substitution, even a model that seems equivalent, can jeopardize your eligibility. ELACC’s lesson at Lorena Terrace: the installed equipment deviated from the approved spec and they lost $40,000 in incentives. Additionally, two heat pump water heaters were placed in outdoor closets designed for indoor units, triggering warranty complications and unexpected replacement costs. Both were avoidable. ELACC now locks down equipment specs and placement before construction begins, and moves nothing without incentive-program approval.

Before bulk ordering, pilot-test equipment in a vacant unit to confirm sizing and compatibility. Typical lead times from ELACC’s projects: about one month for HVAC equipment, two months for heat pump water heaters, and up to six months for electrical service equipment. Order early so equipment never holds up the crew.

Project Close-Out

Close-out is where administrative weight accumulates, and where impatient contractors push to wrap up before everything is truly done. Hold the line. Final payment doesn’t release until:

• Final walk-throughs with all stakeholders completed

• Most incentive programs require their own separate close-out site visit; walk the site with the contractor first to clear the punch list before the program walk-throughs

• Punch list completed and verified by the Project Manager

• Warranty documentation collected and filed

• Operations and maintenance manuals handed over

• Building staff trained on new equipment (filter changes, descaling, routine upkeep)

• Lien releases received for all draws

Two Hard Lessons From the Field

These are shared here because they were avoidable and expensive:

Vallejo Apartments: At final inspection, the city required a complete re-piping of the building’s hot and cold water lines, plus a new water meter. The 100-year-old plumbing was too outdated to leave in place. Cost: $130,000, not in the original budget. In hindsight, the signal was there: tenants had been complaining about low water pressure for years. The re-piping ultimately improved the building, but the timing and cost were brutal (see Case Study #1). ELACC raised the money through new grant applications, which put the project on hold for about three months.

Lorena Terrace: $40,000 in lost incentives and two misplaced heat pump water heaters. The full story is in Equipment Specification Compliance above and in Case Study #4; the lesson is to lock down specs and placement before ordering, then change nothing without incentive-program approval.

10 Success Factors for Occupied Rehab

Adalia Rodriguez distilled ELACC’s occupied-rehab experience into ten factors. They’re not complicated; what makes them hard is doing all ten consistently across a 6–12 month project:

1. Start permitting early

2. Complete due diligence before bidding

3. Clearly define roles and responsibilities

4. Make the Property Manager the tenant communication lead

5. Require regular coordination meetings

6. Establish notice and access protocols

7. Maintain tenant safety and habitability every day

8. Order equipment early, before the crew is ready

9. Document all communications and decisions

10. Build a culture of collaboration among all partners 

Scheduling, Notices, and Tenant Cooperation

Use a standard notice template for all tenant communications. Introduce the template at pre-construction meetings, post it on doors when each unit's turn arrives, and meet with tenants monthly (or more often on longer jobs), projecting which area of the building is next so they can anticipate notices.

Be prepared for flexible scheduling and maintain a contingency plan for potential delays. Build flexibility into the timeline to accommodate unforeseen issues (e.g., equipment delays, tenant refusals, or change orders).

Provide tenants with a clear construction timeline, and create a community group chat or other direct communication channel to keep them informed of schedule changes and urgent updates.

In addition to the required 24-hour notice, we recommend providing tenants with a 72-hour construction notice to ensure tenants know what is expected from them and why their cooperation is important for construction to run smoothly. Moreover, issuing a 72-hour notice gives tenants enough time to remove personal belongings from the area designated for construction, preventing potential construction delays and damage to tenant property.

Note: By this time, you should have an assigned service provider or on-site contact to oversee specific tenant requests or concerns.

During construction, walls may be exposed, and temporary system outages may occur. Provide tenants with advance warnings and, if necessary, accommodations to minimize disruptions. If construction takes place during the summer or winter months, it may be beneficial to have a few backup heating or cooling systems (such as portable heaters) available on-site for tenants.

Monitor tenant feedback on installations and proactively address issues. Keep in mind that tenants may refuse entry for decarbonization work; be ready to address their concerns while keeping the project moving forward.

Maintain a detailed record of construction dates and the specific units where work is being done (refer to the table below and this Sample Construction Timeline Log Appendix S10-A2).

Coordinate Inspections and Adjustments

Ensure everyone on your team, including the contractor, is fully aware of the inspection schedule. Promptly address any issues that come up during inspections, such as equipment malfunctions or design adjustments.

Construction completed is not project completed. Section 11 covers the verification work that protects your incentives.