Tear Down or Renovate

Most homeowners approach this question as a cost comparison. Is it cheaper to renovate, or cheaper to demolish and build new? It's a reasonable starting point, but in Los Angeles it turns out to be the second question, not the first. The first question is: what does each option actually allow you to build?

In LA, the tear-down-or-renovate decision is shaped primarily by zoning and regulatory factors that determine what can be built on a given lot under current rules. An existing home may exceed those limits because it was built under prior, more permissive zoning. A new home on the same lot would have to comply with current zoning, which in many neighborhoods yields a smaller building. The cost comparison only becomes meaningful once you understand what each path produces - and those two outcomes are often not the same house.

There is no universal right answer to this question. Some properties are clear candidates for demolition: the structure is beyond economic repair, current zoning allows equal or greater building area, and the owner wants something entirely different. Other properties are clear candidates for renovation: the structure is sound, the home exceeds current zoning entitlements, and the owner's program can be achieved within the existing envelope. Most properties fall somewhere in between, where the answer depends on the specific intersection of regulation, site conditions, program, and budget.

This guide covers the regulatory, structural, and financial factors that inform the decision. It's organized roughly in the order they should be evaluated: zoning first, then site-specific conditions, then cost.

Last updated: February 2026

Zoning Nonconformities

This is the single most important factor in the analysis, and the one most homeowners encounter for the first time during this process.

A legally nonconforming building is one that was built in compliance with the zoning rules in effect at the time of construction but does not comply with current zoning. In Los Angeles, this is common rather than unusual. The city has progressively tightened residential zoning over the past two decades, while the existing housing stock remains in place. Three major legislative actions account for most of the nonconformities in single-family neighborhoods:

The Baseline Mansionization Ordinance (BMO), first adopted in 2008 (Ordinance No. 179,883) and significantly amended in 2017 (Ordinance No. 184,802), reduced the allowable floor area ratio on single-family residential lots citywide. The Baseline Hillside Ordinance (BHO), originally adopted in 2011 and also amended in 2017, applied similar reductions in hillside areas with an additional slope-based formula. And the R1 Variation Zones, adopted as part of the 2017 neighborhood conservation initiative, imposed stricter limits in 15 specific neighborhoods.

The cumulative effect is that many existing homes in Los Angeles are larger than what current zoning would permit as new construction on the same lot.

How Nonconforming Status Works

Under LAMC Section 12.23, a nonconforming building may be maintained, repaired, or structurally altered, provided the building conformed to the requirements of the zone at the time it was built. For buildings that are nonconforming as to area or yard regulations, Section 12.23.A.1 allows repair, alteration, or internal remodeling provided at least 50 percent of the perimeter length of the existing nonconforming exterior walls is retained.

What This Looks Like in Practice

On a 7,500-square-foot R1-zoned lot in Brentwood with an existing 4,200-square-foot home built in the 1970s, the current BMO yields a maximum residential floor area of approximately 3,375 square feet (0.45 FAR, plus the 200-square-foot garage exemption). Renovation preserves the full 4,200-square-foot envelope. Rebuilding under current zoning produces a home roughly 800 square feet smaller.

The same homeowner choosing renovation retains the legally nonconforming 4,200-square-foot building envelope. The interior can be gutted, systems replaced, and the floor plan reconfigured within the existing envelope - all at the full 4,200 square feet.

This arithmetic recurs across neighborhoods where the 2017 BMO amendments reduced allowable floor area. Before the amendments, the effective FAR for R1 lots was roughly 0.50 with the 400-square-foot garage exemption and various design bonuses. After the amendments, the base FAR dropped to 0.45, most bonuses were eliminated, and the garage exemption was halved to 200 square feet. On a 6,000-square-foot lot, that translates from roughly 4,400 allowable square feet to roughly 3,000. An existing home anywhere in that 3,000-to-4,400-square-foot range is now legally nonconforming, and renovation preserves that full square footage while a teardown resets to the current 3,000-square-foot limit.

Determining Nonconforming Status

The City of Los Angeles maintains the Zoning Information and Map Access System (ZIMAS), which provides any property's zoning designation, overlay zones, specific plan areas, and other land use designations. ZIMAS identifies the zone (R1, RD, RE9, etc.), hillside designation, coastal zone status, HPOZ status, and applicable specific plans. A complete nonconformity analysis goes a step further: pulling the original building permits from LADBS records, verifying existing conditions, calculating the allowable floor area under current zoning, and comparing the two. Running this analysis early - ideally before committing to either path, and before purchasing a property where a teardown is being considered - gives the owner a clear picture of what each option produces. Our feasibility study includes this comparison as a standard component.

Overlays and Layered Regulations

The BMO and BHO are citywide baselines, and many neighborhoods layer additional requirements on top. Brentwood, Pacific Palisades, and several other neighborhoods have additional specific plan requirements. R1 Variation Zones (R1V, R1F, R1R) impose stricter FAR, height, and massing standards than the base R1 zone. Each additional overlay or specific plan independently defines what is allowed, and they stack - the most restrictive standard controls. A property might be subject to the base R1 zone, the BMO, an R1V variation zone, and a specific plan simultaneously, each governing floor area, height, setbacks, lot coverage, and massing.

It is worth understanding what each of these layers actually regulates. The base zone (R1, RE9, RE11, etc.) establishes the fundamental development standards: minimum lot size, setbacks, height, and density. The BMO and BHO overlay additional floor area calculations on top of the base zone. The R1 Variation Zones, where applied, impose further restrictions on massing and articulation - R1V limits the width of any single building wall plane, R1F requires front-loaded massing patterns, and R1R requires rear-loaded patterns. The Brentwood-Pacific Palisades Specific Plan adds its own layer of height and setback controls.

Because these layers are independent, a property can be compliant with one set of regulations and nonconforming under another. An existing home might meet current setback requirements but exceed current FAR. Or it might comply with FAR but exceed the encroachment plane standards introduced by the 2017 amendments. Renovation preserves each nonconforming condition independently, so identifying all of them - not just the most obvious one - ensures the full value of the existing entitlements is understood.

When a Renovation Is Treated as a Demolition

There is an important threshold question in extensive renovations. Under the nonconforming building provisions of LAMC 12.23.A.1, retaining at least 50 percent of the perimeter length of the nonconforming exterior walls preserves the building's legal status. Coordinating the design and permitting strategy around this threshold from the beginning allows owners to pursue extensive interior renovation while maintaining their nonconforming entitlements. The determination involves some plan-checker judgment, so building the threshold into the project design early provides the clearest path through review.

In the Coastal Zone, the proposed Mello Act ordinance defines demolition as the removal or replacement of more than 50 percent of existing exterior walls, foundation walls, or roof framing, reflecting a similar framework.

Hillside Properties

On hillside lots, the analysis acquires several additional dimensions that are either absent or minimal on flat lots.

Foundation Systems

An existing hillside home has a foundation system - typically some combination of drilled caissons, grade beams, and retaining walls - that was designed for the site's specific geotechnical conditions, built, and has been performing in place for the life of the structure. Depending on the site, these systems represent $300,000 to $800,000 or more in replacement value. Preserving a structurally sound foundation through renovation retains that investment and eliminates one of the largest cost items in hillside construction. New construction on the same site means designing and constructing an entirely new foundation system, including a new geotechnical investigation, new soils report, and potentially shoring during construction for slope stability. More detail on hillside foundation systems is in our foundation and geotechnical guide.

Grading and Soil Export

Renovation of an existing hillside structure typically requires minimal additional grading and soil export, because the existing home has already displaced its volume of earth. New construction on the same footprint involves excavating for a new foundation, generating soil that must be exported. On narrow hillside streets in Sunset Plaza, Castellammare, upper Mandeville Canyon, and the Hollywood Hills, keeping export volumes low translates directly to lower trucking and disposal cost, a shorter construction schedule, and a smaller hauling operation through the neighborhood. Our hillside construction guide covers these logistics in detail.

The BHO also regulates grading directly. Maximum grading quantities on hillside lots are calculated based on lot area and slope, and the 2017 amendments to the BHO tightened grading exemptions, particularly for excavation beneath the building footprint. Renovation that preserves the existing foundation system typically involves little to no additional grading beyond what's needed for localized repairs or utility modifications, keeping the project well within the BHO's grading allowances.

Retaining Wall Integration

Existing retaining walls on hillside properties are frequently integrated with the home's foundation. Grade beams may bear on or tie into retaining walls. Retaining walls may serve dual functions, holding back the hillside while forming below-grade walls of the home. Understanding these relationships early - through a structural and geotechnical assessment - allows the owner to evaluate how much of the existing system can be preserved through renovation, and what a new-construction path would require in terms of temporary shoring and replacement structures. This assessment is a standard part of any teardown analysis on a hillside lot.

Hillside Regulations

Renovation in designated hillside areas generally proceeds through the standard building permit process. New construction triggers the Hillside Development Permit process, which involves more extensive review. The BHO imposes floor area calculations based on a slope-band formula that accounts for lot steepness. In the R1 zone, the FAR ranges from 0.50 for relatively flat portions (0-15% slope) down to 0.30 for steep portions (60-100% slope), and drops to zero for slopes exceeding 100%. Renovation preserves floor area that may exceed what this formula would allow for new construction, particularly on steeply sloped lots.

Coastal Zone

Properties within the California Coastal Zone face additional regulatory layers that affect renovation and demolition differently.

Coastal Development Permits

The California Coastal Act defines "development" broadly to include construction, reconstruction, demolition, and alteration of any structure. Within the Coastal Zone, most development requires a Coastal Development Permit (CDP), issued either by the City of Los Angeles or by the California Coastal Commission depending on the jurisdiction area.

The relevant distinction is that improvements to an existing single-family residence are generally exempt from CDP requirements under certain conditions, which is one of renovation's clearest regulatory advantages in the Coastal Zone. Under California Code of Regulations Title 14, Section 13250, improvements to an existing single-family residence that present no risk of adverse environmental effect qualify for exemption. Interior remodels that add no floor area and preserve coastal resources typically qualify. Additions increasing floor area by less than 10 percent or height by less than 10 percent may also qualify, provided the property is outside appealable areas and away from sensitive resources.

Demolition and new construction clearly constitute "development" and require a CDP, which involves environmental review, public notice, and potentially a public hearing. In the Commission's appeal jurisdiction (generally between the sea and the first public road), a locally approved CDP can be appealed to the Coastal Commission. The practical effect is that demolition and new construction can add 6 to 18 months to the project timeline compared to a renovation that qualifies for an exemption.

It is also worth noting that a CDP can include conditions on the building program - related to public access, view corridors, habitat protection, or building siting - that are negotiated during the process and become binding. Renovation that qualifies for an exemption operates outside this framework entirely, giving the owner more control over the program.

Whether a property is in the Coastal Zone, and whether it falls within the appeal jurisdiction or non-appealable jurisdiction, can be verified through ZIMAS.

Mello Act

The Mello Act (California Government Code Sections 65590-65590.1) applies to demolition, conversion, and construction of housing within the Coastal Zone. Its purpose is to preserve affordable housing in coastal areas. For owner-occupied single-family homes being demolished and replaced with an owner-occupied single-family home, an exemption generally applies. Properties with rental history, including guest houses or ADUs that have been rented, benefit from early Mello Act review through the Los Angeles Housing Department (LAHD) - a process that takes approximately 12 to 16 weeks - so that the determination is in hand before the project timeline is finalized.

The Coastal Zone in Los Angeles includes portions of the Brentwood-Pacific Palisades, Venice, Playa Del Rey, San Pedro, and Wilmington community plan areas.

PGRAZ Zones

Following the January 2025 Palisades fire, the City designated Post-Fire Geologic Assessment Review Areas (PGRAZ zones) across portions of Pacific Palisades and surrounding hillside neighborhoods. For homes destroyed by the fire, the teardown decision was made by the fire. Under Emergency Executive Order No. 1, eligible fire-damaged projects may be replaced or rebuilt with the same nonconforming conditions as the pre-fire structure, with building footprint expansion of up to 10 percent - a significant provision that preserves nonconforming status for destroyed homes.

For surviving homes in PGRAZ-adjacent areas where the owner is considering a voluntary teardown, the standard nonconforming analysis applies, and the PGRAZ designation adds geotechnical review requirements. For a comprehensive discussion of the fire rebuild scenario, see our fire rebuild guide and PGRAZ guide.

CEQA Considerations

The California Environmental Quality Act (CEQA) applies to discretionary government actions, including certain land use approvals. For residential projects, most single-family renovations and even many new-construction projects are categorically exempt from CEQA under Class 1 (existing facilities), Class 3 (new construction of small structures), or Class 32 (in-fill development). These exemptions apply broadly, with exceptions only for projects that may cause a significant environmental effect due to unusual circumstances or that involve sites listed pursuant to Government Code Section 65962.5.

In practice, renovation proceeding through ministerial building permits typically qualifies for categorical exemption outright. New construction is more likely to involve discretionary approvals (variances, specific plan exceptions, Coastal Development Permits) that bring CEQA review into scope - another area where renovation offers a more streamlined path.

Historic Preservation and HPOZ

Properties within one of Los Angeles's 35 Historic Preservation Overlay Zones have specific regulatory pathways for renovation and demolition that depend on the structure's classification.

Contributing vs. Non-Contributing

Each HPOZ has a historic resources survey that classifies every property as either "Contributing" (including "Contributing Altered") or "Non-Contributing." Contributing structures date to the neighborhood's period of significance and retain their historic architectural character. The classification is available in ZIMAS.

For contributing structures, demolition requires a Certificate of Appropriateness (COA), reviewed by the HPOZ Board and the Area Planning Commission. The board evaluates the impact on the district's historic character, and contributing structures with significant integrity are generally expected to be preserved and rehabilitated. For non-contributing structures, demolition still requires review but approval is more straightforward. New construction within any HPOZ is reviewed for compatibility with the district's historic character.

All exterior work within an HPOZ - including work that would otherwise be permit-exempt, such as painting and landscaping - goes through planning approval. Engaging with the HPOZ Board early in the design process helps align the project with district guidelines and streamlines review. The City's Office of Historic Resources administers the HPOZ program and provides the review process and design guidelines for each district.

The Mills Act

Properties Outside HPOZs

Properties outside a designated HPOZ may still be subject to historic review if they are listed on or determined eligible for the California Register of Historical Resources, the National Register of Historic Places, or individually designated as a Los Angeles Historic-Cultural Monument. Confirming historic status early in the process clarifies the available options and allows the project team to plan accordingly.

Cost Comparison

With the regulatory picture established, the cost analysis can be structured around what each path actually produces.

Renovation vs. New Construction Pricing

The comparison is not "cost to renovate" versus "cost to build new" in the abstract. It is the cost of the renovated building the owner would actually get versus the cost of the new building zoning would actually allow. If the two paths produce different-sized buildings, the comparison must account for that.

At the time of this writing, cost ranges for residential projects in the $3M to $15M range on the Westside are as follows. For a more detailed breakdown, see our construction cost guide.

The renovation premium reflects the nature of renovation work: selective demolition and reconstruction, routing new systems through spaces originally designed for different configurations, matching or integrating with existing materials, and accommodating concealed conditions discovered during construction. Understanding this premium upfront allows the cost comparison to reflect what each path actually delivers.

To put the premium in concrete terms: if new construction at a given finish level costs $800 per square foot, an equivalent renovation scope on the same house would typically run $960 to $1,120 per square foot. On a 3,500-square-foot home, that premium adds $560,000 to $1,120,000 to the renovation cost compared to what the same scope of work would cost in new construction. The premium reflects real inefficiency, not contractor markup - it takes more labor hours and more material waste to renovate than to build new.

The Crossover Point

When the renovation scope becomes extensive enough that the budget approaches 60 to 70 percent of new-construction cost on a total-project basis, it's worth evaluating whether new construction delivers better value per dollar - at that level of renovation, the owner is paying the renovation premium to rebuild most of the home's systems while working within the existing structure. Completing the zoning analysis first clarifies whether new construction can match the existing building's size. Where the nonconforming analysis shows that renovation preserves significant additional floor area, the crossover calculation shifts back toward renovation because the renovated home delivers more building for the money.

This is why the zoning analysis is the foundation for a meaningful cost comparison.

Soft Costs

Design fees for renovation are generally higher than for new construction because renovation requires as-built documentation and iterative design around existing conditions. New construction typically involves higher permitting and entitlement costs, particularly for discretionary approvals (variances, Coastal Development Permits, Hillside Development Permits) and a longer permitting timeline. On balance, soft cost differentials typically range from $50,000 to $150,000 depending on project specifics. Our construction timeline guide covers the permitting and entitlement phases in detail.

Timeline and Carrying Costs

New construction typically follows a predictable sequence where each trade has clear access, which can make the construction phase itself more efficient. Renovation follows a more iterative sequence as existing conditions are discovered during work - concealed structural conditions, systems requiring rerouting, prior water intrusion - each of which may require a design adjustment. Thorough pre-construction investigation (opening walls during the design phase, performing targeted exploratory demolition) reduces the frequency and impact of these discoveries. Carrying costs of $10,000 to $30,000+ per month mean that every month saved through better pre-construction planning translates directly to budget savings, and factoring realistic timelines into the financial comparison keeps the analysis accurate. Our construction timeline guide covers the permitting and construction phases in detail.

Environmental and Hazardous Materials

Older homes in Los Angeles present environmental considerations that affect both paths, but with different cost profiles.

Asbestos

Homes built before 1980 frequently contain asbestos in insulation, floor tiles, roofing, pipe wrap, joint compound, and textured ceilings. The South Coast Air Quality Management District (SCAQMD) Rule 1403 requires an asbestos survey before any demolition or renovation that disturbs suspect materials. For demolition, comprehensive abatement must be completed before the structure comes down, with costs ranging from $15,000 to $80,000+ depending on material quantity. For renovation, abatement is triggered when work disturbs asbestos-containing materials, and may occur in phases as different areas are opened.

Lead Paint

Homes built before 1978 are presumed to contain lead-based paint under EPA regulations. The EPA's Renovation, Repair, and Painting (RRP) Rule requires that renovation of pre-1978 homes be performed by EPA-certified firms using lead-safe work practices. For demolition, HUD and EPA regulations govern lead paint handling during teardown, with costs generally embedded in the demolition contractor's pricing.

Other Materials

Galvanized plumbing with lead solder (common in pre-1960s homes), PCBs in pre-1979 fluorescent ballasts, and contaminated soil from former agricultural use (particularly in the San Fernando Valley) are among other conditions that may be encountered. Hazardous materials add cost to both paths. For demolition, a comprehensive survey performed upfront produces a clear cost picture. For renovation, conducting targeted testing during the design phase - before construction begins - brings cost predictability closer to the demolition scenario and allows the budget to account for abatement in advance.

Evaluating the Decision

The factors above can be organized into a sequence of questions that, taken together, indicate which path is more appropriate for a given property and program.

The Feasibility Study

The framework above identifies the questions. The answers depend on facts specific to each property that can only be determined through investigation.

A structured feasibility analysis before committing to either path typically includes a zoning analysis confirming current entitlements and calculating maximum buildable area under current code, a preliminary structural assessment of the existing building and foundation, a hazardous materials screening, and a conceptual cost comparison showing what each path produces and what each path costs. The investment is typically $10,000 to $25,000 depending on scope. Our feasibility report details what this process covers.

The zoning analysis is the foundation of the entire exercise. It identifies whether nonconforming conditions exist, quantifies the difference between existing and allowable floor area, and maps every applicable overlay, specific plan, and designation that shapes future development. With this analysis complete, the cost comparison is grounded in what each path actually produces rather than assumptions.

The structural assessment evaluates the existing building's capacity to support renovation. It identifies whether the foundation, framing, and structural systems are suitable for the owner's program or whether they present conditions that would require substantial remediation. On hillside properties, this assessment includes the relationship between the home's structure and the site's retaining walls and slope stability.

The hazmat screening identifies probable environmental conditions based on the home's age and construction type, providing a basis for cost estimating on both the renovation and demolition paths.

The conceptual cost comparison brings the regulatory and physical analysis together into a financial framework: here is what renovation produces and what it costs, here is what new construction produces and what it costs, and here is how the timeline and carrying costs compare. With these numbers on the table, the decision can be made from data rather than intuition.

For a property where the tear-down-or-renovate decision is the first question, this analysis is the first step. The regulatory, structural, and financial factors are specific enough to each property that a property-level investigation produces a substantially clearer answer than general principles alone.

This page provides general information about the tear-down versus renovation decision for residential properties in Los Angeles and is not intended as legal, zoning, or financial advice. Specific projects require evaluation by licensed professionals. Regulatory information reflects conditions as of February 2026; ordinances, FAR calculations, and zoning requirements are subject to change. Consult LADBS, LA City Planning, and applicable agencies for current requirements applicable to your property.