If you have been watching Richmond for small multifamily opportunities, you have probably noticed two things at once: the market still offers real neighborhood-scale properties, and the rules behind the numbers matter just as much as the numbers themselves. That can feel promising and complicated in equal measure. The good news is that with careful underwriting and local due diligence, you can spot opportunities more clearly and avoid expensive assumptions. Let’s dive in.

Why Richmond stands out

Richmond offers a meaningful small multifamily base within a city that is still largely made up of single-family housing. According to the City of Richmond housing fact sheet, 2.7% of housing units are in 2-unit buildings, 8.1% are in 3- or 4-unit buildings, and 5.2% are in 5-9 unit buildings. That creates a real pipeline of duplexes, triplexes, fourplexes, and other smaller income properties that fit neighborhood investors looking for manageable scale.

That same fact sheet also shows Richmond has 42,257 housing units, with 95.8% occupied and 4.2% vacant. While that is not the same as a dedicated apartment vacancy survey, it does suggest a market with relatively limited slack. For you as a buyer, that supports a more conservative approach to vacancy assumptions and reinforces the value of well-run, functional rental housing.

Older buildings shape the opportunity

A large share of Richmond’s housing stock was built decades ago. The city reports that nearly 45% of housing was built before 1960, including 10.8% built in 1939 or earlier, 17.8% in 1940-49, and 16.2% in 1950-59. In practical terms, many small multifamily properties may come with deferred maintenance, aging systems, and capital needs that should be part of your acquisition plan from day one.

This is one reason Richmond can be attractive for buyers who are comfortable with hands-on analysis. A property may have upside, but that upside often depends on smart planning around repairs, reserves, and operations rather than quick cosmetic changes alone. In this market, condition is not a side note. It is part of the investment thesis.

Small multifamily formats Richmond zoning supports

Richmond’s zoning framework helps explain why smaller-scale housing remains relevant. In the city’s housing constraints appendix, RL2 is described as allowing duplexes, townhomes, cottages, bungalows, and second units. RM1 allows one- to three-story garden apartments, historic bungalows and cottages on small lots, townhouses, stacked flats, and bungalow courts when compatible.

That matters because it shows small multifamily in Richmond is not just a legacy product type. It is also part of the city’s land use framework. If you are evaluating a property, zoning can influence whether your opportunity is primarily hold-and-operate, light repositioning, or something more incremental like adding legal units where allowed.

Corridor growth may reshape select areas

One of the clearest signs that Richmond’s market is evolving is the city’s Livable Corridors Form-Based Code, adopted on April 18, 2023. The city says this code is intended to shorten project review, reduce some parking and open-space barriers, and support 1,500 to 2,500 new residential units along Macdonald Avenue, San Pablo Avenue, and 23rd Street.

For small multifamily buyers, this does not automatically mean every corridor parcel is a redevelopment play. It does mean some locations may deserve a closer look than they would have under older auto-oriented zoning patterns. If you are comparing properties, corridor-adjacent sites may offer more infill or repositioning potential than a quick first glance suggests.

ADUs are part of the story

Richmond’s recent production data shows that smaller housing formats are active. The city’s Housing Element progress page reports that as of January 1, 2025, Richmond had permitted 326 units toward its 2023-2031 RHNA goal, including 12 units in 2-4 plex projects, 157 ADU units, and 84 units in 5+ unit projects. The city also notes that ADUs are the only unit type with consistent completions to date.

That trend makes ADUs especially relevant when you evaluate existing multifamily properties. The city’s ADU guidebook states that in multifamily zones, attached ADUs can be added up to 25% of the existing dwelling units onsite, with at least one unit allowed, and detached ADUs can allow 2 ADUs per lot. The guidebook also notes that converting existing space can be a lower-cost path than building detached units from scratch.

For you, this means value-add in Richmond may sometimes look more like lawful unit additions and space conversion analysis than aggressive rent-reset assumptions.

What tenant demand looks like

Richmond’s renter base is substantial. The city fact sheet shows that 47.5% of occupied units are renter-occupied, which supports the case for stable rental demand across much of the city. The same source reports a median gross rent of $1,895, with renter households spread across several rent bands rather than clustered in a single price point.

That distribution matters because it suggests Richmond is not a one-size-fits-all rent market. The city reports that 19.0% of rent-paying households are in the $1,500-$1,999 band, 19.8% are in the $2,000-$2,499 band, 14.4% are in the $2,500-$2,999 band, and 11.8% pay $3,000 or more. Unit condition, layout, and location can all affect where a property competes.

The bedroom mix is also useful context. Richmond’s stock is weighted heavily toward 2-bedroom and 3-bedroom homes and apartments, at 31.4% and 32.7% of units respectively. While that does not guarantee performance, it suggests that larger, livable units may remain especially relevant for many renters.

Why renters may stay renters longer

The city fact sheet also reports a median household income of $90,038 and a median owner-occupied home value of $650,100. That gap helps explain why many households may rent longer even while remaining active in the local housing market. For small multifamily owners, that can support demand for well-located rental units that offer practical livability.

Richmond’s employment base adds another layer of stability. The city identifies major concentration in healthcare, logistics, retail, public administration, manufacturing, and professional services, with large employers including Chevron Refinery, Kaiser Foundation Hospitals, UPS, Amazon, and Contra Costa County. A diversified employment mix can help support rental demand across different household types and income levels.

Local rules can change the math

This is where Richmond requires careful attention. The city states that most residential rental units are covered by the Richmond Rent Ordinance enrollment and registration requirements, and landlords must enroll rental units with the Rent Program. The city also notes that a new tenancy registration form is required whenever there is a complete change in tenancy.

Just as important, the city says not all residential properties are subject to both rent control and just-cause protections. Coverage should be verified unit by unit rather than assumed across an entire parcel. If you are analyzing a deal, this is not a detail to leave for later.

According to the city’s tenant and rent program information, covered units are subject to an Annual General Adjustment equal to 60% of CPI or 3%, whichever is lower. The ordinance also regulates Maximum Allowable Rent, and landlords cannot end a tenancy without just cause. Listed just-cause categories include nonpayment of rent, breach of lease, nuisance, failure to give access, owner or relative move-in, Ellis Act withdrawal, temporary vacancy for substantial repairs, and temporary tenancy.

Renovation plans need compliance budgeting

For many buyers, the biggest underwriting mistake is assuming a simple path to vacancy and rent reset. Richmond’s local rules make that a risky shortcut. The city states that relocation payments may be required for certain permitted evictions, including substantial repairs, and that no-fault displacement can trigger permanent relocation payments.

That means any renovation or repositioning plan should budget for more than construction costs alone. Compliance, timing, tenant communication, and possible relocation costs can all affect your returns. In Richmond, value-add is often more realistic when it is built around better operations, physical improvements, and legal expansion opportunities rather than rapid income acceleration.

A practical underwriting framework

A simple underwriting model still starts with the basics:

• Gross scheduled rent
• Other income
• Vacancy and credit loss
• Effective gross income
• Operating expenses
• Net operating income
• Reserves and capital needs

Freddie Mac’s AIMI FAQ explains NOI as income collected through operations minus the expenses required to run the property. It also notes that gross income growth is rent growth adjusted for vacancies. In addition, Freddie Mac’s multifamily underwriting presentation states that effective gross income is generally based on recent actual rent collections or the annualized current rent roll minus a minimum 5% vacancy, while operating expenses are generally based on trailing 12 months of history.

In Richmond, these basics matter even more because local conditions can distort a quick spreadsheet. If you are evaluating a property, pay close attention to:

• The in-place rent roll
• Actual collections, not just asking rents
• Unit-by-unit legal status and rent ordinance coverage
• Real estate taxes and insurance
• Repair costs for older systems and deferred maintenance
• Replacement reserves
• Any ADU or infill potential
• Tenant relocation and compliance exposure

What makes a Richmond deal attractive now

The best small multifamily opportunities in Richmond are often the ones where the story is clear and realistic. You may find promise in older duplexes, triplexes, and fourplexes with solid fundamentals, functional layouts, and room for operational improvement. You may also find upside in corridor locations or properties where ADU potential adds flexibility.

What usually works best here is disciplined patience. Richmond appears to reward buyers who underwrite conservatively, verify rules carefully, and view zoning, rent regulation, and capital planning as core parts of the deal. If you take that approach, the market can offer compelling neighborhood-scale opportunities without relying on overly optimistic assumptions.

If you are exploring a duplex, fourplex, or mixed-use income property in the Inner East Bay, working with someone who understands both the numbers and the neighborhood context can make the process a lot smoother. If you want a practical, local read on Richmond opportunities, connect with Elic Suazo to explore your East Bay options.

FAQs

What types of small multifamily properties are common in Richmond?

• Richmond includes 2-unit, 3-4 unit, and 5-9 unit properties, and city zoning also supports formats like duplexes, townhomes, cottages, stacked flats, and garden apartments in certain districts.

How do Richmond rent control rules affect small multifamily investing?

• Many residential rental units are covered by local rules on registration, allowable rent increases, and just-cause eviction, so you should verify coverage unit by unit before assuming future income growth.

Are ADUs a real opportunity for Richmond multifamily properties?

• Yes. Richmond allows certain attached and detached ADUs on multifamily lots, and the city notes that converting existing space can sometimes be a lower-cost path than ground-up construction.

Is Richmond a tight rental market for small multifamily owners?

• Richmond’s overall housing stock is reported as 95.8% occupied with a 4.2% vacancy rate, which suggests relatively limited slack, though that is broader than a dedicated apartment vacancy survey.

What should you review first when underwriting a Richmond small multifamily deal?

• Start with the current rent roll, actual expenses, property condition, local ordinance coverage, possible relocation costs, and any legal path for improvements or additional units.