By Daniel Yukelson, Executive Director, Apartment Association of Greater Los Angeles

As the late, great President of the United States, Ronald Reagan, once said: “There you go again!”  And, there we go once again.  Not much more than a few years after nearly two-thirds of California’s voters rejected both Propositions 10 and 21, backers of these strict rent control measures have again garnered the number of required signatures to qualify virtually the same rent control measure for the November 2024 ballot.  Like the two proposed ballot measures in 2018 and 2020, we must now go to battle and defeat this latest attack on rental housing providers!

Don’t Miss the West Coast’s Largest Income Property Expo – Attendance is Free!

Explore Investment Opportunities Both Large and Small, Meet 100’s of Vendors

The Income Property Management Exposition (IPME) returns to the Pasadena Convention Center Tuesday, May 23^rd, and this year promises to be bigger and better than ever before.  IPME provides rental property owners, managers, and investors with the latest insights to succeed in the changing rental housing market. In response to the high demand for rental housing, rising inflation, interest rates, and pandemic-driven challenges, IPME offers an opportunity to learn how to adapt and thrive in this ever-changing marketplace.

Pick up the phone today to tell Supervisors Solis & Horvath “NO!”

At the Los Angeles County Board of Supervisors meeting on February 7, 2023, Supervisor Solis proposed and Supervisor Horvath seconded a last-minute amendment that was not originally on the agenda to revise the Homeless Emergency Declaration (Agenda Item #16) to support using this new “emergency” to extend the eviction moratorium indefinitely to all rental housing throughout LA County. They requested a report back in 45 days legally instructing them how to do so.

The Wait is Finally Over: Join Your Peers for the “Business of Property Management”

For over a decade, the Income Property Management Expo & Exhibition (IPME) has provided property owners, managers, investors, and real estate professionals with the information they require to succeed in the ever-changing real estate business.  With the increased demand for rental housing, an unprecedented rate of inflation, rising interest rates, and pandemic-driven moratoriums, it’s time to be reinvigorated, get back to work, join together with peers and industry experts, and learn how to navigate the new normal of today’s real estate marketplace. IPME attendees will discover many new strategies and tools property owners and investors require to thrive in this post-pandemic environment.

The Los Angeles Area’s largest, most important annual property management expo is back after a two-year, pandemic-driven hiatus, offering fresh strategies so attendees can get back into the game of making informed real estate decisions.

Governor Signs Assembly Bill 3088, the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020”

Bill Passed by Overwhelming Majority, Bipartisan Vote in Both the Assembly (59-9) and Senate (33-2)

As anticipated, late Monday night, Assembly Bill 3088, the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020” was signed into law by Governor Gavin Newsom and takes effect immediately.  The “key” provisions contained in the legislation are described below.

In response to the Coronavirus (COVID-19) pandemic, cities throughout California are issuing orders and adopting urgency ordinances establishing temporary eviction moratoriums on evictions due to non-payment of rent for renters impacted by COVID-19.  Some cities are also prohibiting “no-fault” evictions except in limited circumstances.  In addition, some cities are also prohibiting Ellis Act evictions.

The number of cities that have instituted temporary eviction moratoriums continues to expand.  The list provided below is a sampling of the cities, with links to their orders and/or ordinances, that have implemented temporary moratoriums and not inclusive of all the cities that may adopt such moratoriums.  The Apartment Association of Greater Los Angeles is committed to providing updated information throughout the pandemic.

Rely on the People Who Know Science.

When coronavirus has been detected in a rental unit, the first and most compelling course of action is to call local public health officials to seek guidance in how to handle it.

Ask the infected tenant to voluntarily place themselves in a hospital facility, or at a bare minimum, self-isolate themselves.  For someone who exhibited symptoms or has tested positive, the most prudent course of action is to admit themselves into a medical facility. We still do not yet know, though, if the health care system can accommodate an influx of patients. In last Sunday’s press conference, New York Governor Andrew Cuomo says a serious concern for his state (and, by extension, California) is that the number of infected people can severely tax the resources of hospitals.  Alternatively, a resident who tests positive for the virus can ideally self-isolate themselves in the rental unit.  Asking someone to sever ties with the rest of the world, of course, is a request that is hard to swallow, but hopefully heeded.  Tenants who are infected should be told that in the interest of transparency, other residents will be notified that someone in the building has tested positive; however, the name of the inflicted tenant shall remain anonymous.

As the situation surrounding COVID-19 (coronavirus) continues to evolve, the Apartment Association of Greater Los Angeles and the producer of the Income Property Management Expo & Maintenance Mania has been committed to working closely with the City of Pasadena Public Health Department, Los Angeles County Department of Public Health and we have been monitoring guidance being communicated by the Centers for Disease Control and Prevention.

State public health experts have determined that gatherings should be postponed or canceled across the state until at least the end of March. Non-essential gatherings must be limited to no more than 250 people, while smaller events can proceed only if the organizers can implement social distancing of 6 feet per person. Gatherings of individuals who are at higher risk for severe illness from COVID-19 should be limited to no more than 10 people, while also following social distancing guidelines.

As a result, we are postponing the March 24th Income Property Management Expo until Wednesday, October 7th.  The Expo at that time will again take place at the Pasadena Convention Center. In addition, Maintenance Mania will be cancelled until further notice. Additional information regarding the event will be made available as soon as possible.

While the rental housing industry in California has been abuzz about the latest rent control and “just cause” eviction law (more on that below), Gov. Newsom has passed five other rental laws. From extended rent increase notices to the mandatory acceptance of Section 8 vouchers, you won’t want to miss these other hot-off-the-press laws.

On Tuesday, October 8^th, California Governor Newsom signed into law Assembly Bill 1482 imposing rent control and just-cause eviction rules and fees across California. After a long battle within the state, rental properties not currently covered by stricter rent control provisions will need to adapt to the upcoming changes by January 1^st, 2020.

What else can I say, but “here we go again…” A few City of Los Angeles Councilmembers had proposed to further delay the resumption of annual rent increases on rent-controlled units in the City by six months. Since March 2020, for about 3 and a half years and counting, the City of Los Angeles has banned rent hikes under so-called “temporary” and “emergency” measures related to the pandemic. Yet, despite everything and anything being “open for business,” City Councilmember and declared Socialist Democrat, Hugo Soto-Martinez, had introduced a motion to push the February 1, 2024, “freeze” expiration date back to August 1, 2024. The motion was seconded by Councilmember and fellow Democratic Socialist Party member, Eunisses Hernandez. Fortunately, the motion did not make it out of the City’s Housing Committee, but the audacity of the proposal is clear.

However, what did get pushed through the Housing Committee was a proposal championed by “comrade” Soto-Martinez to lower the current maximum rent limitation of 8% to just 4%, a 50% reduction – the proposal was made and passed by the committee without any call for a study of the impacts this may have on housing providers who are struggling today to survive under skyrocketing costs and no rent increases.

Fraud prevention is always a priority in property management, but it’s an even bigger issue now that many (or most) interactions occur online. Plus, fraud is more common than some people realize. According to Kent Simpson, industry principal of screening and fraud solutions at Yardi, about 1-4% of applicants provide fraudulent identification and 4-10% submit fraudulent proof of income.

“One slip can waste your time, money and damage your reputation. The average eviction costs $7,500 per instance,” he said.

Fraud prevention: you only know what you know

By Dwight Kay, Founder & CEO, Kay Properties and Investments

It seems like everyday there is another reason showcasing the reason why more and more investors are choosing to stay debt-free when investing in Delaware Statutory Trust (DST) properties in a 1031 exchange. 

Headlines Show Dangers Surrounding Leveraged Real Estate

Just look at any business or real estate-related publication, and you will see the headlines are full of examples of real estate firms that have been forced to relinquish assets because they succumbed to the lurking liabilities of leverage. In many cases, these firms were led by highly skilled executives with years of experience and files of successful transactions. However, even these world-class real estate firms are creating a case for staying debt-free.

Here are just a couple of examples in the news to illustrate the point:

BY STEVEN GREENHUT

SACRAMENTO – California has in recent years embarked on a remarkable legislative journey that has seen some of the state’s most-onerous land-use regulations rolled back. Lawmakers have recognized that government restrictions are the key reason housing prices have reached absurd levels of unaffordability. Various new laws have provided streamlined “by right” building approvals. They don’t go far enough, but change is welcome.

I’ve called out conservatives, who have often fought housing deregulation measures even as they vow support for property rights and freedom. For example, Huntington Beach’s conservative council majority, in its lawsuit challenging state housing reforms, has trotted out every NIMBY (Not In My Back Yard) and environmentalist platitude one expects from the Left.

By Tim Campbell

In early 19^th-century Britain, a radical reactionary movement embraced by a group known as Luddites rose within the textile industry.  Until the Industrial Revolution, textile weaving was a labor-intensive skilled craft.  Weavers needed years of apprenticeship to learn their trade, and limited production meant skilled craftsmen could demand top wages, at least in terms of working-class incomes.  The advent of industrial machine-based weaving meant unskilled low-paid laborers could produce vast quantities of good-quality cloth at a fraction of the cost of hand weaving.  Perceiving a threat to their livelihood, weavers created the Luddites and, under the command of the fictional “General” Ned Ludd, staged public demonstrations against the new machines; the more radical among them carried out nighttime raids on textile factories, destroying machinery and attacking workers and owners.  Typically for the British government of the time, the movement was repressed with brutal efficiency, using troops under the command of the Duke of Wellington, hero of Waterloo.

Dear Kari, Someone Suggested That I Should I Give My New Tenant a Welcome Gift – What Do You Think?

First Impressions Matter: The Power of a Thoughtful Welcome Gift

By Kari Negri, Chief Executive Officer, SKY Properties, Inc.

Have you been looking to add a special touch to your move-ins? Consider the impact of a thoughtful welcome basket. A warm welcome basket not only leaves a fantastic first impression but also helps your tenants settle into their new home with ease. It’s a small but meaningful gesture that shows you value and care for them. Plus, it can go a long way in making them feel at home in both their new space and neighborhood.  Moreover, if you do it right, it can save you money. Here are some questions you need to answer when putting together the perfect welcome tote bag:

By Brittany Benz

Between showings, lease signings, maintenance, and renewals, there are myriad carefully coordinated tasks that must be completed on-site every day. To be as successful and efficient as possible, property management teams need to operate like well-oiled machines. Unfortunately, most property management teams aren’t working that way today.

In a survey of more than 1,000 property management professionals, 62% cited “operational efficiency” as one of their most pressing challenges. More specifically, they cited the need to ensure smooth handoffs between team members in multi-step processes and to free teams from labor-intensive tasks as particular pain points.

By Lauren Oliver, Opportunity Now

Californians will vote next year whether to pass the Justice for Renters Act, which would reallow rent control ordinances statewide (they’ve done so well in SJ, right?). Here, Daniel Yukelson—Executive Director of the Apartment Association of Greater Los Angeles (AAGLA)—pinpoints why “stabilizing” landlords’ rents would drive up housing scarcity, making home offerings lower quality and rent much costlier for already-struggling tenants. An Opp Now exclusive.

Opportunity Now: The Justice for Renters Act purports that California’s ban on rent control prevents local governances from addressing housing market crises. But you assert the contrary. How can something as innocuous-sounding as “stabilizing rents” actually be harmful for Bay Area cities?

Daniel Yukelson: Rent control and layers of related renter protection regulations literally obliterate the investments in income property made by private citizen owners, who had purchased these properties to own what had traditionally been a secure investment and a means to provide stable income when they retired.

By Max Glassberg

There are many reasons residents choose to leave. They might be buying a home, something many renters aspire to do. There’s nothing you can do to prevent that, nor would you want to: resident satisfaction isn’t about changing people’s life plans, but rather about maximizing the number of renters who would want to renew their leases. In other words, it’s about resident retention.

After all, some residents leave for entirely preventable reasons:

• A bad experience with a rude staff member
• Unresolved maintenance issues
• Unhelpful or unknowledgeable personnel
• A feeling that their input or suggestions don’t matter

Improvements in resident satisfaction can help build long-term relationships within your community, but satisfied renters also add value to the property itself. It’s great to bring in new faces, but your renewing residents are an invaluable asset to your community. Let’s look at 10 strategies you can use to ensure a positive resident experience and create a happier community.

1. CREATE A STRONG NEW-RESIDENT WELCOME EXPERIENCE

A personal touch is always going to help get the relationship off to a good start. It helps residents feel welcomed and positive about their decision to move to your property.

• Write handwritten welcome notes
• Offer new residents a guide to the neighborhood
• Give residents the ability to submit work order requests from their phones
• Allow them to set up autopay so they can pay rent straight from their account without hassle

By Austin Bowlin, CPA

Real estate investors can face challenges as they reach retirement age and focus on estate planning. Often, their real estate holdings have appreciated in value while annual depreciation has reduced the property’s cost basis. Because of this, selling a property before passing away can result in substantial capital gains taxes. However, an investor’s heirs may not be interested in actively managing those real estate properties once the investor has passed away. If suitable, a 1031 Exchange into a Delaware Statutory Trust (DST) may provide a solution to this problem. DSTs allow investors to sell properties without tax consequences, receive potential consistent income from real estate investments, and preserve the eventual step-up in basis upon the investor’s passing.