Billions in California Taxpayer Dollars Needlessly Wasted Documented in Howard Jarvis Taxpayers Foundation Report

This Article Was Contributed by the Howard Jarvis Taxpayers Association

“Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.”

― Dr. Seuss, The Lorax.

Introduction

The consequences of California’s failure to provide meaningful accountability manifest in declines in venture capital investment, tourism, and Congressional representation.  Once again, around this year’s “Tax Day” (e.g., the IRS tax filing deadline), the Howard Jarvis Taxpayers Foundation has once again issued its annual edition of the Follow the Money Report detailing examples of government waste, fraud, and abuse in the past year that total in the billions. 

So, here’s the scenario…let’s assume the unthinkable has happened – there’s been a fire and your building has sustained heavy damage!  At least no one was injured.  It’s going to be okay – you’d purchased insurance with a reputable company and made sure that you insured the building at its full replacement value. 

“Ask Kari!”

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

Dear Kari, I worry about who I rent to.  What is the best way to go about selecting only “great” renters for my property?

It is often said that there are only two times when rental housing providers get into trouble selecting renters: (i) when they are rushing to rent quickly, and (ii) when they take pity upon an applicant. When choosing your renters, always remember to rent to someone who can and will pay your rent on time, tend to their civic duties, and take appropriate care of their homes. As a rule of thumb, it is better to have no tenant than a bad tenant. There is another problem you may face but it is unpopular to state aloud, so I will “not” mention that renting to a family member or a friend is an unbelievably bad idea.

By Christopher Miller, MBA
Specialized Wealth Management

Occasionally, I will refinance a property from my portfolio or get a new loan to buy another – and I am reminded what an awful experience it is.  Gather all your documents together and send them over – then do that every month until the loan closes, answer the same questions multiple times and worry about meeting loan-to-value guidelines.   Your loan broker may check your credit 5 or 6 times, then you’ll need to explain to the lenders why your credit has been checked.  If you’re completing a 1031 Exchange, all this must be completed within a tight timeline.  Everyone else in the deal knows this, so they will sometimes try to “re-trade” you (by raising the interest rate), or the seller may decline to make reasonable concessions.  Partial interest properties can help you avoid many of these issues; this month we will discuss how.

By Jack Humphreville, L.A. Watchdog for CityWatch

Multiple levels of government, including the City and County of Los Angeles, enacted eviction moratoriums because of the adverse financial impact the pandemic had on the health and incomes of families and their ability to pay their rents on a timely basis.  This was an appropriate response as we did not want to see fellow Angelenos tossed out of their homes and onto the streets. 

By Paul Bergeron

In March, the U.S. Federal Reserve approved its first interest rate hike in more than three years, “an incremental salvo to address spiraling inflation without torpedoing economic growth,” reported CNBC.

The quarter-point (or 25 basis points) increase brought the rate into a range of 0.25% to 0.5%.

Along with the rate hikes, the committee also penciled in increases at each of the six remaining meetings this year, pointing to a consensus funds rate of 1.9% by year’s end. That is a full percentage point higher than indicated in December. The committee sees three more hikes in 2023, and none the following year. Market analysts in late March suggested that the next few rate hikes would be for 50 bps. It’s worth noting that the 10-year Treasury Bond yields as of March 28 had doubled since August, contributing to rising home mortgage rates, as well. 

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.

While today’s rental property owners are facing challenges and pressures they have never seen before, there are alternative investment strategies that should be considered.

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

Historically speaking, independent real estate investors, who held for the long-term, walked a relatively straightforward (although bumpy and slow at times) path toward achieving asset appreciation and long-term wealth. This path would often look something like this: an investor would purchase a piece of property that would potentially generate enough cash flow to cover the expenses, including principal and interest on the mortgage, insurance, property taxes, and maintenance costs. Over time, the property would (hopefully) increase in value, income (rents) would rise, and certain tax advantages like the ability to deduct operating and depreciation expenses could be utilized to improve cash flow.

By Daniel Yukelson, Executive Director

Most property owners are unfamiliar with the Mills Act.  The Mills Act (California Government Code, Article 12, Sections 50280-50290) is a California state law that allows cities to enter into contracts with the owners of qualified historic structures. These Mills Act contracts require property owners to make improvements to and take steps to preserve their historical properties and in exchange, they are entitled to a reduction in their property tax bill to help offset the costs of continued preservation of the property.  The Mills Act is recognized by the State of California as the “single most important economic development incentive program in California for the restoration and preservation of qualified historic buildings by private property owners.

Contributed by the Team at LIVABLE

Rent control refers to legislation restricting rental rates in a city or state. The maximum rent that can be charged for a unit and the amount that the rent can be increased per year varies per municipality. Cities use rent control laws to regulate the housing market.

In the United States, rent control is not often used. According to a 2019 Urban Institute report, 182 towns in the United States have rent control laws, all of them located in New York, New Jersey, California, Maryland, or Washington, DC.  In fact, 31 states prohibit municipal governments from passing rent control legislation. However, in recent years, the subject of rent regulation has resurfaced, particularly in cities and states where rising living costs combined with stagnating earnings have produced a housing affordability crisis for middle- and low-income individuals, as well as for seniors living on fixed incomes.  Oregon was the first state to enact a statewide rent control law. The rule, which was passed in March 2019, limits annual rent increases to 7% plus the consumer price index increase.