2021 Contractors Guide - Fall

FALL 2021 A DAILY RECORD PUBLICATION

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CONTRACTORS GUIDE FALL 2021 | A DAILY RECORD PUBLICATION

Buying property in your kid’s college town may be a smart move ............................P6 How should a landlord handle a tenant who hasn’t paid in months?........................P8 Nine questions with a housing economist ...........................................................................P9 A greenhouse made of castoffs donated by strangers..................................................P10 ‘Lean In’ circles help women in construction navigate bias .........................................P14 Is your living room the future of hospital care? ................................................................P18 Survey: 74% of homeowners haven’t refinanced .............................................................P20 How to manage financially for rising home prices ...........................................................P22 Attempt at housing fix for California’s middle class .......................................................P24

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Contractors Guide | FALL 2021

Buying property in your kid’s college town may be a smart move Zach Wichter Bankrate.com Room and board at school can be a major expense for students who go away to get an education. Jeffrey Decatur, a real estate agent with RE/MAX Capital in Latham, New York, near Albany, said he’s seeing a growing trend of parents buying property for their children to live in during school as both a way to cut costs and as an investment. He spoke to Bankrate about this strategy, and talked through what you should think about when considering if it’s right for your family. His responses have been edited for length and clarity.

Q. How common is it for parents to consider buying real estate in their kid’s college town?

A. Parents are realizing it’s a very viable Contractors Guide | FALL 2021

option to purchase rather than doing the room and board thing, because it winds up benefiting all around in the long-run. You get a write-off, you can make a little money in the end, and it elevates your child’s learning. They have a different level of responsibility than the average college student.

Q. Why is this a good strategy?

A. Within five miles of me, there are eight colleges or universities. It’s not super, super common, but considering I’m only one agent in an area of 3,800 agents, I’ve seen it enough that it’s something.

I had a parent buy their kid a house because first-year students weren’t allowed to have a car. So the parent bought them a house so they could keep their car and have a life. That was the first one and I thought, “Ooh, crazy rich 6

people.” But it was actually crazy smart people, because they get the benefits of owning a house.

I started seeing it more and more with medical students and law students.

Their parents wanted to make sure they had every advantage and weren’t distracted by other distractions going to school and they had a place to focus and be quiet and study and what have you.

One of the properties I actually sold three times, and it was to med students each time. That’s when I started realizing that it makes much more sense for someone to buy a house. One of my best friend’s kids, they were paying $6,000 or $7,000 per semester for room and board, that’s $14,000 per year. In our area, you can buy a house for that.

My one friend who bought a house for

their kid, they bought a three bedroom two bath, their kid got their own bedroom and bathroom, and then they rented out the other two rooms. They took that $14,000 per year, which was just a loss, they put that into a mortgage payment, and then they rented out those other two rooms for less than the college was charging for room and board. They made money off of it, and then when it came time for the kids to move on, they have a college rental or they can sell it.

Even if the market had gone down, they’re still saving money and making money, because they’re not lighting $14,000 per year on fire and throwing it out the window with room and board for the college.

When you look at it in those terms, there’s no real losing situation. You could end up making money or you end up saving money on paper.

Q. Are there any drawbacks?

A. I guess you have to have confidence in your kid that they’re responsible and not going to trash the place and don’t need a brick wall, and that they’re going to continue through four years of school. That could be a potential drawback. In the big picture, real estate is never really a bad investment because it’s tangible and historically, yes there’s up and downs in the market, but historically, real estate always goes up.

There’s no real downside in that aspect of things, but it can be more of a hassle when your student graduates, because then you have to sell the house.

I don’t know that it’s for everybody, but for financially astute people, or those who’ve got a few extra bucks to play with, it’s a viable option for them and saving all around.

If your kid’s taking out student loans, you’re not financing their living. You’re taking $60,000 of debt out of that equation for your kid and turning it into an investment.

Q. What should people know if they’re considering doing this?

A. I always tell people to talk with their accountant or financial planner to make sure this makes financial sense.

If it makes more sense for you to pay your kid’s room and board than it does for you to have a rental or investment property, then your accountant will be able to tell you that, and that’s above my pay grade. I know what I do and I know the benefits of that from some of the people I’ve worked with, but each person’s finances are different. Some parents see it as a good sink or swim moment for their kids, giving them the responsibility of having a house.

Q. Anything else?

A. Always consult a professional no matter what the situation is, and make sure that you’re making a comfortable and educated decision. It’s not something to go into lightly. n

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Contractors Guide | FALL 2021

How should a landlord handle a tenant who hasn’t paid in months?

Gary M. Singer South Florida Sun Sentinel

Q: Now that evictions are resuming, I need to deal with my tenant who is over six months behind. I have continued paying the mortgage, but it has not been easy. I need the cash flow from a paying tenant before I end up in foreclosure. Is there anything that I should know? —Peter A: The recent Supreme Court decision about the CDC’s eviction moratorium removed the federal roadblock to evicting tenants who did not pay their rent.

While most tenants who stopped paying did so for valid reasons, the moratorium banned evictions, not paying rent or abiding by the lease agreement.

Tenants still had to maintain the home and pay the rent. When they stopped paying the landlord, the missed payments starting acContractors Guide | FALL 2021

cruing, and their debt to the landlord grew.

Many tenants who relied on this protection face an insurmountable debt due to backowed rent.

Even with the CDC moratorium lifted, several states and many municipalities still have restrictions in place. Before you do anything, you need to ensure that you do not live in one of these jurisdictions.

If you have the green light where you live, you need to follow the traditional steps, such as posting a notice and filing a lawsuit.

You will also need to decide whether to take the more straightforward route of only regaining possession or the longer path of seeking money damages for the back rent.

When making this decision, consider your tenant’s financial situation.

While many people genuinely could not afford to pay their rent due to the COVID-19 crisis, some exploited their situation by not paying rent they could afford.

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Other tenants found steady work recently as the economy reopened.

If your tenant has a regular job or valuable possessions, it may be worth getting a money judgment and trying to collect.

A note of caution: Many landlords have historically felt comfortable filing eviction lawsuits themselves, but the current climate is fraught with traps and obstacles. It would be wise to consult an experienced attorney if you are unsure of what to do.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. n

Nine questions with a housing economist Arianne Cohen Rate.com Our favorite housing economist — yes, we have one of those — is Jenny Schuetz, a senior fellow at the Brookings Institution, who publishes a steady stream of insightful and practical articles on topics like why getting a multi-year lease is a good idea and whom you should blame for high housing costs (spoiler alert: greedy people). We caught up with her to ask our burning questions, which have been edited and condensed: Q: Where should I live?

A: Most people still choose where to live based on where their job is. I encourage moving to a city where you’re not just moving there for one job and one employer. If you turn out to not love your boss or to lose your job, big cities offer some insurance because you can change companies without having to pick up your entire life and break your social networks to move.

Q: What if I can work from anywhere?

A: An awful lot of employers would still like you to be within a couple hours of the metro area. And there’s still strong value to having informational interviews over coffee, and that’s much easier to do where there are lots of companies you’d want to work for. Particularly early in your career, going to a happy hour and getting your name out there still has value.

Q: Where should my partner and I live?

A: You need to be located where both people can find satisfying work. In cities, both members of a couple are able to find jobs, and job switch if needed.

Q: You really like cities, huh?

A: Well, the less you are a sort of “typical” person, the more appeal there is to being

in a place that’s big and diverse. Though people aren’t moving to really small places.

The trend of moving away from the biggest cities like New York, L.A. and San Francisco has been going on for almost a decade now, and a lot of that is driven by cost. But Denver, Nashville and Austin are still big metro areas, with more than a million people, and you’re still going to find a ton of people who have similar ages and education.

Q: So if I’m looking for a mate, should I go to a city?

A: The evidence is pretty strong that cities play an important role in marriage markets, particularly for people who have more years of formal education. People with graduate degrees marry people with graduate degrees, and if you have a law degree or MBA, the chance of finding someone who’s in the age, gender and education categories that you’re looking for is going to be better in a city where there are lots of people who meet those general qualifications.

Q: Wouldn’t online dating make it easier to live anywhere?

A: It’s still helpful in a relationship to be geographically in the same place as the person you’re dating, which is just easier in a large city. So it’s still going to play a role.

Q: Does this advice apply to LGBTQ people?

A: The research is mostly done on 9

opposite sex couples, but we do know that large cities over time have been more welcoming and friendly for gay people and have more of a dating scene. Cities tend to draw people who are looking for a very specific kind of work or social connections.

Q: Do all these trends apply to friends?

A: The same logic applies. Early in their lives, people are looking for friends and companionship and people with shared interests. There are big populations in which to find friends who do the same kinds of things you do, and a wide diversity of activities — you can’t have a major league baseball team without enough people to fill the stadium, right? So that helps with the sorting process.

Q: Aren’t people fleeing the city because of the pandemic?

A: A lot of the pandemic movement that we’ve seen has been people moving across neighborhoods within the same big urban areas. There has not really been movement away from big cities to towns. Typically, married people are more likely to move to the suburbs and have a house with a yard — and a lot of the people who have been moving away are people who were already in that stage. Younger people and single people have been more likely to live in dense urban neighborhoods where there’s a lot of activity and nightlife, and that’s probably still going to be true. n Contractors Guide | FALL 2021

A greenhouse made of castoffs donated by strangers Lisa Boone Los Angeles Times LOS ANGELES – In early December, just as COVID-19 cases were spiraling in Los Angeles, Jennifer Grosso posted a request on her Buy Nothing Facebook group that struck a chord with her neighbors: “If anyone has any old windows or doors they’d like taken off their hands, I’d be happy to come pick them up! I’ve currently got about half of what I need for a greenhouse. All conditions welcome, we’ll put some love back into anything that needs it.

Would rather build from scraps than buy new (pics for reference) TIA!” After nearly a year of illness, isolation and loss, Grosso’s simple request offered people the opportunity to do something they hadn’t in months: meet and make new friends. “People really wanted that sense of connection,” she said. “When I met people curbside, I could tell they really wanted to talk.”

With so many people turning to decluttering to deal with the stress of cabin fever — drop-off centers in Los Angeles were overwhelmed with donations at one point last year — Contractors Guide | FALL 2021

here was someone who was willing to come pick up building materials that were collecting black widow spiders in the backyard.

After Grosso posted her request on Buy Nothing, a Facebook group where people lend and give away items to their neighbors for free, she spent two weeks traversing the 10

streets of Los Angeles as she collected discards at the curb. She started with doors and windows, but after she posted similar requests on Nextdoor and TikTok, she was offered plants, curtains, a sunshade and lights from people inspired by her DIY project.

The more she traveled, the more the quiet 33-year-old manager of pho-

tographers learned about her neighbors and, ultimately, Los Angeles.

She nearly drove off the side of the road at dusk in the steep hills of Mount Washington. She sampled Valerie Campbell’s homemade ice cream through a window in Glendale when she arrived to collect seeds and seedlings. Back home in Atwater, she carried an Ikea bed frame on her back and repurposed it as a raised bed planter.

READY FOR INSTAGRAM And when the greenhouse was finished, it was ready for Instagram.

Grosso and her boyfriend, Trevor Morris, collected more than 75 windows and doors over two months.

They ended up using 41 of them to create the structure — 8 by 15 feet and 11 feet high — and saved 12 to build cold frames, bottomless boxes with a transparent cover to protect plants from the elements.

“We thrive off of interacting with and collaborating with others,” Grosso said of the greenhouse that L.A. built. “Especially within our local neighborhood and community, and that was one of the primary reasons for creating the space — to be able to share it.”

When Debra Ferrara saw Grosso’s request for donations on Nextdoor, she was delighted to add her windows to the collective building blocks. “I had just put new windows in my 90-yearold childhood home in Glassell Park,” Ferrara said. “I saved the old ones hoping they could be recycled.

Now when I look at Jenny’s greenhouse online, I see my windows and it makes me smile.”

Buy Nothing Atwater member Kirsten Eggers had long been meaning to build cold frames with the doors that had been collecting dust in her backyard. But when she saw Grosso’s post, she felt they would be better served as part of a barn-rais-

ing-style project that would commemorate COVID-19 in an uplifting way.

The couple sanded all of the window frames by hand and painted them white, with the exception of a few.

There was one teal window donated

by Buy Nothing Atwater member Tina Van Berckelaer that made Grosso hesitate before painting it over.

Unsure what to do, she did what any millennial and social media denizen would do: She asked TikTok. People have strong opinions about windows, and when Grosso polled her followers, the response was overwhelmingly in favor of preserving the window’s original color.

So in a salute to online crowdsourcing, Grosso decided not to repaint it white.

“The window was a tilt-up model that I think my handyman made for the previous owners,” Van Berckelaer said. “I replaced it with a traditional wooden double-hung window. That window wasn’t bad, but all the other windows had been replaced by jalousie windows, probably in the ‘60s, that really doesn’t go with the style of the house. I hate waste, so I was just thrilled that someone could use something that wouldn’t end up in the landfill.”

The couple’s motivation for creating an outdoor space was utilitarian. The result is that and more.

A STRIKING ADDITION The greenhouse is a striking addition to the yard: a hodgepodge of doors, windows and scavenged furnishings and accessories from the 99 Cents Only Store in Silver Lake. And while the tilted roof gives the dwelling a Modernist architectural vibe, the interior feels homey and quaint with colorful potted plants, macramé hangers, a decorative rainbow film on two of the windows (another TikTok suggestion) and sparkling disco balls.

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Grosso and Morris conceived the idea as a project to do together while they worked from home during the pandemic. (Morris, 34, a production coordinator on the National Geographic documentary series “Trafficked With Mariana van Zeller,” works out of the couple’s one-car garage.)

But once they started collecting scraps from their neighbors and received support on Buy Nothing, TikTok and Nextdoor, the project became more than a long-term DIY project that might sit idle for months or even years. It became a communal neighborhood clubhouse to complete and share.

“So many people were counting on us, we had to finish,” Grosso said.

“We had the peer fuel to keep it going.”

While the couple’s rental house is small at 618 square feet, the backyard is an expanse of grass. Over the last two years, Morris added a fire pit and Grosso created an outdoor lounge with used furniture she purchased on Craigslist. Fortunate to have so much empty space, they wanted to take it a step further and create an indoor-outdoor space for entertaining.

“Our goal was to make something from repurposed materials,” Grosso said. “We didn’t want to use new stuff. So we went on a journey to find things.”

Many of the windows were already on their second and third lives, and during her collection rounds, Grosso learned that some were more than 100 years old, while others were artifacts from life’s most cherished moments.

“It was wonderful to hear everyone’s stories about why they had these random windows,” she said, adding, “one was from someone’s wedding and they wrote everyone’s name continued on next page Contractors Guide | FALL 2021

continued from previous page

down on the frame.” (The mother of the bride donated it because it was used as a prop for seating cards for the wedding and wasn’t needed after the event.)

Inspired by a photo of a repurposed greenhouse on Pinterest, the couple designed the structure by drawing it on graph paper and then laying it out on the lawn like the pattern pieces of a sewing project.

After a series of contractors refused to build the greenhouse due to the unconventional building materials, Morris, who has a background in construction, hired three friends to build the greenhouse over four days. The couple spent about $1,100 on additional building materials, including lumber, screws, cement for the corner beams, canvas, gently used

sliding glass doors from a Habitat for Humanity ReStore, paint and polycarbonate roof panels. Every window and door has a wood frame, which helped in connecting the pieces like a patchwork quilt.

When it came time to furnish the greenhouse, Grosso’s keen trading skills did not fail her: She swapped lemons from her yard for two vintage chairs to go with a hand-painted dining table Grosso purchased for $10 on Facebook Marketplace. The couple recently used the table and chairs for an alfresco dinner inside the greenhouse, where they were illuminated by solar lights. “It was like eating in our own private French restaurant,” Morris said.

“It reminded me of Tavern on the Green,” added Grosso, who grew up in New York.

Now, whenever Grosso looks outside,

she sees her efforts in a greenhouse that can double as a photo studio or, when Grosso and Morris want to entertain, a dining room.

Since finishing the project in February, Grosso has been keeping her contributors up to date through TikTok and text, and when it’s safe she hopes to host field trips to their backyard. The leftovers from this project will be gifted to the people who reached out to them with questions on how to make their own greenhouse.

Grosso said she’s grateful for the chance to connect with so many people during a lonely year.

“When I look at our greenhouse, I see the people we met,” she said. “It has been the silver lining to the entire year.” n

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Contractors Guide | FALL 2021

‘Lean In’ circles help women in construction navigate bias

By ALEXANDRA OLSON AP Business Writer NEW YORK (AP) — Bethany Mayer didn’t want to go back to work after learning that a fellow ironworker insinuated that women like her didn’t belong there.

Jordyn Bieker, an apprentice sheet metal worker in Denver, said she felt uncomfortable that her foreman asked her pointed questions about being gay.

Yunmy Carroll, a veteran steamfitter, said a worker at a training session declared that women in construction are “whores.”

The three women shared their stories Contractors Guide | FALL 2021

over Zoom during a Lean In Circle for Tradeswomen, one of 76 launched nationwide and in Canada this year by the North America’s Building Trades Unions and Lean In, the women’s advocacy group started by Facebook Chief Operating Officer Sheryl Sandberg.

About 700 tradeswomen are participating the program, designed to help them navigate persistent bias and harassment on construction sites, from unwanted sexual advances to being assigned lesser duties like traffic control or fire watch.

It’s a culture that industry leaders are fighting to change in the hopes of 14

recruiting more women into a sector with an aging workforce that faces chronic labor shortages.

As spending on infrastructure rises, construction firms will need to hire at least 430,000 new skilled laborers in 2021, according to an analysis of federal data by the Associated Builders and Contractors.

Right now, only 4% of construction laborers in the U.S. are women, according to the Bureau of Labor Statistics.

“We are really only employing from half the workforce,” said Brian Turmail, the Associated General Contractors of America’s vice president continued on page 16

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Contractors Guide | FALL 2021

continued from page 14

of public affairs, who also spearheads workforce development. “We are struggling with labor shortages with one hand tied behind our back.”

This comes at a time when the pandemic has exacted a disproportionate toll on jobs where women dominate, like restaurant servers and cashiers.

Nearly 2.5 million women lost jobs and stopped looking for work during the pandemic.

Meanwhile, much of the construction industry was deemed essential, sparing it from mass layoffs. For advocates, it is evidence that more women should aspire to construction careers, which start with paid apprenticeships and can lead to unionized jobs with middle-class wages.

The median salary for plumbers and electricians, for instance, is about $56,000 a year, with the top 10% of earners making $98,000. But only Contractors Guide | FALL 2021

about 2% of plumbers and 3% of the country’s electricians are women.

“We see this all the time. When jobs are higher paid, when jobs have more security, when jobs have higher benefits, they often go to men,” said Sandberg, who partnered with NABTU to bring her signature “Lean in Circles” program to tradeswomen after meeting Judaline Cassidy, a New York plumber and union leader who had formed a Lean In Circle on her own in 2017, and later discussing the idea with Liz Shuler, now president of the AFL-CIO. Cassidy often recalls being told to go home and do the dishes when she first tried to join a union more than two decades ago. But her career has also been empowering, and her daughter, Carey Mercer, followed her into the trades.

“You’re always learning something every day. There’s always some kind 16

of challenge that you might run into where you might need to do some math or think about it and take a second a look at it,” said Mercer, an apprentice sheet metal worker.

The good news is that gains already made by women appear to have held steady during the pandemic, in contrast to the Great Recession that hit the industry hard.

The number of women employed in construction had reached a high of nearly 950,000 in 2007 before plummeting to a Great Recession-low of 711,000 in 2011, according to the BLS. It took nearly a decade for their numbers to recover, eventually reaching new highs of about 970,000 at the onset of the pandemic.

But this time, the ranks of women dipped just briefly in the spring of 2020 before continuing their rise — surpassing more than 1 million for the first time in history in April. The share

of women employed in the industry also rose, reaching 13.2% in 2020, compared to 12.5% in 2016.

Since those figures include office roles, it not clear how much of those gains were made by skilled laborers. But the number of women who graduated from NABTU’s pre-apprenticeship programs has also increased, reaching an all-time high of 23% of graduates this year, said NABTU Secretary-Treasurer Brent Booker.

Pre-apprenticeship programs targeting women and minorities have proliferated over the past decade, while several thousand women gather each year for NABTU’s 10-year-old conference for tradeswomen. In sign of their growing influence, the Iron Workers Union became the first construction union to adopt paid maternity leave in 2017.

The most uphill challenge is changing cultural attitudes in the field.

Kelly Kupcak, executive director of Oregon Tradeswomen, said she recently got a call from an apprentice plumber

whose foreman, using racial slurs, said he didn’t care if she was Black or Hispanic because he just didn’t like that she was a woman. That was a year after Kupcak galvanized local unions and contractors to launch an anti-discrimination efforts after another apprentice found a noose at a construction site.

More subtle slights also take their toll.

Mayer, the apprentice welder from the Cincinnati area, had been excited about a new job where a raising gang would erect the columns on a new site. But then she learned about the co-worker who said women shouldn’t be ironworkers. And she was put on fire watch for weeks.

“I don’t even want to go in tomorrow,” Mayer told her Lean-in circle, a group of six women who meet over Zoom once a month.

The women, at the May meeting and in later group texts, encouraged her to be direct and remind her foreman of her skills as a welder. By the time they met in July, Mayer had pushed success-

fully for welding duties.

Patti Devlin, the circle leader, turned the July conversation to a perennial issue: constantly having to prove yourself in an industry where job sites change.

Veronica Leal, a Chicago painter who teaches an apprenticeship program, told the group she has faced that problem for 27 years. At first, she said it was amusing to watch skeptical clients eventually lavish praise on her work.

But four years ago, she was irate when a client at an upscale apartment building told her she couldn’t possibly handle a difficult paper hanging job because she was a woman, and closed the door in her face.

Leal’s supervisor told her to stay put while he called the client. Leal refused, telling her supervisor she would never work with that client.

“I just got so angry. I’ve been doing this for 24 years and I’m done proving myself,” Leal said. n

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Is your living room the future of hospital care?

But hospitals have other financial considerations that are also part of the calculation. Systems that have built sparkling new in-patient facilities in the past decade, floating bonds and taking out loans to finance them, need patients filling costly inpatient beds to repay lenders and recoup investments.

And “hospitals that have surplus capacity, whether because they have newly built beds or shrinking populations or are losing business to competitors, are not going to be eager about this,” said Dr. Jeff Levin-Scherz, co-leader of the North American Health Management practice at consultancy Willis Towers Watson.

Medicare gave the idea a boost in November when it agreed to pay for such care, to help keep non-covid patients out of the hospital during the pandemic. Since then, more than 100 hospitals have been approved by Medicare to participate, although not all are in place yet.

Julie Appleby, Kaiser Health News Kaiser Health News Hospital-level care at home — some of it provided over the internet — is poised to grow after more than a decade as a niche offering, boosted both by hospitals eager to ease overcrowding during the pandemic and growing interest by insurers who want to slow health care spending. But a host of challenges remain, from deciding how much to pay for such services to which kinds of patients can safely benefit.

Under the model, patients with certain medical conditions, such as pneumonia or heart failure — even moderate COVID — are offered high-acuity care in their homes, with 24/7 remote monitoring and daily visits by medical providers.

In the latest sign that the idea is catching on, two big players — Kaiser Permanente and the Mayo Clinic — announced plans this month to collectively invest $100 million into Medically Home, a Boston-based company that provides such services to scale up and expand their programs. The two organizations estimate that 30% of patients currently admitted to hospitals nationally have conditions eligible for in-home care. (KHN is not affiliated with Kaiser Permanente.)

Several other well-known hospital systems launched programs last summer. They join about two dozen already offering the service, including Johns Hopkins Medicine in Baltimore, Presbyterian Healthcare Services in New Mexico and Massachusetts General Hospital.

Contractors Guide | FALL 2021

IN-HOME MEDICAL SERVICES Tasting opportunity, Amazon and a coalition of industry groups in March announced plans to lobby for changes in federal and state rules to allow broader access to a wide range of in-home medical services.

“We’re seeing tremendous momentum,” said Dr. Bruce Leff, a Johns Hopkins Medical School geriatrician who has studied and advocated for the hospital-at-home approach since he helped establish one of the nation’s first programs in the mid-1990s.

Leff and other proponents say various studies show in-home care 18

is just as safe and may produce better outcomes than being in the hospital, and it saves money by limiting the need to expand hospitals, reducing hospital readmissions and helping patients avoid nursing home stays. Some estimates put the projected savings at 30% over traditional hospital care. But ongoing programs are a long way from making a dent in the nation’s $1.2 trillion hospital tab.

While the goal is to shift 10% or more of hospital patients to home settings, existing programs handle far fewer cases, sometimes serving only a handful of patients.

“In a lot of ways, this remains aspirational; this is the early innings,” said Dean Ungar, who follows the insurance and hospital industries as a vice president and senior credit officer at Moody’s Investors Service. Still, he predicted that “hospitals will increasingly be reserved for acute care [such as surgeries and ICUs].”

Challenges to scaling up include maintaining the current good safety profile in the face of rapid growth and finding enough medical staff — especially nurses, paramedics and technicians — who travel to patients’ homes.

The attraction for insurers is clear: If they can pay for care in a lower-cost setting than the hospital, with good outcomes, they save money.

For hospitals, “the financials of it are, frankly, a little tough,” said Levin-Scherz.

Those most attracted to hospital-at-home programs run at or near capacity and want to free up beds.

Even so, Gerard Anderson, a health policy professor at Johns Hopkins University Bloomberg School of Public Health, said hospitals likely see the potential, long term, for “huge profit margins” through “saving a lot of capital and personnel expense by having the work done at home.”

But Anderson worries that broad expansion of hospital-at-home efforts could exacerbate health care inequities.

“It’s realistic in middle- and upper-middle-class households,” Anderson said. “My concern is in impoverished areas. They may not have the infrastructure to handle it.”

Suburban and rural areas — and even some lower-income urban areas — can have spotty or nonexistent internet access. How will that affect the ability of those areas to participate, to communicate with physicians and other hospital staff members miles away? Proponents outline solutions, from providing patients with “hot spot” devices that provide internet service, along with backup power and instant communication via walkie-talkie-type handsets and computer tablets.

SOCIAL FACTORS Social factors play a big part, too. Those who live alone may find it harder to qualify if they need a lot of help, while those in crowded households may not have enough room or privacy.

Another possible wrinkle: Not all patients have the necessary human support, such as someone to help an ill patient with the bathroom, meals or even answering the door.

That’s why both patients and their caregivers should get a detailed explanation of the day-to-day responsibilities before agreeing to participate, said Alexandra Drane, CEO of Archangels, a for-profit group that works with employers and provides resources for unpaid

19

caregivers.

“I love the concept for a resourced household where someone can take this job on,” said Drane. “But there’s a lot of situations where that’s not possible. What If I have a full-time job and two children, when am I supposed to do this?”

The programs all say they aim to reduce the burden on families.

Some provide aides to help with bathing or other home care issues and provide food. None expects family members to perform medical procedures. The programs supply monitoring and communication equipment and a hospital bed, if needed.

“We see the patient in their home setting,” said Morre Dean, president of Adventist Health’s hospital at home program, which serves a broad area of California and part of Oregon. “What is in their refrigerator? What is their living situation? Can we impact that? We aren’t reliant on the family to deliver care.”

Patients are typically visited in their homes daily by various health workers. Physicians make home visits in some programs, but most employ doctors to oversee care from remote “command centers,” talking with patients via various electronic gadgets.

All of that was delivered to James Clifford’s home in Bakersfield, California, after he opted to participate in the Adventist program so he could leave the hospital and finish treatment for an infection at home. It required coordination — his wife had to be at their house for the set-up team even as she was scheduled to pick him up — but “once it was set up, it worked well.”

At home, he needed treatment with antibiotics every eight hours for several days and “one nurse came at 2 a.m.,” said Clifford, 70. “It woke up my wife, but that’s OK. We had peace of mind by my being at home.”

Adventist launched its program a year ago, but it hasn’t achieved the scale needed to save money yet, said Dean. Ultimately, he envisions the hospital-at-home option as “our biggest hospital in Adventist Health,” with 500 to 1,500 patients in the program at a time.

Medicare’s payment decision gave momentum to such goals. But the natural experiment it created with its funding ends when the pandemic is declared over. Because of the emergency, Medicare paid the same as it would for in-hospital care, based on each patient’s diagnosis. Will hospitals be as enthusiastic if that is not the case in the future? Commercial insurers are unlikely to pay unless they see lower rates, since there are already concerns about overuse.

“From a societal perspective, it’s great if these programs replace expensive inpatient care,” said Levin-Scherz at Towers. But, he said, it would be a negative if the programs sought to grow by admitting patients who otherwise would not have gone into the hospital at all and could have been treated with lower-cost outpatient services.

KHN (Kaiser Health News) is a national newsroom that produces indepth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation. n

Contractors Guide | FALL 2021

Survey: 74% of homeowners haven’t refinanced Jeff Ostrowski and Bill McGuire Bankrate.com Many American homeowners are passing up a prime opportunity to lower their interest rates and cut their monthly payments by refinancing their loans, according to a new Bankrate survey.

While the savviest homeowners already refinanced — and some have even done so twice — millions more have yet to take advantage of mortgage rates that once would have seemed unthinkably low. Among homeowners with a mortgage they’ve had since before the pandemic, 74% have not refinanced, according to the survey.

Contractors Guide | FALL 2021

“The overwhelming majority of mortgage borrowers have not yet refinanced, despite record-low rates over the past year,” says Greg McBride, CFA, Bankrate chief financial analyst.

“Cutting the monthly mortgage payment by $150 or $250, possibly more, can create valuable breathing room in the household budget at a time when so many other costs are on the rise.”

The most common reasons homeowners say they haven’t refinanced Among homeowners who haven’t refinanced, the most-cited reason was that they wouldn’t save enough money to warrant a refi. That choice was named by 32% of respondents.

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“You may want to rethink that,” McBride says. “Today’s rates are at levels unseen prior to last year.”

To illustrate one example, if you have a 30-year loan for $300,000 at 4%, your monthly payment is $1,432. Refinancing to 3% would cut it to $1,265, a savings of $167 a month or $2,004 a year. You can use Bankrate’s refinance calculator to see if refinancing will save you money.

Closing costs and fees are the second most-frequently cited objection. Fully 27% of respondents named that as an obstacle. It’s true — closing costs can cost you thousands of dollars, typically 3 to 5 percent of the amount of the

loan. However, if you can cut your rate significantly, you’ll recoup those closing costs.

Another common objection is that refinancing requires too much paperwork, a hurdle cited by 23% of those who have yet to refinance.

“Isn’t saving $30,000 over the next decade worth devoting a few hours of your time?” McBride asks.

Some 14% of those who haven’t refinanced said they plan to move or pay off the loan soon. That’s a valid reason not to refinance because it can take years to pay off closing costs, so refinancing is best for homeowners who plan to keep their new mortgages for years.

And 12% said their credit scores were too low to refinance. That could be another credible reason not to refinance — most mortgage borrowers in 2021 have higher credit scores. Ontime mortgage payments are one of the best ways to boost your credit score, so make sure you’re paying your loan promptly.

Whatever your reason for not refinancing, you should take a closer look, McBride says. “The most-cited reasons for not refinancing might not hold up in this environment of ultra-low rates,” he says.

If you’re concerned about dipping into cash to pay closing costs, consider rolling those costs into the balance of the loan (known as a no-closing-cost mortgage), McBride says.

More than a third of homeowners don’t know their mortgage rate Some 38% of homeowners with a mortgage don’t know their interest rate, including 54% of millennials.

Those who do know their mortgage rate reported a median rate of 3.57%, and an average of 4.57%.

Both of those levels are well above current rates, meaning homeowners can reap significant savings with a refi.

In separate research, mortgage data firm Black Knight says 15 million American homeowners are in position to save by refinancing.

Tracking down the rate on your mortgage should be a simple matter of checking your monthly statement or contacting your mortgage servicer.

If you’re among the homeowners who don’t know your mortgage rate, getting the answer should be your first step.

You’ll need to know your current rate to understand whether you’ll benefit from refinancing at current rates.

Refinance trends vary by generation and income Some 28% of millennials (Americans aged 25 to 40) have refinanced, compared with just 17% of Gen X (ages 41 to 56) and 17% of baby boomers (ages 57 to 75).

Baby boomers are more likely to feel refinancing wouldn’t save them enough money (37%, compared with 29% for Gen X and 21% for millennials).

Gen Xers are most likely to point to fees and closing costs as an obstacle to refinancing (34 percent, compared to 27% of baby boomers and 20% of millennials).

Homeowners with household income over $50,000 are nearly twice as likely to have refinanced (24% have done so) compared with homeowners with household income of less than $50,000 (just 13%).

The most popular reasons to tap home equity Bankrate also asked homeowners with a mortgage what they view as good reasons to tap into their home equity.

Home improvements or repairs led the way, named by 60% of respondents, followed by debt consolidation, cited by 44%. Homeowners could cite more than one reason.

Other reasons cited less frequently include: keeping up with regular household bills (19%), paying tuition 21

or other education expenses (19%), other investments (16%) and taking a vacation (7%).

How to refinance your mortgage Step 1: Set a clear goal. Have a compelling reason to refinance. It could be cutting your monthly payment, shortening the term of your loan or pulling out equity for home repairs or to repay higher-interest debt. You may also want to roll your HELOC into a refi.

Step 2: Check your credit score. You’ll need to qualify for a refinance just as you needed to get approval for your original home loan. The higher your credit score, the better refinance rates lenders will offer you — and the better your chances of underwriters approving your loan.

Step 3: Determine how much home equity you have. Your home equity is the value of your home in excess of what you owe your mortgage lender.

To find that figure, check your mortgage statement to see your current balance. Then, check online home search sites or get a real estate agent to run an analysis to find the current estimated value of your home. Your home equity is the difference between the two. For example, if you owe $250,000 on your home, and its value is $325,000, your home equity totals $75,000.

Step 4: Shop multiple mortgage lenders. Getting quotes from multiple mortgage lenders can save you thousands. Once you’ve chosen a lender, discuss when it’s best to lock in your rate so you won’t have to worry about rates climbing before your loan closes.

Step 5: Get your paperwork in order.

Gather recent pay stubs, federal tax returns, bank statements and anything else your mortgage lender requests.

Your lender will also look at your credit and net worth, so disclose your assets and liabilities upfront. n

Contractors Guide | FALL 2021

How to manage financially for rising home prices

Zach Wichter Bankrate.com If you’re trying to break into the housing market right now, you may find that your down payment fund isn’t going as far as you thought it would. Record-breaking rises in home prices mean the targets you set to save, say, 20 percent of your expected home purchase price may no longer cut it.

Here’s what you need to know about what’s going on in the housing market and what your options are for how to proceed.

Why home prices are likely rising faster than your down payment savings It all comes down to a few factors: limited housing supply and a huge number of motivated buyers are putting pressure on housing prices. Low mortgage rates mean most buyers can afford to borrow more than they otherwise would, which is turning up the pressure even more, and inflation is pushing buying costs up for pretty much everything across the board.

Sellers are rejoicing, but for buyers (low mortgage rates aside) it can be tough terrain to navigate.

“This last year has been brutal, particularly for the first-time homebuyer market,” says Matt Woods, co-founder and CEO of SOLD.com.

Most experts agree that the pandemic has led to a tough market for buyers, but there are signs that things may finally be cooling off.

At any rate, this nearly straight up trajectory Contractors Guide | FALL 2021

for home prices seems fairly unsustainable.

“I think about my four kids, how on earth will my four kids ever be homeowners if this is the conundrum they’re dealing with?”

Woods says.

What you can do if your down payment savings aren’t keeping up There are essentially three ways you can respond if your dream home — or even a barely adequate home — is out of reach.

1. Wait out the home sale market, beef up your down payment Probably the easiest option — because it’s essentially passive — is to just wait for the market to cool down more. Doing that can give you the opportunity to boost your savings, and you may even see home prices come down a little in your area, which means your funds will go farther.

Keep in mind, there are no absolute guarantees in real estate because market conditions are always changing, but if you can’t afford to buy now, it’s probably not a good time to dive in.

“The biggest thing to start with is just to make the decision on whether now is the right decision in terms of buying the home,” says Robert Heck, vice president of mortgage at Morty. “If you have flexibility and time, the options there are a bit more widespread.”

Focus your affordability calculations on your monthly expenses, not necessarily the overall sale price, he says.

Bankrate’s “how much house can I afford?”

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calculator can help you get started.

“This home appreciation phase is waning,” Woods added. If you choose to wait it out you can use the time to invest money in higher-yield — and, admittedly, higher risk — funds to boost your savings more quickly.

“Putting money under your mattress isn’t going to help,” he says. “If you’re parking it in the safest place, you can count on it not helping and not growing. If you’re leveraging the investment opportunities that are out there, the market’s been kind.”

Because the investment market is so hot right now, you may even be able to boost your savings quickly with some higher-risk options. But let’s be clear that money you need in one to three years is not best-suited for riskier investments. That said, if you can stand more risk, consider investing some of your down payment money in: • Stocks, which are arguably the most traditional investment tool and can produce big yields quickly if you buy the right ones at the right time.

• Cryptocurrency, which is kind of having a moment in the investment sphere right now.

Keep in mind that crypto valuations have been a bit of a rollercoaster, so you could majorly boost your savings, or lose your shirt.

You should speak to your financial advisor about your investment options. Other shortterm, high yield products may be available, but you’ll want to decide what works for you with someone who really knows your situation.

2. Alter your home search punch list Another option is to change your housing wish list. Everyone wants to get the best possible house in the nicest and most convenient neighborhood they can afford, but if you can be a little more flexible about exactly where to land, it could help you get into a home faster and more affordably.

“The American dream is this grandiose,’ got to go own my forever home right now’,” Woods says. “My advice is starter homes are great and maybe you need to be as humble as you can possibly swallow just to get into the game.”

Being comfortable with a starter home, or agreeing to look in a broader geographical area will open up more options and may let you look at places where your savings will perform a little better.

“Trying not to get caught up in the exuberance of buying the home, chasing the offer,” Heck says. “Slowing down is important here.”

3. Tap a housing assistance program or go for a nontraditional approach You might be able to benefit from homebuyer assistance grants or some upstart companies that offer novel ways of getting you into a mortgage.

Woods says companies like Unison help folks get into homes by essentially paying all-cash on their behalf and working out the mortgage once the person has moved in. Others strike up equity-sharing arrangements where they contribute to your down payment and then take a larger percentage than a traditional lender when you eventually refinance or sell.

Plus, Woods added, you can always go the “strike a deal with your rich uncle” route, if it’s available to you.

“There are so many different paths you can go down, so try to verse yourself in as many of those as possible,” Heck says. Doing your research will help you chart the best course for your own situation.

More traditional routes for down payment assistance include: • FHA loans, which can be secured with as little as 3.5 percent down.

• VA loans, which can be a great deal for active or retired members of the military and their families • Local and national first-time homebuyer programs Also keep in mind that many lenders will allow you to secure a loan with less than 20 percent down. You may have to pay for pri-

vate mortgage insurance until you build up more equity, but if you can afford the extra monthly cost you’ll still be able to get into a home if your offer is competitive.

Working with a knowledgeable real estate agent remains crucial In this ultra-competitive market, having a knowledgeable agent as a guide is key. Most sellers receive multiple offers, many of which may be above the asking price, so it’s important to make sure you work with someone who really understands the market where you’re looking and can help you make your offer as strong as possible, even if prices are higher than you were expecting.

A good buyer’s agent will also be able to help you figure out how to tailor your search and will be able to adapt if you change what you’re looking for as you rationalize your budget.

Bottom line With home prices being pushed up rapidly by multiple compounding factors, it’s a tough market for buyers. But that doesn’t necessarily mean it’s impossible to buy; it just may take a little extra strategizing. Or, you could take a pause and come back when the market has cooled down a bit more n

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Contractors Guide | FALL 2021

Attempt at housing fix for California’s middle class Andrew Khouri Los Angeles Times (TNS) In hopes of plugging the state’s affordable housing shortage, some California government agencies are purchasing buildings, usually luxury ones, and doing the opposite of most real estate buyers. They’re lowering the rent.

The programs are geared toward middle-income workers — including police officers, teachers and nurses — who make too much to qualify for most traditional subsidized housing but still struggle to afford a place near their work, according to government authorities and the private partners involved.

They hinge on a unique financial model that involves local property tax subsidies. Proponents say the approach makes thousands of units across the state more accessible to those who aren’t high earners — serving the so-called “missing middle” Contractors Guide | FALL 2021

excluded from other affordable housing programs and left behind by a runaway real estate market.

At least three government agencies have launched these programs, bringing rents down by double-digit percentages in places such as Long Beach and Pasadena. In all, the government agencies — known as joint powers authorities — have bought more than 20 buildings, totaling more than 6,000 units.

Questions remain about the long-term consequences and underlying economics — including whether the cities, which must approve the deals and help underwrite the rent reductions, will actually be repaid. Some also dispute whether the rent cuts are large enough to make the program worthwhile.

The Los Angeles City Council is awaiting a staff report on the possibility of joining.

In Northern California, the San Jose City Council declined to participate after city staff concluded “the risks and costs of join24

ing ... outweigh the potential benefits.”

Despite such misgivings, the programs expanded quickly during the pandemic as rock-bottom interest rates made it easier to finance acquisitions and economic uncertainty meant fewer traditional property investors were competitors.

And for some renters able to afford housing that was previously out of reach, they have been game-changers.

“I am able to do my job better,” said René Maher, a fifth-grade teacher in Marin County, whose commute plunged from two hours to eight minutes when she moved into a subsidized development in the bayside town of Larkspur.

The most active authorities purchasing buildings are the California Statewide Communities Development Authority, or CSCDA, and the California Community Housing Agency, or CalCHA, which launched the first program in 2019.

Rent levels vary by income, but in properties they have purchased, building-wide

rent declines have averaged about 10% from what the previous owner charged, with greater decreases seen for the lowest income units, according to Jon Penkower, a managing director at CSCDA, and Jordan Moss, founder of Catalyst Housing Group, the main private company working with CalCHA. Moss said the reductions enable tenants to put more money away for savings, healthcare and education, and save time on long commutes.

Without a commute eating hours of her day, Maher, 25, said she’s able to spend more time with students, as well as work toward her goal of being an administrator.

She said she initially lived so far away from the school because closer apartments were rundown, in neighborhoods that felt unsafe or lacked appliances such as washers and dryers. Now she pays $1,779 for a one-bedroom apartment, on par with her previous one-bedroom, in a complex built in the ‘70s that includes two saltwater swimming pools, a yoga studio and clubhouse.

Her new neighborhood feels safe, and she can walk to the Marin Country Mart shopping center for drinks or the farmers market.

Local subsidies The middle-income programs, as described by backers, are not simple real estate transactions.

Joint powers authorities, which issue and manage bonds on behalf of local governments that join as members, help fund the middle-income programs. They issue bonds and use the proceeds to purchase a property, as well as pay the private companies that arrange the financing and manage the buildings.

Because the authorities are government entities, they don’t need to pay property tax.

Those savings are passed along to tenants in the form of lower rent, while the bonds entice investors with interest payments.

The bonds mature in around 30 years.

Once they are paid off, proponents say the city can direct a sale of a property with no debt, or run the property and take out a loan on the buildings. The proceeds from either of those transactions goes to the city, which should mean the city receives more money than the property tax they lost out on, those involved in the programs say.

Cities can force a sale or refinance as soon as 15 years from the bonds’ issuance,

though that would make it harder to get their money back.

Each project is different, but the joint powers authorities tend to serve households making the upper limits of what is considered low income to those making moderate incomes, with roughly an equal amount of apartments reserved for each income bracket.

To move in, tenants must apply and verify their incomes are within the required bracket.

Tenants who make more and lived in the property before an acquisition by an agency aren’t evicted and can renew their leases to stay as long as they want, authorities said. Once they do leave, those units become income-restricted.

In some cases, after a building acquisition, rent for some units at the upper income limits hasn’t dropped and market rate is being charged, but backers say that over time limitations on rent increases embedded in the programs mean those units should become cheaper than they otherwise would have been.

At times, the programs have also provided subsidized housing for people who could qualify for traditional low-income housing projects, based on their income related to the cost of living in their area. In pricey Marin County, that includes teacher Maher, who benefited from both the typical rent declines from the program subsidy, as well as a special teacher subsidy offered by Catalyst.

For lower- and middle-income renters who move in, the perks of luxury-apartment life are immediately clear in buildings such as Oceanaire, a 216-unit complex in downtown Long Beach, one of six projects that Waterford Property Co., a private real estate investment firm, runs for CSCDA. On nearly two acres of prime downtown land, there’s a resident clubhouse with chilled wine dispensers and a 24-hour fitness center that overlooks a swimming pool.

In the first-floor courtyard, residents can lounge on couches positioned on walkways that jut out like peninsulas into a large shallow pond meant to invoke the Indonesian island of Bali.

Inside, apartments boast 10-foot ceilings, quartz countertops and expansive balconies.

Before CSCDA purchased the building in March, it cost $2,592 a month for 25

a one-bedroom unit and $3,569 for a two-bedroom, according to bond documents. Now, a two-person household earning $75,680 or less — the lowest income bracket served at Oceanaire — would pay $2,102 for a one-bedroom and $2,366 for a two bedroom, declines of 19% and 34%, respectively.

“That is something that is badly needed,” Waterford co-founder John Drachman said.

Still, cheaper rent can be found in many of the cities where the programs operate, raising scrutiny of the affordability the program administrators are marketing.

In Long Beach, the median rent for a one-bedroom was $1,481 in July, according to listings site Apartment List — $621 less than the cheapest one-bedroom unit at Oceanaire, and $1,111 less than the one-bedrooms reserved for those in the highest allowable income bracket.

“Why should we collectively spend ... to create another apartment that’s not even cheaper than what they can get on the existing market?” said Matt Schwartz, chief executive of the California Housing Partnership, a nonprofit that advocates for subsidized housing and consults affordable housing providers.

The partnership analyzed the rent prices CalCHA and CSCDA told bond investors they would charge, and compared them to the average local rents. In most cases, the analysis found that the new rent, even when reduced, was higher than the citywide average for an apartment with the same number of bedrooms.

Schwartz said the analysis suggests many people renting through the programs could find cheaper housing not funded through public subsidy that could otherwise go toward schools, police and other services. He added that the higher quality of homes on offer is “nice, but it shouldn’t be the standard for using public funds in our view.”

How affordable?

Concerns over levels of affordability have also surfaced in some city deliberations.

Before Long Beach approved the Oceanaire deal, the city hired HR&A Advisors, a real estate consulting firm, to analyze the proposed transaction.

In a report to city staff, the consulting firm said that after its initial analysis was shared with CSCDA and Waterford, the project continued on next page Contractors Guide | FALL 2021

continued from previous page manager, the pair agreed to offer more units for those in the lowest income category served by the programs — raising the lowest income share to 40% of units, from the 33% typically offered in the programs.

HR&A still painted a critical portrait of the program after those changes, including over compensation paid to CSCDA and Waterford that it considered excessive and ate into how much rent could be reduced.

In its own memo to council, city staff said that given market fluctuations “there are likely situations where the city and other taxing bodies do not recover foregone property tax or make a profit.”

Staff recommended council members approve the Oceanaire deal but treat it as a pilot and agree not to approve similar projects until the council had time to consider an overarching policy governing such programs.

In a 9-0 vote in February, the council approved that recommendation, and the deal went through.

Contractors Guide | FALL 2021

The San Jose City Council decided the opposite. In May, it voted 11 to 0 to not join any of the established programs after staff raised concerns over loss of property tax revenue, lack of city oversight and how compensation paid to project participants limited affordability to levels it considered “modest.” Though rent is sometimes reduced further, staff singled out the fact that the authorities have capped rent at 35% of area median income, rather than limiting it at the traditional measure of affordability, 30%.

At the upper-income levels, staff wrote, some rent is “essentially market-rate.”

“It’s definitely creative,” Jacky Morales-Ferrand, director of the city’s housing department, said of the programs. “But we want to make sure there is significant public benefit when we forgo property tax.”

The government authorities and private real estate companies said the upper-income units help offset larger declines at the lower brackets, and they defended their fees as reasonable, in line with other affordable housing projects and justified in terms 26

of ongoing management they provide and risk they take in lining up potential deals that might fall through.

“Prior to the close of escrow, the [private firms like Waterford] typically risk $3 [million] to $5 million per deal via pursuit costs that can be lost if the transaction does not close,” Penkower wrote in a rebuttal to San Jose.

Moss, who similarly defended his company’s fees, said that although some of the criticism was unfair, the company has taken some of it to heart and is now capping rent at 30% of area median income, including two projects in Huntington Beach completed with the California Municipal Finance Authority.

Given the historical rise in real estate values, program backers said it’s unlikely a city would not get more tax revenue back than it deferred after it sold the building or kept it and took out a loan on the property.

They also criticized the idea that rent at their properties should be compared to a citywide average. Rather, they said the correct comparison was to look at how

fewer teachers, paramedics and others will leave their communities in search of a place to live that’s not only affordable but also comfortable.

“Yes, there are cheaper apartments in the city of Long Beach, but they are nowhere near the quality of Oceanaire,” Drachman said. “If you are someone who makes less income ... that person shouldn’t have to sacrifice quality.”

Oceanaire is not just a luxury complex.

It’s less than half a mile from the A Line train to downtown Los Angeles, as well as the Pike Outlets shopping center and the Aquarium of the Pacific, a popular tourist attraction with roughly 1.5 million visitors a year.

Tenants who lived there under the previous owner and make too much to qualify under the new income limits can renew their leases, as they can in other program buildings. But unlike those properties, Drachman said Waterford must charge these wealthier tenants a 7% increase upon renewal, a requirement the city wanted to ensure the units turned over quicker.

Occupancy has grown since CSCDA acquired the buildings, to 96% from 70%, Drachman said. Recent lease-sign-

ers include law enforcement officers, city employees and a medical technician.

Sean Rawson, Waterford’s other co-founder, said: “What you can quantify here is that we are passing along significant rental savings to our tenants. Is this the perfect tool for solving moderate-income housing?

No, but is it a tool? Absolutely.”

Victoria Dries and her wife, Nicky, were on their way out of California, to Pennsylvania, when a subsidized apartment at Oceanaire surfaced and had them reconsider.

Dries, an art teacher, and Nicky, who works in school administration, faced a rent bump on their downtown Long Beach one-bedroom, to about $2,650 a month, that would have strained their budget.

Rather than downsize or move into a more rundown place, they planned to move to Pittsburgh “where everything is cheaper” and Dries has family.

“We had already paid for the movers to come get our stuff,” Dries said. Then they found a $2,366 two-bedroom unit at Oceanaire and jumped at the chance to stay. “And when we got in here we just canceled everything.” n

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rent in their buildings differs from rent in similar-quality buildings in the same neighborhood.

Carol Galante, founder of the Terner Center for Housing Innovation at UC Berkeley, said making high-quality apartment communities more affordable — even if they are still more expensive than many older units nearby — could have knock-on benefits. It could encourage middle-income households to move out of older units, freeing those up for people of lower incomes.

The programs institute limits on future rent increases that are stricter than state law. Galante and others said it’s important to consider what might have happened absent an acquisition by the authorities: private investors could have swooped in during the economic recovery and jacked up rents.

Already, landlords across the country are finding they again have power to raise rents aggressively.

Waterford’s Drachman said his company — even in the higher-income brackets — always provides a discount to what market rate would be at the property. And reducing rent at marquee buildings ensures

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Contractors Guide | FALL 2021

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• • • •

8,500 sq. ft. of Elegant Furniture & Accessories Premium High-Quality Mattress Sets Complimentary Local In-Home Design Consultation Name Brands Available

www.MountainEleganceFurniture.com 603 E. First St. | Cle Elum, WA | 509.674.0111 Open Wednesday - Sunday 9:30 AM - 5:00 PM Mountainelegancefurniture@gmail.com Contractors Guide | FALL 2021

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Finally, A Reliable Handyman Efficient + Flawless + Professional = A Handy Guy

Here’s what we can do for you: • Fine woodworking • Custom carpentry • Door repair, replacement • Interior and exterior cosmetic repairs • Shower and tub repair/ replacement • Siding and window repair/replacement • Molding and trim installation and repair • Drywall repair • Cabinet and counter refinishing

Cedo Petrina

• Kitchen and bathroom layout design • Cabinet installation • Window screen repair, replacement • Fence repair • Water damage repair • Demolition • Tile repair • Furniture repair • Organization tips • Interior and exterior painting • Creative solutions to sticky problems

Let’s talk to figure out how we can get your next project completed.

We are licensed, bonded, and insured. Our general contractor # (GC#) is HANDYHG851ML.

AHandyGuy.services

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Cedo Petrina • (509) 929-3789

CusTom Homes oN Your BudgeT! Voted People’s Choice “Best Custom home” Thad Vaughn is the founder and owner of JT Custom Homes, LLC. Thad and his family started JT Custom Homes by building speculative homes and have progressed into quality custom homes and multi-family projects.

Although skilled and confident in all types and styles of construction, our niche is the Northwest mountain cabin.

member of Central Washington Home Builders Association

Thad Vaughn, Owner (509) 674-6370 418 E. 1st St. Suite #2 • Cle Elum, WA 98922

WWW.jtCuStomhomES.Com

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Remember to call 811 before even the simple jobs like: • Installing ground rods or concrete stakes • Building a fence or deck • Installing real estate sign or mailbox callbeforeyoudig.org 144352-1

The days are growing shorter, but your to-do list isn’t. Let us manage your L&I claims and get some of your valuable time back.

We provide help for injured workers and their employers specialized case management that deals with everything from overseeing medical treatment to processing the inevitable paperwork that comes with L&I claims.

We also offer:

immunization & drug screening

respirator clearance evaluations

CDL exams work injuries mask fit testing bloodborne exposures

fit-for-duty exams

pre-employment exams

CAOHC certified hearing exams

KVH Workplace Health KV 702 E. Mountain View Suite 2, Ellensburg 509.933.8830 | kvhealthcare.org Mon-Fri drop-in services 7:30 a.m. - 5 p.m.

kvhealthcare.org

Kittitas Valley Healthcare