Rental Housing Journal Colorado May 2017

Rental Housing Journal Colorado

May 2017 - Vol. 9 Issue 5

2. Can I say "No Pot In My Apartments" When It's Legal In My State?

7. Four Paint Truends for Property Managers this Spring Season

5. Home Prices Up 7/1% In March and Strongest In The West

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Immigrants' Strong Desire for Homeownership Will Shape U.S. Housing Markets

The Delaware Statutory Trust as a Real Estate Investment

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new report says the housing and neighborhood location choices of immigrants will have a significant impact on urban growth in the U.S. for decades to come, particularly as more foreign-born residents seek to own homes in suburban communities, according to new research from the Urban Land Institute's Terwilliger Center for Housing.

Immigrants seeking to own homes as well as those renting homes are increasingly drawn to the suburbs for employment and lower costs, the report says. Homebuilders and developers who can deliver the housing options immigrants want and need stand to benefit in the years to come.

The report, Home in America: Immigrants and Housing Demand examines the influence of immigrants

Robert L. Boggess, CCIM, Registered Representative IREXA Financial Services/Wealth Strategies

I

nvestors who hold highly appreciated real estate assets may be at a stage of their lives when they are seeking more passive investment opportunities. Passive, professionally managed ownership may allow them to concentrate on other opportunities in life that they have always been passionate and now have the time to pursue.

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Passive Investment Characteristics Rather than deal with the Terrible T’s consisting of toilets, trash, and tenants many long-time investors are in search of the Terrific T’s which give them time, travel, and teeing off.

To accomplish these goals, some seasoned investors have turned to real estate investment strategies such as buying real estate with ownership forms like, Tenants in Common (TIC) property or Delaware Statutory Trust (DST) property via an Internal Revenue Code (IRC) section 1031 exchange, thereby deferring tax on the relinquished property’s capital gain.

TIC 1031 and DST 1031 exchanges have long permitted investors to own institutional quality, professionally managed properties occupied by established tenants. They are offered on a turnkey basis with financing and management in place. Most investors continued on page 5

continued on page 4

How To Attract Renters With Premium Bicycle Parking Amenities Bicycle commuting is on the rise, especially with Millennials, and one sure way to attract their attention is by offering the best in bicycle parking amenities and bicycle racks.

By Robert Caston

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ccording to the League of American Bicyclists, bicycle commuting has risen 62%. In bike friendly cities that have invested in their bicycle infrastructure and added safer bike lanes, the number of bicycle commuters has risen by an impressive 105%!

There are 62 million Americans who ride a bike today. Bicycling is particularly popular with Millennials,

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Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

Rental Housing Journal Colorado

Can I Say "No Pot In My Apartments" When It’s Legal In My State?

By John Triplett, Rental Housing Journal

O

regon Governor Kate Brown this month signed a bill that prohibits marijuana retailers from keeping or sharing customer's personal information. According to reports, she said she was concerned about the Trump administration's future actions when it comes to the legalized pot industry which employs 13,000 people in Oregon. So when pot is legal in a state, what issues does this present to property managers and landlords of rental properties?

Property managers are often confused and seeking to better understand how to handle the issues of legal marijuana and medical marijuana when it comes to tenants and rental housing in their states.

Laws are changing all the time in many states as voters approve different levels of permission when it comes to marijuana. This leaves property managers trying to figure out what should be in their leases around the issue.

You may be able to ban smoking, but do you really know what your tenants are eating or growing in their apartments? Do you really want to know if they are good paying tenants?

Rental Housing Journal did a recent interview with Seattle, Washington attorney Bret Sachter, an expert in tracking the progression and transformation of marijuana laws, to discuss some common questions property managers have about marijuana and tenants.

“I’ve been asked this a lot,” Sachter said, “but it does not come up as often

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as you might think. The overarching issue here is that, with few exceptions, people can do what they want to protect their property, even if the prohibited behavior is not illegal. You can prohibit smoking, prohibit pets, but with marijuana it’s much easier because it is federally illegal. So you can pretty much prohibit it if you want to no matter what, even medical marijuana,” Sachter said.

4 questions about pot, tenants and apartment leases Sachter says in terms of Fair Housing issues, and the U.S. Department of Housing and Urban Development (HUD) it is a situation where HUD wants it in the lease that marijuana is illegal but enforcement is another issue, he said. It is not so much that HUD wants landlords to evict over marijuana, but that you have something in the lease language that allows for eviction in the instance of marijuana use on the property. “So it is pretty clear as far as HUD is concerned,” he said. Here are his answers to four questions on pot and apartments.

No. 1 - Tenants with a disability and medical marijuana Question: If a tenant comes in and says I have a disability, here is a note from my doctor, I use medical marijuana, which is legal in this state, and I want to rent your apartment. Can a landlord prohibit that?

Answer: “A landlord can absolutely prohibit that because marijuana is illegal under federal law.” The landlord can say, “I understand our state allows

medical marijuana but as it is still a Schedule 1 drug and I prohibit it on my premises.”

No. 2 - Marijuana is legal in my state - but what does the lease say?

Question: What if a tenant says marijuana is legal and they should be allowed to use it?

Answer: “If your lease prohibits smoking and prohibits use of illegal drugs, then the legality of marijuana at the state level is irrelevant because under federal law marijuana is illegal. If your lease does not have those types of clauses, you should talk to an attorney in your state or city to find the best solution for your lease.”

There is no law about reasonable accommodation for marijuana users, federal laws do not require it. As far as the federal government is concerned it is not ok.

“One thing I would say, and it is important, I would encourage landlords just to make everything clear,” in the leases, he said. “Clarify in a lease that you must abide by all laws state and federal.”

That is the case in residential. He said it can be different in commercial.

(There was a commercial case in Oakland, California and you can read more about it here.)

“But In residential it is not as tricky, and I am speaking very generally here,” Sachter said. “The states may have their own thing going on with legal marijuana laws, but it is still federally illegal. Make

it crystal clear in your leases is my best advice,” he said. “How can you attract tenants in a state where it is legal yet protect the owners of the property? You cannot have it both ways.”

“I know in Seattle there are Airbnb bed and breakfasts that specifically market themselves accordingly, as part of marijuana tourism to come and stay in our place where it is legal.” But if a property manager doesn’t want that going on, then they have to be up front in the lease.

“If your tenant is Airbnbing to a tenant who is then using marijuana – well if you can’t catch them you cannot do anything about it. You have to prove they are doing this. They are going to be using marijuana regardless of what the lease says.”

No. 3 - What if the tenant using marijuana is a well-paying, good tenant?

“Landlords can certainly put a nowaiver clause in the lease. If I say, ‘Here is a list of prohibited things’ and if you do these prohibited things in the lease, you are subject to eviction,” he said.

“However, any time I waive any of these things does not constitute an overall waiver. It basically means you should not ever do it again,” he said.

“Just because you get away with it once, does not mean you get away with it every time,” Sachter said.

No. 4 - Can I say 'no pot in my apartment?"

“Usually if you say, ‘No pot in my continued on page 8

Rental Housing Journal Colorado · May 2017

Rental Housing Journal Colorado

Attract Renters with Premium Bicycle Parking ...continued from page 1 that huge demographic born between 1980 and 2000. In fact, in a surprising trend, that group is now waiting longer to obtain their driver’s licenses.

According to AAA, the number of cars also purchased by people 18-34 dropped almost 30%.

How are they getting around instead?

Bicycles, trains, buses, Ubers and ZipCars.

Not only are Millennials interested in the benefits of bicycles, but so are municipalities. City administrators are building up their bicycle infrastructure to encourage more bicycle riding and less automobile driving.

Transportation planners are adding more protected bike lanes, bike share programs and bicycle racks. Many have adopted a “road diet” planning strategy that places less emphasis on roads and designates more funds for alternative means of transportations, especially bicycles.

New York City’s Mayor Bill deBlasio spent $100 million on bike lanes and making city streets safer for bicyclists.

In the next decade, Seattle plans to spend $1 billion on their bicycle infrastructure. Los Angeles created a “Green Streets” program to add more bike lanes.

To cover their investment in bicycling, most cities now are rewriting their zoning codes and requiring more short-term and long-term bicycle racks for parking. In fact, new or renovated apartment buildings in some cities are now required to add indoor bike rooms.

But rather than consider long-term bike racks for apartment buildings as an extra cost, the great benefit to landlords of adding a bike room is that this space can be a highly-marketable commodity to attract tenants.

For example, the City Tower in Brooklyn showcases their bike room located on the 19th floor so that cyclists can park their bikes in front of spectacular city views.

Best practices for bicycle parking According to the Association of Pedestrian and Bicycle Professionals there are two forms of bicycle parking - short-term and long-term.

Short-term bicycle parking is achieved by the installation of bicycle racks in front of retail stores or restaurants.

Typically this would consist of u-shaped racks or wave bikes racks. This parking is generally considered to be for a limited time, say 1-4 hours.

Long-term bicycle parking is for tenants or employees who park their bicycles overnight or for several hours.

The ideal place for long-term bicycle parking is a secure, indoor bike room.

One of the big challenges that bicycle owners face today is the rising number of thefts. According to the FBI, more than one million bicycles are stolen every year. Thieves have become more adept on cutting through even the best of locks. Combine this with the rising cost of bicycles, especially bicycles with new lightweight carbon frames, and there is a real challenge for building owners to provide a secure means for residents to lock their bikes.

Dragging a bicycle up a flight of stairs to an apartment or on an elevator is not a pleasant experience. Bicycles scratch or dent walls. Dirty and wet bicycles create a hazardous messes on floors.

The best solution is to provide a bike room. Locate these bike rooms on the first floor to provide easy and quick access for bicyclists.

However, apartment space is at a premium. The average bicycle is 6 feet in length. Owners face the challenge of providing adequate parking in a limited space for a large number of bicycles.

There are new types of bicycle racks, such as the Uplift Bike Dock floor rack offered by The Park and Facilities Catalog, that offers high-density parking to maximize square footage.

Another solution is to consider vertical bike racks such as the DoubleUp offered

by The Park and Facilities Catalog. For these bike racks, the bicycles are loaded standing up and suspended on hooks.

They come available as either wall mount bike racks or freestanding bike racks.

This helps to utilize the floor to ceiling space for bike storage as well.

Best practices for bike room parking is to provide at least a 6-foot minimum space for aisles on the sides of the bikes or down the center.

For vertical, wall-mount bike racks, a floor to ceiling space of 92-inches is recommended. There should be at least a 36-inch aisle space out from the handlebars and a total of 75 inches of space extending from the wall.

To provide the best in security, the APBP recommends that there be three points of locking contact with a bicycle – the frame, front wheel and the bike rack. A hardy U-lock is generally the best type of lock to use. Be sure the cyclist has the ability to pass the lock around those three points of contact.

How to add extra appeal to any bike room or bike storage area If a landlord wants to really create an appealing bike room or bike storage area, there are now products available that any cyclist would truly appreciate.

Adding these amenities creates even better marketing opportunities that will appeal to Millennials and all bike owners.

metal frame. The tools are connected by a tough airplane-grade wire that allows people to make repairs or adjustments to their bike, but keeps the tools secure for use by others. Some bike repair stands also come with a wheel chock to hold the bike upright.

Public Bicycle Pumps – there’s nothing more frustrating than walking out to your bicycle and finding a flat tire or tires with low air pressure. A landlord would be of great service in this case by providing a public bicycle pump.

Bike Wash Station – as you can imagine, bicycles get dirty from roads, snow and rain. These handy bike stations help remove the grime and dust off bike frames and gears.

Vending Machines – here’s a way for landlords to generate extra revenue.

Provide a bike vending machine with tire tubes, patch kits, etc.

Signage – for a busy bike room, add a sign that clearly states the rules. The message can also include tips on how to properly lock a bike, local maps, etc.

Bicycling is booming in America today. Millions of people now prefer getting around on a bicycle. For a small investment, savvy landlords will see this as a big opportunity to add bicycle parking amenities to make their property more attractive to this massive market.

Here are a few: Bike Repair Stations – these public bike repair stations come with a variety of handy tools attached to a sturdy

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Rental Housing Journal Colorado

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Immigrants Strong Desire ...continued from page 1 in shaping urban growth patterns, particularly those who have entered the U.S. since the Great Recession (since 2010, the number of immigrants from Asia has surpassed those from Latin America).

"Immigrants have helped stabilize and strengthen the housing market throughout the recovery," Terwilliger Center Executive Director Stockton Williams said in a release. "Immigrants' housing purchasing power and preferences are significant economic assets for metropolitan regions across the country. This suggests the potential for much more growth attributable to foreign-born residents in the years ahead," he added.

Potential impact on apartments and multifamily housing "However, a substantial share of expected immigrantdriven homeownership demand may be met by the resale of existing homes in established middle-income and highend suburbs," the report says.

"The sellers of those homes (likely including a number of higher-income, downsizing baby boomers) could then constitute a new source of demand for smaller single-family homes and townhouses, condominiums, and multifamily rental apartments—in suburbs as well as in cities."

Among the key findings from the report on immigrants: • Without growth of the foreign-population, regions with strong housing markets such as San Francisco would not have recovered as quickly following the recession; and markets that continue to struggle in the recession's aftermath such as Buffalo would

have experienced even weaker growth.

• Immigrants have strong aspirations for single-family homeownership, and homeownership rates for immigrants rise with their length of time in the U.S. This suggests that immigrants will be a key driver for owner-occupied housing for years to come.

• Immigrants seeking to own homes as well as those renting homes are increasingly drawn to the suburbs in search of employment opportunities, lower-cost housing and a higher quality of life. Suburbs are home to high-income, high-skilled immigrants as well as lower-income, lesser-skilled immigrants.

• While immigrants represent a key source of demand for new housing, a substantial share of immigrant housing demand will be met through purchases of existing homes. Sellers of these homes – many of whom will be baby boomers seeking to downsize – will create a strong market for smaller units.

• Urban areas experiencing significant immigrant population growth should explore how to best accommodate immigrants and leverage the positive effect they have on the housing industry and economy. Investments in housing, retail, recreational and cultural amenities, as well as social assistance and education programs can help forge a strong connection between immigrants, neighborhoods, and the greater community. continued on page 7

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Rental Housing Journal Colorado · May 2017

Rental Housing Journal Colorado

The Delaware Statutory Trust...continued from page 1 have been able to accomplish these forms of ownership in a tax-deferred manner through a 1031 exchange.

Delaware Statutory Trusts Though the Delaware Statutory Trust (DST) is not a new investment vehicle, inherent weakness in the structure of the TIC form of ownership discovered during the Financial Crises of 2008, has made the DST a viable investment vehicle for passive 1031 exchange investors as well as direct investors.

DSTs are derived from Delaware statutory law as a separate legal entity created as a trust, which qualifies under IRC section 1031 as a tax-deferred exchange. In 2004, the IRS blessed DSTs with an official Revenue Ruling about how to structure a DST that will qualify as replacement property for 1031 Exchanges.

The Revenue Ruling (Rev. Ruling 2004-86) permits the DST to own 100 percent of the fee-simple interest in the underlying real estate with no IRS imposed limitation as to the number of investors who may participate as beneficial owners with a fractional interest in the property.

Investors who are familiar with TIC investment strategies may see some similarities to the DST concept; however, it is important to understand the differences. While a TIC may have up to 35 investors, each owning an undivided, pro-rata share of title to the property, a DST may have many more investors, with each investor owning a beneficial interest in the trust which, in turn, owns the underlying asset. A major benefit is that more investors means lower investment requirements. DSTs are only available to accredited investors.*

In a TIC investment there may be up to 35 separate signers on the loan. In a DST Structure, there is only one lender, the sponsor, who is the underlying responsible party.

*Accredited Investors are individuals whose net worth is more than $1 million and / or earn annual income of $200,000. Accreditation for entities means the entity's assets are more than $5 million and / or each entity member must be an accredited investor as an individual.

DSTs Pose Risks DSTs are not without risks. As with any type of real estate investment, investors may be subject to high vacancy rates and loan defaults. DSTs are also not sole-ownership investments. A DST is a passive investment made up of multiple owners and ultimately controlled by the master tenant, the sponsor. It is important for investors who may be considering the DST strategy to consult with an experienced investment professional and to obtain competent legal advice and tax advice.

Upon thorough evaluation, the DST structure may be a viable investment alternative for qualified real estate investors. But only your tax adviser and lawyer can tell you if it's right for you.

Robert L. Boggess, CCIM is the President/ Chief Strategist with IREXA Financial Services / Wealth Strategies which provides Strategic Tax Planning to owners of real estate. Our goal: To help you keep more of what you make by only paying the taxes you are legally obligated to pay. For a free tax mitigation evaluation and strategy contact Bob at: 206-548-1031 or rboggess@irexa.net.

How DSTs Work The real estate sponsor firm acquires the property under the DST umbrella and opens up the trust for potential investors to purchase a beneficial interest. The investors may either have their accommodator deposit their 1031 exchange proceeds into the DST or the investor may purchase an interest in the DST directly.

DST investors may benefit from a professionally managed, institutional quality property. The underlying property could be a 300-unit apartment building, a 50,000 square-foot medical office property or a shopping center leased to investment-grade tenants. The possibilities are numerous.

Most DST investments are assets that the average individual accredited investor, but for the opportunity to buy in to a fractional share, could not otherwise afford. However, by joining with other investors, they can acquire this type of asset.

DST vs TIC Ownership There are two benefits that the DST structure offers over the TIC concept.

One is that because a DST is not limited to 35 investors, the minimum investment may be much lower, often as low as $100,000. The second advantage is that in a DST the lender makes only one loan to one borrower, the DST Sponsor.

the use as 1031 Replacement Property. The DST has certain limitations in and of itself and the use of DSTs to hold real property may limit the ability to properly manage underlying assets while continuing to preserve an investors tax deferrals. Prospective investors should consult with their tax professionals before investing.

Securities offered by SANDLAPPER Securities, LLC (member FINRA/SIPC), 800 East North St, 2nd Floor, Greenville, SC 29601, 864.679.4701.

Robert L. Boggess is an independent Registered Representative of SANDLAPPER Securities.

SANDLAPPER Securities and IREXA are not affiliated firms.

No offer to buy or sell securities is being made herein. Investments in DST properties are made to Accredited Investors only via Private Placement Memorandum (“PPM”). Prospective investors must read and understand the PPM in its entirety, including all risks which include but are not limited to the possibility of complete loss of principal investment. Investments, income and success are never guaranteed. DSTs are illiquid in nature and investors may not be able to liquidate their position prior to completion of the program. The DST structure has been recognized as a suitable structure with the IRS for

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Rental Housing Journal Colorado

Four Paint Trends for Property Managers this Spring Season

By Jud Walford, Pro Paint Merchant, The Home Depot

M

aking sure your property’s design is up-to-date and current is a major task for property managers, and often the simplest updates like a fresh coat of paint can be overlooked as a solution. Updating a paint scheme is relatively affordable compared to other renovations, and the effect is has on the overall feel of your property can help improve the mood for current residents and attract new ones. Set a new ambiance this spring season and check out these color trends and palettes to give your property a new veneer.

1. Start with the Basics: Primer When overseeing any paint job, ensure your team is using the correct primer.

Priming is a key component when painting interior and exterior walls to increase adhesion, enhance the paint sheen, retain a uniform appearance and block stains. Water stains and knots in bare wood are a few examples of stains that may require specific formulations.

Also more vibrant paint colors may require a gray primer or one tinted with a small amount of the topcoat color to improve coverage.

The newest developments in this area are primers that kill odors and mold. If previous residents had pets or smoked inside, the scent will probably seep into the walls. In addition to a thorough cleaning, odor-killing primer and a new paint job may be necessary before new residents move in. Certain brands offer mold-killing primers that contain a microbial registered with the Environmental Protection Agency (EPA) that destroys mold, mildew and other fungal organisms, as well as preventing future growth. If your property has issues with mold growth, these primers can be a lifesaver.

2. Neutralize Your Color Palette Neutral color combinations continue to dominate in multifamily homes, because they allow residents to put their own personality stamp on the interior.

Grays remain a top choice and are often paired with other light neutrals, such as taupe, for a more elegant feel.

Colors like white, off-white, beige, soft blue or black are trendy for areas where residents seek refuge and comfort, like bedrooms and family rooms.

technology that can duplicate any color, no matter the brand. Keep this in mind if additional touch up paint is needed.

Overall, it's important to stay up on the trends and work with your the maintenance team to ensure the correct materials are used. From new color palettes to premium primers, these updates are essential for resident retention and property aesthetics.

Jud Walford, Pro Paint Merchant, The Home Depot

In common areas, picking the right color combination is becoming more and more important, especially for Millennials who seek amenity spaces to relax and socialize. Those areas provide opportunities for property managers to get creative with different color combinations.

Every year major paint companies release their trend colors of the year, such as BEHR’s Color Currents, which are interchangeable and can be mixed and matched for every space. This year, palette trends range from ‘comfortable’ colors such as muted pastels to ‘composed’ colors featuring a mix of mysterious earth colors and deep jewel tones. There is also a ‘confident’ palette with bold options like citrus-inspired yellow and mid-century modern orange tones ideal for an accent wall.

This is a great guide to consult before embarking on a property-wide project.

3. Keep Health in Mind Many residents, especially those with children, may have concerns about the chemicals used on the property. One often cited concern are Volatile Organic Compounds (VOCs), which are emitted as gases from certain solids or liquids, notably paint. According to the EPA, VOCs include a variety of chemicals, some of which may have short- and long-term adverse health effects.

Remember to make sure painters are using low and/or zero VOC products all jobs on the property. This will help maintain healthy indoor air quality for residents.

4. Tech out Technology can help visualize and bring to life paint jobs both large and small. Use The Home Depot Project Color App to visualize, match or find the perfect colors for the property. The app allows phones to take pictures of actual spaces and display them with all of the new colors to find the perfect fit.

Once a color is chosen, bring a sample to the store to make sure you get the best paint match. The Home Depot now offers digital color matching

Jud Walford is a Pro Paint Merchant at The Home Depot. Jud has been with The Home Depot for more than 25 years and has over 34 years of experience in home improvement. He started working in The Home Depot stores in the gulf region as a Store Manager, District Manager and Regional Merchandise Manager. He then worked as a merchant in the regional buying offices prior to becoming the Pro Paint merchant for the last three years.

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Immigrants Strong Desire ...continued from page 1 • Just as housing demand by immigrants was a key factor in tempering the worst impacts of the housing collapse, this demand is now helping to build housing market momentum. Demand for homeownership and for single-family housing, as well as the continued growth of both urban and suburban communities throughout the country, will depend on the trajectory of U.S. immigration policy.

The findings in Home in America are drawn in part from analyses of the housing and neighborhood preferences of immigrants in five metropolitan areas that represent different types of immigrant gateways: • San Francisco – a major continuous gateway, with a large and sustained immigrant population throughout the 20th century and into the 21st century (other examples are New York City, Chicago, Boston) • Houston – a post-World War II gateway that has attracted large numbers of immigrants since the mid-20th century (other examples: Los Angeles, Miami, Washington, D.C.) • Buffalo -- a former gateway that was a major entry point in the early-to-mid-20th century due to its strong manufacturing economy (other examples: Cleveland, Detroit, St. Louis) • Minneapolis-St. Paul -- a re-emerging gateway marked by a renewal of immigrants at the end of the 20thcentury into the 21st century (other examples: Baltimore, Denver, Seattle); and • Charlotte – a major emerging gateway that started experiencing a wave of immigrants at the beginning of the 21st century (other examples: Atlanta, Las Vegas, Orlando) Home in America notes that foreignborn population growth in most of gateways outpaced overall population growth between 2006 and 2014 (the time period from just prior to the housing market collapse through the housing rally). Emerging gateways, which experienced strong overall population growth, were the only exception. The report also looks at the neighborhood choices of immigrants within the five metro areas, focusing on five categories of suburbs (typologies developed for ULI by RCLCO): • Economically challenged suburb – characterized by lower home values and little population growth • Stable middle-income suburb – having a wide range of home values, usually more centrally located

oped mainly in the past 15 years, typically adjacent to established high-end suburbs; and • Greenfield value suburb -- close to the edge of metro areas, often adjacent to stable or economically challenged suburbs, more affordable than greenfield lifestyle suburbs.

The differences in where immigrants are locating in the five cities is an indicator of how they could influence future growth within these markets, the report says.

• In San Francisco, they are spread across nearly all types of suburban communities, with the highest percentage, 35 percent, living in economically challenged neighborhoods.

• In Houston, the largest share of immigrants, 39 percent, live in stable middle-income suburbs, followed by 29 percent in economically challenged suburbs.

• In Buffalo, 30 percent live in established high-end suburbs (a greater share than the native-born population) and 27 percent live in urban neighborhoods.

• In Minneapolis, the highest percentage, 32 percent, live in economically challenged suburbs, followed by 27 percent in stable middle-income suburbs.

• In Charlotte, 27 percent live in economically challenged suburbs.

Nineteen percent live in stable-income suburbs and an additional 19 percent live in established highend suburbs.

Home in America points out that the presence of immigrants could help boost revitalization in economically challenged suburbs; sustain the success of stable middle-income suburbs; and contribute to the growth and diversity of established high-end suburbs.

"If recent shifts in immigration flows continue, an increase in higher-income immigrants – including rising numbers from China and India – could accelerate the demand for homeownership among the foreign-born population," the report says. "Without sustained immigration, the housing market could weaken and in many markets the impact could be dramatic."

About the Urban Land Institute The Urban Land Institute is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the institute has more than 40,000 members worldwide representing all aspects of land use and development disciplines.

• Established high-end suburb – having high home values, established development patterns, often near employment centers • Greenfield lifestyle suburb – close to the edge of metro areas, devel-

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Delaware Statutory Trusts ...continued from page 1 apartment’ and you find a tenant using marijuana and you haul them into court, more than likely the judge is going to say, ‘Have you stopped?’ to the tenant and ‘Are you going to do it again?’ and the tenant is going to say ‘No.” And then judge will say, ‘Ok, dismissed.”

To put a more legalistic term on it, usually a court will be in favor of “allowing the tenant to cure the defect,” rather than evict for most things like that, Sachter said.

Technically, in Washington, a landlord would serve a 10-Day notice to comply or vacate with the terms of the lease. This process, therefore, gives the tenant a chance to “cure” the violation before the landlord can evict. Check your local state laws on this.

What one experienced property manager says about pot Sam Driver, Product Director for Buildium.com, and an experienced property manager at the property management software company, said as far as marijuana use in apartments, due to the newness of the legislation, the federal laws that supersede state and county laws, and liability concerns, it is not a topic that comes up a lot - yet.

“Generally, the safest solution is to choose the most conservative pathimpose a no-smoking policy, which can in some cased cover outside areas, and a crime provision that includes local, state and federal laws. In many states, there are setbacks from doors, and it is particularly important if the building is a place of work which a multi-unit apartment building certainly is. So your lease should contain a provision explicitly banning smoking and illegal activity. Because the feds still outlaw it, this should be sufficient,” Driver said.

“This of course only covers the smoking angle. If a resident consumes it in another way, you'd likely never know,” he said.

Growing marijuana could put a power load on your apartments “As for growing, that's less clear. But in general, unless the electrical system is designed for it, the loads grow lights put on the apartment unit could be excessive. I'd consider a reasonable use clause that specifies all high load equipment, including lights, air conditioners and any kind of pump be approved by you.

“This would put you in a position to take action if they are putting too much load, without specifically calling out the use of the equipment. Pumps are a good area for monitoring, because of the intermittent load, they trip breakers, and anyone who is using a hydroponic system would need several,” Driver said.

What if I want to market my apartment to marijuana users?

“If, however, you wanted to roll the dice and market to this crowd, assuming your state laws allow it, remember that the federal laws would cover any bank deposits from proceeds," Driver said.

“In this case, you'd be able to do it, assuming no federal intervention, in compliance with local laws. No insurer would provide EO&E (errors and omissions excepted) insurance to you, and you wouldn't be able to deposit any funds into a federally-accredited bank.

So you'd have to self-insure, and run an entirely cash business, but you could do

it, risking only federal enforcement.

“The big question is, 'Would the premium rents be worth the risk of forfeiture?' If you run afoul of the federal drug laws, the asset seizure possibility is a huge risk. You could lose the building.

“If you're managing other owners' properties, then you'd be risking their assets even if you used different leases, unless you kept fully separate books, bank accounts, and co-mingled nothing. So I'd say it would be all-ornothing," he said.

“The timing is tricky, too. Leases contain a provision that stipulates that the contract is in force in a specific jurisdiction. If they change the laws rendering your lease out of compliance, what happens during the remaining time of the lease? Is it invalidated? Or does the contract remain in force until it expires?

“Good questions for your lawyer,” Driver said.

How to keep up with status of pot laws in the different states ProCon.org, a 501(c)(3) nonprofit nonpartisan public charity, provides professionally-researched pro, con, and related information on more than 50 controversial issues from gun control and death penalty to illegal immigration and marijuana laws across the country. "Using the fair, FREE, and unbiased resources at ProCon.org, millions of people each year learn new facts, think critically about both sides of important issues, and strengthen their minds and opinions," according to the company's website.

Here are where the pot laws stand for medical and recreational marijuana in several states, how it was passed, and what is permissible in the possession limit, according to procon.org. You can see their excellent full chart here state by state. Keep this link as they update the ever-changing pot laws in the different states.

Here are what some some states are doing with links to more information on each state's pot laws.

Oregon: Ballot measure 67, 24 oz usable; 24 plants, 6 matures and 12 immature • Washington: 8 ounces usable, 6 plants • Arizona:medical marijuana is legal 2.5 ounces usable, 12 plants • Colorado: 2 ounces useable, 6 plants, 3 mature, 3 immature • Utah: prohibited with a few narrow exceptions About Bret Sachter: As a Presidential Scholarship recipient, Bret received his law degree from the Seattle University School of Law. In addition to his law degree, Bret holds a bachelor’s degree in evolutionary psychology and master’s degree in psychology. Bret has taken an interest in tracking the progression and transformation of marijuana laws, as they are among the most recent and highest-profile legal issues affecting entrepreneurs in Washington and, increasingly, all around the country. You can call him at 206-295-2547 or visit his website here.

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