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August 2013
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MONTHLY CIRCULATION TO MORE THAN 20,000 IN PORTLAND/VANCOUVER APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association
Oregon's First Quarter 2013 Insight Into The Rental Applicant Risk Index Report By Jay Harris, Vice President of Business Services, CoreLogic SafeRent The CoreLogic® SafeRent® Renter Applicant Risk (RAR) Index Report, formerly known as the Multifamily Applicant Risk (MAR) Index Report, provides market-based benchmarks for evaluating credit quality and risk of default for renters applying for apartment homes in multifamily housing units. The index also includes data from single-family rentals. Using a mean of 100, an index value above 100 indicates decreased risk, and a value below 100 indicates increased risk. According to the data, the risk of default among renters nationwide decreased year over year in the first quarter of 2013 with an index value of 104 compared to the first quarter
Second Quarter Apartment Markets Mixed in Latest NMHC Survey
Current Resident or
By Jo Becker, Fair Housing Council Serving Oregon and SW Washington Following are several significant notices from the Dept. of Housing and Urban Development (HUD) that are relevant to all housing providers. As always, if you have questions, don’t hesitate to visit our website, www. FHCO.org or www.FHCO.org/hs_provider_info.htm. You can also call our hotline at 800/424-3247 Ext. 2. DISPARATE IMPACT HUD provides clarity on disparate impact, codifying a long-used legal precedent that says the Fair Housing Act1 (FHA) prohibits practices that result in discrimination “regardless of whether there was intent to discriminate." The eleven federal courts of appeals that have ruled on this issue of disparate impact agree with this interpretation. While HUD and
Continued on page 19
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While demand for apartment homes remained strong, rising interest rates exerted negative pressure on the industry’s ability to secure debt financing according to the National Multi Housing Council’s (NMHC) July Quarterly Survey of Apartment Market Conditions. Only the Market Tightness Index (55) remained above the breakeven line of 50 this quarter. Sales Volume (46) and Equity Financing (49) dipped, with Debt Financing dropping sharply to 20. “Debt costs for apartment firms have been rising. In addition to the 90 basis point increase in interest rates from the April survey, spreads over Treasuries have also gone up, likely dampening transactions somewhat. Rates are still low by historical standards, however, and at current levels should not put too big a crimp in apartment activity going forward,” said Mark Obrinsky, NMHC’s Senior Vice President for Research and Chief Economist. “Underlying demand trends remain strong, and we are approaching the cusp of a meaningful increase in supply that Continued on page 7
Continued on page 4 Page 3
PRESIDENT'S MESSAGE Page 6
PRESIDENT'S MESSAGE Page 10 Chapter 29 Institute of Real Estate Management
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The Landlord Times - Metro • August 2013
MULTIFAMILY NW President • Paul Hoevet Past President • Jeff Denson Vice President • Pam McKenna Secretary • Kirsten Bailey Treasurer • Chris Hermanski
PAUL HOEVET
16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 503-213-1281, 503-213-1288 Fax www.multifamilynw.org
Multifamily NW President
President's Message
Hello Everyone, I hope that all of you are enjoying this beautiful summer we a having. So far, 2013 has proven to be a very busy year for our Industry. The same can be said for the Oregon Legislature. They wrapped up the 2013 session on July 8th. The session witnessed many bills passed and many defeated that have a direct effect on the Rental Housing Industry. Multifamily NW tracked and advocated on over four dozen bills that, one way or another would have impact on our industry. The Association’s advocacy efforts have never been more focused. Through the hard work of the Government Affairs Committee, Executive Director Deborah Imse, the Multifamily NW staff, and our Government Relations Consultant Gwenn Baldwin, Multifamily NW was able to influence the outcome of many bills this year. For a summary of the 2013 Legislative priority bills that the Association worked on this year, please visit www.multifamilynw.org, click on Government Affairs, and read the 2013 Legislative Update. Advocacy is the most important thing any of us can do to both promote and protect and the Rental Housing Industry. Every year there
are many groups that champion many bills that directly impact our industry. These groups operate at the local, state, and federal level. Now that we are once again affiliated with the National Apartment Association, our voices will be louder on the federal stage. NAA is very busy lobbying in Washington D.C. on behalf of the Rental Housing Industry. They have effectively organized their affiliates in a manner that has increased our influence in the nation’s capitol. We need to do the same thing here in Oregon. As the number one voice of the Rental Housing Industry in the state, Multifamily NW has an excellent opportunity to increase our advocacy efforts in Salem and local municipalities across the region. We need all of our members to be involved in the legislation, ordinances, and rules written and passed that affect the health and vitality of our Industry. I would like to see us grow and strengthen our Political Action Committee. I would like to see us plan and execute a Lobby Day in Salem, where we would have a large contingency of members meet with lawmakers in Salem and share our stance on issues that impact us. I would also like to see us increase our advocacy efforts
at the City Council level. All of this takes one thing that we all cherish… time. Please consider giving some of your time to this very important cause. Make our voice heard. The dividends will be immense for all
of us. For more information on how you can get involved in Multifamily NW’s advocacy efforts call us at 503213-1281 or toll-free at 800-632-3007.
Multifamily NW 2013 Events: MARK YOUR CALENDAR! August 14, 2013 6:30 PM - 8:00 PM Landlord Study Hall - Take Control of Utility Costs and other Methods to Improve Cash Flow August 15, 2013 9:00 AM - 1:00 PM ELEVATE: Managing the Bottom Line August 19, 2013 9:00 AM - 2:00 PM ELEVATE: New Hire Class August 20, 2013 1:00 PM - 5:00 PM ELEVATE: Oregon Landlord/Tenant Law Part 2
August 23, 2013 8:00 AM - 12:00 PM ELEVATE: Maintenance for Administrators August 23, 2013 9:00 AM - 1:00 PM ELEVATE: Advanced Tax Credit Workshop September 13, 2013 12:00 PM - 1:00 PM It's the Law Lunchtime Series: Changing Ownership: How to Handle Transitions Into or Out of Properties September 16, 2013 9:00 AM - 2:00 PM ELEVATE: New Hire
visit www.multifamilynw.org for more dates
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Updates ...continued from front page every federal appellate court to have ruled on the issue have determined that liability under the FHA may be established through proof of discriminatory effects, the statute itself does not specify a standard for proving a discriminatory effects violation. “As a result, although HUD and courts are in agreement that practices with discriminatory effects may violate the FHA, there has been some minor variation in the application of the discriminatory effects standard. Through this final rule, HUD formalizes its long-held recognition of discriminatory effects liability under the Act and, for purposes of providing consistency nationwide, formalizes a burden-shifting test for determining whether a given practice has an unjustified discriminatory effect, leading to liability under the Act. This final rule also adds to, and
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revises, illustrations of discriminatory housing practices found in HUD’s FHA regulations.” You can download the 02/15/2013 document at www.FHCO.org/pdfs/fedRegisterDisparateImpact02152013.pdf. JOINT STATEMENT OF ACCESSIBLE DESIGN AND CONSTRUCTION HUD and the Dept. of Justice (DOJ) issued a joint statement with questions and answers on the Design and Construction (D&C) regulations under the FHA1, clarifying what is required of housing providers. Of particular interest to those of us in the 9th Circuit is that the federal government takes the position that there is continuing violation until the violations are corrected; contrary to the 9th Circuit’s position that the statute of limitations is 2 years from the date of first occupancy.
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The FHA requires that covered multifamily dwellings be designed and constructed with seven minimum accessibility standards or, stated more generally the following three points: • The public and common use areas must be readily accessible to and usable by persons with disabilities; • All doors designed to allow passage into and within all premises of covered dwellings must be sufficiently wide to allow passage by persons with disabilities, including persons who use wheelchairs; • All premises within covered dwellings must contain the following features: (1) an accessible route into and through the dwelling unit; (2) light switches, electrical outlets, thermostats, and other environmental controls in accessible locations; (3) reinforcements in bathroom walls to allow the later installation of grab bars;(4) usable kitchens and bathrooms such that an individual using a wheelchair can maneuver about and use the space. The FHA requires all “covered multifamily dwellings” (four or more units per building designed and constructed for first occupancy after March 13, 1991) to be readily accessible to and usable by persons with disabilities. In buildings with four or
more dwelling units and at least one elevator, all dwelling units and all public and common use areas are subject to the Act’s D&C requirements. In buildings with four or more dwelling units and no elevator, all ground floor units and public and common use areas must be accessible. You can read about the FHA’s D&C requirements, including all seven accessibility requirements at www.FHCO.org/dc.htm and www. FHCO.org/access_guidelines.htm. The 04/30/2013 HUD / DOJ Joint Statement can be viewed at www. FHCO.org/pdfs/dandc_jt_statement04032013.pdf. CLARIFYING THE DEFINITION OF ASSISTANCE ANIMALS UNDER THE FHA & ADA HUD has clarified the use of assistance animals for people with disabilities under the FHA1 and Section 504 of the Rehabilitation Act. The notice reiterated that persons with disabilities may request a reasonable accommodation for any assistance animal, including an emotional support animal under both the FHA and Section 504. The reasonable accommodations for assistance animals under the FHAA and Section 504 are far more liberal than the ADA (Americans Continued on page 5
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Updates ...continued from page 4 with Disabilities Act) definition. “For purposes of the reasonable accommodation requests, neither the FHA nor Section 504 requires an assistance animal to be individually trained or certified. While dogs are the most common type of assistance animal, other animals can also be assistance animals.” Assistance animals are not pets and under the FHA/Section 504, they may include comfort and therapy animals. This definition differs from the ADA definition of “service animal,” which only includes dogs and excludes emotional support or therapy animals. A great deal of additional information, including earlier documents from HUD on this and related issues is posted at www.FHCO.org/disability.htm and the www.FHCO.org/ serviceanimals.htm. The 04/25/2013 HUD document is available at www. FHCO.org/pdfs/HUDonAssistance Animals04252013.pdf.
the Obama administration than in past administrations. But in their report, the Lawyers’ Committee for Civil Rights Under Law, National Fair Housing Alliance and the Poverty and Race Research Action Council also stated that there was “unfinished business.” The organizations noted that in enforcing the obligation to affirmatively further fair housing, HUD has: • Participated in and sought increased enforcement in federal court cases; • Processed and investigated private fair housing complaints; • Increased its review and rejection of state and local “Analyses of Impediments” to Fair Housing (a federal housing requirement); • Undertaken compliance reviews that have resulted in voluntary compliance agreements addressing fair housing requirements; and
• Adopted a “disparate impact” rule that codifies existing court interpretation of the Fair Housing Act. In one case cited in the report, HUD’s participation helped restore over $100 million in disaster assistance funds that had been diverted by the state of Mississippi, but were actually intended to assist lowincome families after Hurricane Katrina. In another case, HUD pressure helped to persuade a suburb of New Orleans to repeal a discriminatory zoning ordinance that had excluded African American families from the area. While the civil rights groups are pleased that HUD’s leadership is taking enforcement actions that were often avoided in the past, the groups say that HUD’s reforming of its own programs to promote racial integration in housing has been painfully slow. And while enforcement of the fair housing obligations has increased,
the groups believe that further steps must be taken to address residential segregation in all HUD programs. You can read the full, joint media release at http://www.huduser.org/ portal/pdredge/pdr_edge_ news_031513_1.html and the full report at www.nationalfairhousing. org. THE FHCO AND THE NATIONAL FAIR HOUSING ALLIANCE (NFHA) APPLAUDS THE HOUSING OPPORTUNITIES MADE EQUAL ACT The Housing Opportunities Made Equal (HOME) Act aims to amend the federal FHA1, making it illegal to commit housing discrimination based on sexual orientation, gender identity, marital status, or source of income. Shanna Smith, President and Chief Executive Officer of NFHA stated, “For a long time now, NFHA has Continued on page 9
And in other news: HUD MAKES UNPRECEDENTED FAIR HOUSING PROGRESS, MORE WORK NEEDED
A report by three national civil rights organizations credits HUD with more vigorously enforcing state and local government compliance with fair housing obligations under
The Landlord Times - Metro • August 2013
5
RENTAL HOUSING ASSOCIATION OF GREATER PORTLAND
President • Elizabeth Carpenter Past President • Phil Owen Vice President • Robin Lashbaugh Secretary • Lynne Whitney Treasurer • Jon Moon Office Manager • Alita Dougherty Member Services • Cari Pierce Bookkeeper • Pam Van Loon
President' s Message
10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821 info@rhagp.org http://www.rhagp.org
We are the small landlords who have been providing affordable housing in Oregon since 1927. 80% of our 1,700+ members have fewer than 10 units. Small landlords are wary of the paperwork, the inspections, and the unreasonable demands on time that have long been part of the federal section 8 program. Many of our members just cannot see why a federal program for public housing is being forced on Oregon’s private property owners, when all the vouchers currently released in Oregon are used. There is no shortage of housing and there is no immediate problem we believe legislation will resolve. But we decided to trust and work with the Legislature. Our
Liz Carpenter, Rental Housing Association of Greater Portland President, talks this month about the hot topics of Section 8, legislative processes and the future. Trust is a hard thing to come by, especially in politics. Three months ago, the Rental Housing Association of Greater Portland announced neutrality on Speaker Tina Kotek’s Housing Choice law, making mandatory the acceptance of applications from section 8 program. RHAGP made this move to neutrality in order to continue to address the issues landlords have historically had with the program.
RENTAL HOUSING ASSOCIATION OF GREATER PORTLAND 2013 CALENDAR AUGUST 14 RHA ANNUAL PICNIC AND VENDOR FAIR – WED. 3:00 PM OAKS PARK SECTION 1
AUGUST 29 MEMBER INFO/MENTOR SESSION – 6:00 PM TO 8:00 PM RHAGP CONFERENCE ROOM – NO CHARGE
AUGUST 21 BOARD OF DIRECTORS MEETING – 5:00 PM RHAGP CONFERENCE ROOM – MEMBERS ONLY
organization has been around for a long time, and we’ve learned the balance between standing strong for private property rights and being constructive in the affordable housing community. We also trust that this law’s implementation will evolve: applications are required to be accepted – not tenants; tools for screening applicants can be applied equitably to everyone; landlords have access to funds to mitigate costs of damages; a committee of stakeholders will continuously meet to listen to concerns and find ways to improve the program; and efforts will be made to seek waivers allowing increased flexibility of the program in Oregon in areas such as inspections and lease lengths. RHAGP is committed to addressing all the Housing Choice issues, being partners in the affordable housing community, and we will continue to work in good faith. As the new law takes effect, our members simply ask for the same level of trust in return.
ELIZABETH CARPENTER RHAGP President
Now for the fun stuff! Our Annual Picnic – August 14th Join us for our annual summer party at Oaks Park. Cost is just $5 per person, over the age of 12. Ride bracelets are $9 each and skating is included! • 2 pm - Registration opens • 3 – 6 pm - Vendor Fair – Meet those who support landlords while engaging in many fun • 5 pm - Dinner served • 7 pm - Bingo starts Many members invite families, coworkers and even hold their company picnic at ours! The more the merrier. Looking forward to seeing you there. Since 1927, the Rental Housing Association of Greater Portland has held the standard of landlord civic participation and provided affordable housing to Oregonians.
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CALL RHAGP FOR MORE INFORMATION AND TO REGISTER FOR EVENTS 503 254-4723 OR WWW.RHAGP.ORG/CALENDAR-EVENT
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The Landlord Times - Metro • August 2013
Second ...continued from front page will hopefully be enough to meet the current need for apartment homes.” Key findings include: • Construction costs are rising nationwide. More than two-thirds (68 percent) of respondents indicated that construction costs had increased by more than 5 percent since last year. Another 29 percent indicated construction costs had increased over a year ago, but by less than 5 percent. [Note: These figures exclude the 16 percent of respondents who answered “don’t know.”] • Market Tightness Index edged up to 55 from 54. Just 14 percent noted looser conditions in the markets they were familiar with. This represents the 13th time in the last 14 quarters in which the index was over 50. • The Sales Volume Index dropped from 55 to 46. This was the second time in the last three quarters in which the Sales Volume Index was below 50, though just by a little. Over the last eight quarters, the index has averaged 52, suggesting a small pickup in volume over that time. • The Equity Financing Index dropped 7 points to 49. This was the first sub-50 reading in the last four years. Forty-nine percent viewed equity financing as unchanged. Twenty-one percent of respondents viewed equity financing as more
available while 22 percent viewed equity financing as less available. • Debt Financing Index dropped sharply to 20 from 59. Two-thirds (67 percent) of respondents indicated that debt financing conditions had worsened since April, and 21 percent considered conditions unchanged. Only 8 percent of respondents thought debt financing conditions had improved – the lowest figure since October 2008. Full survey data are available at www.nmhc.org/goto/61291. About the survey: The July 2013 Quarterly Survey of Apartment Market Conditions was conducted July 8-July 15, 2013; 70 CEOs and other senior executives of apartment-related firms nationwide responded. Based in Washington, D.C., NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC’s members are the principal officers of firms engaged in all aspects of the apartment industry, including owners, developers, managers and financiers. One-third of Americans rent their housing, and over 14 percent live in a rental apartment. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC’s web site at www.nmhc.org.
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Rental Housing Association of Greater Portland 10520 NE Weidler Portland, OR 97220 Phone: 503-254-4723 Fax: 503-254-4821 7
In
strong rental markets, many leasing employees are faced with the wonderful challenge of being 100% leased. Some apartments are being rented “sight unseen,” and perhaps there are only a few days in any given month where vacant apartments are available to look at before the new residents move in. For communities that have rented and done away with their model apartments, many leasing consultants are now in situations where they have nothing to show, even if they have unrented notices. The following question expresses this dilemma and the leasing consultant’s frustration:
Q: Our property consistently
stays full and we typically rent our notices almost as soon as they come in. When people call to inquire about an apartment and I don’t have anything available to show, I will usually refer them to our web site or recommend that they call back at a later date. I don’t want to waste their time if I don’t have anything available. However, lately some callers have been pretty insistent about wanting
to come by even when I don’t have an apartment they can see. Should I really be trying to set appointments when all I can do is hand out a floor plan and give a property tour?
A: This is a challenge, and yet a
unique and incredible opportunity for you to highlight and sell many other aspects of your community that you might not normally focus on during an apartment tour. EVERY caller should be extended an invitation to visit your community, whether you have an apartment to show or not. While a web site is just one of many “sales tools” at your disposal, it is not the only tool you have. What about your property and the many community benefits you have to offer? Even if you work at a smaller community, you still have numerous benefits to sell. Perhaps it’s the location of your building and the many area conveniences, which no one will truly appreciate unless they make a visit and drive through the neighborhood. Maybe you have an outstanding maintenance staff that is highly visible that a prospective resident
would observe hard at work when visiting your community. What about your friendly residents who are out and about? The ones who smile and cheerfully say “Hello” to everyone they meet. Have you ever considered your existing residents as a “sales tool?” Then, last, but certainly not least, there is YOU!! No web site or other form of “inanimate” advertising can take the place of a warm, friendly and VERY enthusiastic person who is excited about their product and what they are doing. Of course it’s much “easier” to just refer someone to a web site or encourage them to check back with you when you have no apartments to show. After all, it does “appear” that you are trying to be “helpful.” What if you extended an invitation to visit instead? You would definitely have to expend some extra time and energy and get creative to sell your product in a new and exciting way without a “visual.” Perhaps your enthusiastic personality could describe and demonstrate with such animation that you could create your own “visual?”
Of course you want to be honest about your apartment availability and not get your prospects so “worked up” that you sell them on renting an apartment that is not available for their time frame. On the other hand, maybe there is some flexibility with their move date. Remember: Part of your job as a sales person is to convince the customer that what you have to offer is worth waiting for. . . ASK THE SECRET SHOPPER Provided by: SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@shoptalkservice.com Website: www.shoptalkservice.com Copyright © Shoptalk Service Evaluations
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Metro Apartment Manager 2008 The Landlord Times - Metro• •October August 2013
Updates ...continued from page 5 wanted the federal Fair Housing Act to include protections for a lot of classes that are often being discriminated against. Providing housing should be nothing more than a business decision. If an individual can afford housing, there is no reason they should be denied housing. Passage of the HOME Act would be a major win for civil rights.” Representatives Jerrold Nadler and John Conyers introduced the bill to the House and Senator Sherrod Brown introduced the bill to the Senate. The intention of the FHA is to end housing discrimination and promote integrated communities. Yet, disturbing results from a housing rental study (www.FHCO.org/ pdfs/HUDsameSexDiscrim Study062013.pdf) recently conducted and released by the HUD showed heterosexual couples were favored over gay male couples 15.9% and over lesbian couples 15.6% of the time. Currently, only 12 states and the D.C. prohibit discrimination based on source of income. At this time, only 20 states and the District of Columbia (D.C.) prohibit discrimination on the basis of sexual orientation, only 14 states and D.C. prohibit discrimination based on gender identity. Recently, the U.S. Supreme Court ruled that the Defense of Marriage Act (DOMA), which allowed states to refuse the recognition of same-sex marriages per-
formed under the laws of other states, is unconstitutional. It should be noted that Oregon and Washington states are among the forward-thinking states referenced above. Both provide protections for all sexual orientations, including gender identity; and both states protect source of income. The HOME Act can be read at w w w. F H C O . o rg / p d f s / HOMEact2013.pdf. This article brought to you by the Fair Housing Council; a nonprofit serving the state of Oregon and SW Washington. All rights reserved © 2013. Write jbecker@FHCO.org to reprint articles or inquire about ongoing content for your own publication. To learn more… Learn more about fair housing and / or sign up for our free, periodic newsletter at www.FHCO.org. Qs about this article? ‘Interested in articles for your company or trade association? Contact Jo Becker at jbecker@FHCO. org or 800/424-3247 Ext. 150 Want to schedule an in-office fair housing training program or speaker for corporate or association functions?
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9
INSTITUTE OF REAL ESTATE MANAGEMENT
President • Christina DuCote’, CPM, RPA President Elect • Cammie Allie, CPM, ARM Vice President-Member Services • Kimberly Fuhrer, CPM Vice President-Communications • Jocelyn Burmester, CPMC Vice President Education • Kathi Pearce, CPM Vice President-Finance • Stephanie MacPherson, CPMC IREM Chapter #29 11575 SW Pacific Hwy Suite 210 Tigard, OR 97223 (503) 228-0002 (503) 406-2003 fax
Dear IREM® Members, Friends and Affiliates: As summer is in full swing, I truly hope that you’ve all had time to enjoy some personal time off with your families and friends in conjunction with the beautiful summer weather that we have been blessed with recently in the Pacific Northwest. Summertime is also the season for large interior & exterior projects and repairs in our line of work. Balancing professional and personal activities can be challenging, but I know that IREM® members excel under pressure and can successfully navigate through the mayhem of these responsibilities! As you may know, our chapter has experienced some big changes in the last couple of months. Our 2013 Chapter President, Christina DuCoté, RPA, CPM® has relocated to IREM®’s San Francisco Chapter with her family and we wish her the best of luck and a fond farewell as she starts a new chapter in her life. Congratulations Christina on a job well done with your tenure as our President and leader. Thus as President-Elect and in accordance with our Bylaws, I have officially stepped into the 2013 Chapter President role and I’m extremely excited to begin this journey a little earlier than expected!
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President's Message Filling the vacancy of President-Elect, I’m pleased to announce that David Genrich, CPM with Shorenstein Realty, has accepted for the remainder of 2013. I can’t thank David enough for stepping into this role quickly and without hesitation so that we don’t miss a beat within the chapter. In addition, Julie L. Muir, CPM®, IREM National Senior Vice President and part of the Chapter association management team, has moved from Elliott Associates to a new position with CBRE, but will still be assisting with the association management functions as needed. Congratulations Julie on your recent move! However, Lindsey Chrysler with Elliott Associates will remain the IREM Association Executive (“IAE”) for our chapter. She has, and will continue to do a fabulous job supporting our chapter as we transition chapter leadership roles. Thank you Lindsey! Our Chapter Nominating committee recently met and approved the slate of 2014 officers, board members and committee chairs and the official ballot will be coming to you for a vote shortly. One of my first official duties as Chapter President was to travel to Bend and swear in our latest IREM® member, Krista Polvi, CPM® of Compass Commercial. I was blown away
by the fabulous showing of support from Compass as they hosted a catered event and invited Krista’s colleagues, investors, and friends to honor her achievement. Congratulations Krista, and welcome to the IREM® family. Don’t miss our upcoming events! Our 3rd annual Par 3 Golf tournament is being held at McMenamin’s Edgefield on August 21, 2013. The golf committee has worked extremely hard to coordinate this must-attend event and I look forward to seeing you there. Please be sure to register early to reserve your spot! Got Swing? As we move into fall, please watch for details of our annual Friends of IREM® and sponsor appreciation night. And, because we have heard your requests for variety in our Chapter offerings, you’ll be pleasantly surprised by the format and substance of this annual tradition. Mark your calendars for November 15th for this year’s Inaugural Gala and IREM®’s 80th Birthday Celebration at the Jupiter Hotel. It will be a party like no other party! Bring your dancing shoes, a spouse, a date, a friend, and let’s celebrate the inauguration of our 2014 team and IREM®’s milestone together! Rooms at the Jupiter will be available at discounted rates for your
convenience. Finally, the news is out! Our 27th annual Forecast Breakfast is also headed for IREM® stardom as we’ll bring you a brand new and refreshed format designed to encourage conversation and banter between presenters and deliver the information you need to manage your properties in 2014 and beyond. Thursday, December 5th – mark the date on your calendar! We are always interested in your ideas and opportunities and we challenge you to bring them on! If you’ve ever said: “I wish they would….” or “I wish they had…”, please feel free to e-mail me directly at callie@fortresspropertymgmt.com and let’s see how we can make it happen! Our Chapter is here to serve our members and to provide the best, leading-edge events, networking opportunities and education. A little fun doesn’t hurt either! Thank you for allowing our Chapter to serve you as we head for a strong finish to 2013! Enjoy the rest of your summer!
The Landlord Times - Metro • August 2013
Top Seven Reasons to Use Rental Payment History Data
E
xperian® RentBureau®, the leading provider of rental payment history data to the multifamily industry, recently released the findings of an analysis examining the financial risk posed by residents and the most effective screening metrics to employ to avoid lost revenue from risky residents. The analysis, Risk versus reward: identifying the highest-quality resident using rental payment history, provides unique, industry-specific insights regarding the use of rental payment data in conjunction with credit scores in screening to produce a superior prediction of a resident’s propensity to default. The analysis also includes first-of-its-kind data regarding late payments, nonsufficient funds (NSF), write-offs and rental collections. Here’s a look at the top seven takeaways from the analysis that offer multifamily owners and property managers a look into the best applications of resident payment history data: 1. Complement traditional credit scoring: The use of rental payment data in conjunction with credit scores in the screening process produces a superior prediction of a resident’s propensity to default. To improve rent default rates and better assess an applicant’s risk, owners and property managers are best served by utilizing rental payment
data along with credit scores. Renters with the highest credit scores show much lower rates of default. However, within that population, those with negative rental history are more than four times as likely to default as those with positive rental history. 2. Realize better risk management: Renters, as measured by credit scores, are a higher-risk group than the U.S. population overall. Eighty-five percent of the renters in the sample set are in one of the three lowest VantageScore® credit ranges (501 to 799), compared with a national average of only 64 percent. 3. Gain insight into propensity to default: How an individual paid rent in the past is a good indicator of how he or she will pay rent in the future. Renters with one prior rental debt have a default rate nearly four times higher than applicants with positive rental history. 4. Avoid balances owed: Rental payment history data allows for the identification of residents who repeatedly move out of communities owing money. These individuals are nearly six times as likely to repeat this behavior compared with a resident who has consistently paid rent on time. 5. Spot serial skippers: By identifying prospects with multiple negative prior rental payments, owners and
property managers can avoid renting to individuals who likely are serial skippers and have a 35 percent chance of defaulting again. 6. Minimize late and NSF payments: Default among residents who have a history of late or NSF payments escalates steadily as the number of late or NSF payments increases. Renters with three or more late or NSF payments have a default rate more than twice as high as renters with only two or fewer late or NSF payments. 7. Achieve higher occupancies: Augmenting the lack of a credit score with rental history data can help owners and property managers improve occupancy while also managing risk. Unscoreable individuals with positive
rental history have lower overall default rates and could make strong renters for managers looking to increase occupancy. To learn more about how rental payment history can help your portfolio protect NOI, reduce skips and evictions, and identify the highest-quality residents, download a complimentary copy of Risk versus reward: identifying the highestquality resident using rental payment history, an analysis of the most effective screening metrics to employ to avoid lost revenues from risky residents. VantageScore® is a registered trademark of VantageScore Solutions, LLC.
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ASK THE ENERGY EXPERT ANDREW SCHAFER, PGE Energy Expert
Q:
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I’d like to make my units more comfortable and energy efficient. What incentives and services are available?
A: There are excellent energy-
efficiency programs available that can improve your property’s value and competitiveness while providing your tenants with greater comfort and the opportunity for reduced heating bills. PGE offers a free energy consultation Take the guesswork out of where to begin by turning to the PGE Energy Experts. PGE offers a free energy consultation of your property — either onsite or over the phone — that will help you identify energy-saving opportunities and prioritize your efforts based on your budget and goals. We’ll also connect you with Energy Trust of Oregon cash incentives and trusted contractors. Request a free energy consultation at www.PortlandGeneral.com/EnergyConsult.
Get cash back with Energy Trust incentives Energy Trust offers cash incentives on a variety of energy-efficiency improvements, including heating and cooling equipment, water heating, insulation, replacement windows, exterior doors, in-unit and commonarea appliances, lighting and lighting controls (including LED exit signs and exterior lighting), as well as solar electric, solar water heating and solar pool heating. To qualify for cash incentives, your energy-saving improvements must meet Energy Trust program criteria and requirements. The requirements and the amount of incentive that you receive vary by project and technology. Learn more at www.EnergyTrust. org/Multifamily or call Energy Trust at 877-510-2130. Be sure to obtain pre-approval from Energy Trust before you financially commit to a project.
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vention Center, 777 NE Martin Luther King Blvd. Portland, OR 97232. Stop by the PGE / Energy Trust booth to discuss how to make your properties more energy efficient. We’ll also have a ductless heat pump on display – a highly affordable, energy-efficient alternative to electric baseboard and wall heaters that also provides summer cooling.
Low-interest financing can help Some investments also may qualify for low-interest, no-fee financing through Umpqua Bank (an Equal Housing Lender). After you have selected contractor bids, financing for many projects can be arranged by phone with as little as 48 hours of review time. For details, go to UmpquaBank.com/GreenStreet or call 866-790-2121.
If you have questions you’d like to have answered in future “Ask the Energy Expert” columns, please e-mail Sarah.Pagliasotti@pgn.com.
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Chuck Brazer & Jason Waxberg (503) 327-8237 The Landlord Times - Metro • August 2013
255 Metros Listed as Improving Housing Markets in July A total of 255 metropolitan areas across 49 states and the District of Columbia qualified to be listed on the National Association of Home Builders/First American Improving Markets Index (IMI) for July, released recently. This is down slightly from the 263 metros that made the list in June, but is more than triple the number of metros that were on it in July of 2012. The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Six new markets were added to the list and 14 were dropped from it in July. Newcomers include the geographically diverse metros of Cumberland, Md.; Saginaw, Mich.; Farmington and Las Cruces, N.M.; Kingston, N.Y.; and Olympia, Wash. “This is the sixth straight month in which at least 70 percent of all U.S. metros have qualified for the Improving Markets Index,” observed NAHB Chairman Rick Judson. “The relative stability of the IMI is representative of the broad recovery underway, which is much more extensive than what we were looking at one year ago.”
The Landlord Times - Metro • August 2013
“Despite slight ups and downs in recent IMI levels, an overwhelming majority of U.S. metros -- including those located in almost every state -- remain solidly on the path to recovery even as the pace of their improvement is slowed by ongoing challenges related to the availability of credit, labor, lots and certain building materials,” added NAHB Chief Economist David Crowe. “Based on recent trends in home prices, housing permits and employment, the outlook for a continued housing expansion remains very positive for the remainder of 2013.” “The fact that more than twothirds of all U.S. housing markets continue to be represented on the improving list should be a boon to consumer confidence at a time when many are looking to take advantage of recently’s very favorable mortgage rates,” observed Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark
on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six
consecutive months following those measures’ respective troughs before being included on the improving markets list. A complete list of all 255 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in July, is available at www.nahb.org/imi.
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CLARK COUNTY RENTAL ASSOCIATION President • Lyn Ayers Vice President • Blain Cowley Secretary • Patty Silver Contact • Lyn Ayers • Phone (360) 693-0025 • info@ccrawa.org
Treasurer • Janine Ayers
Membership Committee • Roger Silver
5620 Gher Rd., Suite H Vancouver, WA 98662-6166 (360) 693-CCRA www.clarkcountyrentalassociation.org
President's Message Here it is August already. So we are in the middle of the Dog Days of Summer. That means that many of us are either about to go on vacation or have just returned and managing our rentals may not be high on our
list of priorities. That may not be a good thing: are we ignoring signs of impending problems? Are you paying attention to the tenant who is often a few days late in paying the rent? Since your tenant was later this
month than ever before, what have you done about it? Did you follow up and discuss it? Is the tenancy entering a new phase of additional challenges (meaning problems)? Have you done your periodic drive-by or did you skip it this time? Did you notice that front lawn of one of your tenant’s that looks like it hasn’t been mowed since Lassie was a pup? But don’t worry about that because you will likely receive a nice letter from Code Enforcement requiring you to fix it soon—maybe while you are on vacation. In other words, don’t neglect your rental business this summer, because if you do, it will usually cost more to address later. Over the past several months I have written about the current legislative session in Washington State and the ideas being floated to increase state revenues. Many of these issues will undoubtedly return in one form or another next year. In general terms, we dodged most of the bullets that were flying around us both for our rental businesses and personal finances. I am relieved it is over—for now. Please contact our legislators and thank them for their support of our industry. The Board has been working on updating the forms we use. It has been a few years since they have been extensively reviewed. The Board decided it was an effort that was long overdue. To-date we have
versions we thought were finalized. However final approval was delayed in order to coordinate our forms with newly revised forms available from WAA. We are in the process of completing that additional comparison and plan for them to be available to our members by the end of August. I recently met with a supervisor from the Council for the Homeless. It was an opportunity to hear firsthand about the increasing number of homeless or near-homeless folks in our community. Some of that increase is unnecessary since additional support is available from the affordable housing industry. Additional case work, deposit monies, and longer term rent subsidies are accessible by our landlords who want to support this market segment. This situation does distress me as we should aware of the needs of the community at large. If you have any thoughts of ways to fill this need, please contact Share House or Housing for the Homeless and discuss your thoughts with one of their case workers or managers. Even though it is the Dog Days of Summer, there are plenty of opportunities to be proactive, informed, and involved in the success of our rental investments and the well-being of our community. Keep this in mind while relaxing under your umbrella with a cool one in your hand.
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The Landlord Times - Metro • August 2013
Resident Appreciation - It Means Everything! © By Ernest F. Oriente, The Coach Want to know the secret for keeping your residents forever? And what if you could keep your properties full and plus have a waiting list, because your residents loved the way you appreciated them? In this article, you will learn how easy it is to develop a powerful resident appreciation program. Once in place, an appreciation program will forever change the way you operate and manage your apartment communities. Developing a monthly appreciation plan: At the beginning of each month, develop some fun ideas to “thrill” the residents at the properties you own or manage. Start by planning a short brainstorming session with your key property supervisors, resident managers and their leasing staffs, so you can hear their unique insight about ways to make the program a giant success. Their input is critical as each property has its own special resident profile, so customize your appreciation plan accordingly. Once your appreciation plan is finalized, provide a written recap for your leasing team so everyone will know exactly what their role will be. Clear communication makes for perfect implementation. Tip From The Coach: Consider building your resident appreciation plan for six to twelve months
in advance. This makes for better financial budgeting, a more thoroughly developed appreciation plan, and your leasing team will have the time to evaluate several competitive proposals for the cost of each month’s theme. Building appreciation themes: As you consider the theme for each month’s appreciation program, start by looking for specific holidays or seasonal times of the year. For example, summer time is perfect for fun poolside events and outside activities. Have your leasing team take plenty of photos and fill your next newsletter + website with pictures of your residents having a great time. Everyone loves to see pictures of themselves and for those who couldn’t attend, they will certainly be encouraged to participate at the next event. Another appreciation theme, depending on the profile of your residents, might be more educational. For example, have a local computer store give a live demonstration for your residents about ways to maximize their use of the Internet or social networking websites like Facebook, Twitter and LinkedIn. Your residents will be thrilled to hear more about the Internet and the computer store gets to meet lots of potential new customers… a win-win for all. Finally, speak with your vendors and neighborhood businesses as many would like to co-
sponsor your appreciation program. Your residents might just be perfect new customers for them. Tip From The Coach: Certainly your residents will love the appreciation you show them each month and so will your future residents. If appropriate, invite every future resident who comes to the properties you manage, to participate in your resident appreciation program. Take this small step and watch your closing ratio double, with the future residents who attend! Evaluating the success of resident appreciation: Start by asking your leasing team to make written notes of any nice comments shared by your residents or
prospective new residents. These nice quotes are perfect to include in your next property newsletter + website and makes for great reading, especially for those who could not attend or participate. Next, evaluate the number of residents who attend or participate each month, as this helps for planning future programs. Of course, monitor your resident retention percentages, as this is the critical measurement of how well your appreciation program is working. Tip From The Coach: Remember, your residents will feel important when they know they are a top priority. Implementing a resident retention program will not cost much.
Continued on page 18
Ultimate Cleaning Solutions specializes in apartments move-in and move-out cleaning services. We will make sure that your vacated apartment or rental property is ready for the next client. First impression is important and therefore, our goal is to help you show your prospective client a polished, clean and inviting apartment! Ultimate Cleaning Solutions can make a vacant apartment, or office “move-in” ready by cleaning everything from top to bottom. You can feel confident that we are busy returning your rental to showcase condition. We are ready to help you! Our services include move in/move out cleaning services to apartment community managers and individuals owning rental property. We are your one-call apartment turnover solution.
You can contact us at: 503-521-7458 or office@ultimatecleaninginc.com The Landlord Times - Metro • August 2013
15
Dear Maintenance Men: By Jerry L'Ecuyer & Frank Alvarez Dear Maintenance Men: I manage a number of properties that use a master key system. Do you have a plan or solution to prevent vendors from losing master keys? This is becoming a problem and an expensive risk. Janet Dear Janet: Never, ever, ever give a master key to a vendor or anyone else not employed by your company. If the building is on a budget and cannot afford state of the art systems for key control or access, try this simple and cost effective approach: Install a temporary lockbox with the unit key inside and hang the lockbox on the door knob or a water pipe near the unit. Any locksmith and even some
hardware stores sell these boxes. If a vendor needs access to a unit, give him access to the lockbox only. Should they lose the key, you are only out the cost of a key. Save yourself a trip and install the lockbox when you visit the property for the move out inspection. Note: The locks should be changed or re keyed after completion of work. If your vendors need access to a unit where on site personnel is available, the unit must be opened by your employee or provide the vendor with the unit key only, not the master. If your main office is centralized and your portfolio is dispersed throughout a particular region with buildings under 16 units (which do not require onsite managers) appointments should be made in advance and coordinated between the
vendor and the resident (keeping you in the loop). This will put the burden of entry, missed appointments, etc. on the resident and the vendor, freeing up your valuable time. If entry is needed due to an emergency, you should respond to the building to assess damages or necessary mitigation at the same time allow entry. Take a lock box with you and a unit key incase the repairs will be prolonged and access will be needed by others. Never give a master key to a vendor! Dear Maintenance Men: I have a conundrum! I am thinking of charging an automatic cleaning fee to my new residents. (Of course, after executing a fully signed disclosure with the new resident at the time of contract signing.) The issue has arisen because when a resident moves, they expect their cleaning deposit to be returned if they clean the unit. However, I find I must clean again at my expense as the unit is really never clean enough. Is the automatic cleaning deposit a good idea or will the residents just leave the unit in far worst conditions, since they feel they have already paid for the cleaning? Kelly
Dear Kelly: Due to the fact that individual units may differ in the size, construction, appliances, finishes amenities etc., establishing a one size fits all cost or fee may hurt you in the long run. People have different ideas of what “clean” is and this is why property owners and managers must set the standard of how clean the unit must be. Give the resident a description of what management considers a clean unit to be and have the new resident fill out and sign a move-in inspection form as to the move-in condition of the unit. When you are given a notice to vacate, inspect the unit and document the conditions. Do not discuss the cost or what you will be charging or deducting from the security deposit with the resident at the time of the inspection. However do let the resident know what is expected when the unit is returned and supply the name of your preferred cleaning service. The rational in supplying the name of your cleaning service for your tenant’s use is that the cleaning service knows what is expected and how management wants the units cleaned. Upon move out; if the vacant unit does not meet that standard; charge the resident a cleaning fee, backed up with vendor receipts and take pictures of the substandard unit should the Continued on page 17
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The Landlord Times - Metro • August 2013
Maintenance ...continued from page 16 matter go to court. Keep in mind that there are always costs in turning a unit such as normal wear and tear, smoke/ Co2 alarm batteries and other cost of doing business associated with being an owner or manager of an apartment building. Dear Maintenance Men: I have rented a unit to a retired building contractor and he has offered to do work around the building in exchange for a rent reduction. He says he knows what he is doing and the arrangement will benefit both of us in the form of lower rent for him and lower apartment maintenance costs for me. He views it as a win win for both of us. Is this a good idea? Gloria Dear Gloria: This is a management and maintenance question all in one! Both will have the same answer and it is a firm NO! You will lose all leverage over the work since you are not directly paying for the work and you are blurring the lines between resident and landlord. Do you evict the tenant because he did a bad job installing a garbage disposal unit or because he is short on his rent? It would be bet-
ter that your resident work for someone else and keep your maintenance and rent separate. Also, please keep in mind the liability and workman’s compensation issues that may be involved by hiring a resident to do work at your building. QUESTIONS? QUESTIONS? QUESTIONS? We need more Maintenance Questions!!! To see your maintenance question in the “Dear Maintenance Men:” column, please send submission to: Questions@ BuffaloMaintenance.com Please “Like” us on Facebook.com/BuffaloMaintenance Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01216720 Certified Renovation Company Websites: www.BuffaloMaintenance. com & www.ContactJLE.com www.Facebook.com/BuffaloMainte nance
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Resident ...continued from page 15 But the return on your investment will be significant based on less resident turnover, happier residents will send more referrals, and more fun for your leasing staff. Why? Because The Coach says so! Plus, good news travels fast and so will the sterling reputation you earn with your residents. Want to hear more about this important topic or ask some additional questions? Send an E-mail to ernest@ powerhour.com and The Coach will Email back to you a free invitation to be a participant on a PowerHour conference call. On this call we will discuss 25 appreciation themes your residents will love.
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Author’s note: Ernest F. Oriente, a business coach since 1995 [30,400 hours], a property management industry professional since 1988--the author of SmartMatch Alliances--and the founder of PowerHour...[ www.powerhour.com and www.powerhourseo.com and www.pirmg. com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing [ www.powerhour.com/propertymanage-
ment/utilitybillaudit.html ] national real estate and apartment building insurance [ www.powerhour.com/propertymanagement/insurance.html ], SEO/SEM web strategies, national WiFi solutions [ www. powerhour.com/propertymanagement/ nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ http://www.powerhour.com/ propertymanagement/employeepolicymanuals.html ] and social media strategic solutions [ http://www.powerhour.com/ propertymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified in the Xerox sales methodologies. Recent interviews and articles have appeared more than 7000 times in business and trade publications and in
a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 200+ articles for the property management industry and created 350+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail ernest@powerhour.com or visit their website: www. powerhour.com
The Landlord Times - Metro • August 2013
Oregon's ...continued from front page 2012 with an index value of 102. On a quarter-over-quarter basis, the risk of default decreased in the first quarter 2013 compared to the fourth quarter of 2012 when the index value was 103. The rise in the index is a sign of improving ability to meet lease obligations among prospective apartment renters nationwide. For additional regional data and renter trends, visit http://www.corelogic.com/ about-us/researchtrends/renterapplicant-risk-index.aspx
Here is how Portland-VancouverBeaverton, OR-WA performed in the first quarter compared to last year: • Portland-Vancouver-Beaverton, OR-WA: 1Q13 RAR Index = 114 • Portland-Vancouver-Beaverton, OR-WA: 1Q12 RAR Index = 109 The CoreLogic Renter Applicant Risk (RAR) Index Report is published quarterly by CoreLogic SafeRent. The RAR Index is calculated exclusively from applicant-traffic credit quality scores from the
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503-221-1260 The Landlord Times - Metro • August 2013
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