Rental Housing Journal On-Site
February 2018
3. Have You Reviewed Your Criminal Background Checks Policy Lately?
6. How to Make Apartment Move-In Easier for Tenants and Managers
5. Rents Unchanged in December but Still Up 2.5% Year-Over-Year
7. Cash Flow from Car Charging
7 Types of Kitchen Countertops for Your Apartments
8. Dear Maintenance Men: 9. Advocating for Our Industry
12. New Tax Law Holds Favorable Prospects for Commercial Real Estate Potential to Boost Space Demand and Capital Flows 15. Multifamily Managers and Marijuana: Caught in a Pot Crossfire
17. Supporting Possible Reforms in Washington Service Animal Law 20. Do You Know How to Respond to a Sexual Harassment Complaint? 22. 6 Types of Fencing for Your Rental Property
www.rentalhousingjournal.com • Professional Publishing, Inc 17,000 Papers Mailed Monthly To Puget Sound Apartment Owners, Property Managers & Maintenance Personnel Published in association with Washington Association, IREM & Washington Multifamily Housing Association
7 Pest Preventative Maintenance Steps for Rental Housing
Seattle’s Flourishing Multifamily Market on Track for Outstanding Performance
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he maintenance check up this week, provided by Keepe, asks whether you are taking the pest preventative maintenance you need in your rental housing to protect your investment and your tenants. From mice to ants and cockroaches, pest infestations can cause serious property damage and traumatize tenants, significantly worsening their perception of their living conditions. Property managers need to be aware of what draws pests to rental homes and adopt simple pest preventive maintenance steps that can protect properties and tenants.
7 Types of Pest Preventative Maintenance Steps No. 1 - To avoid any and all infestations, it is fundamental to regularly inspect properties for cracks, crevices and any kind of openings that would allow unwanted critters to access indoor spaces. This includes checking open vents and drainage pipes. No. 2 - Pests need a source of moisture to survive, so it is adequate to minimize the presence of standing
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ousing shortage fueling rapid expansion of Seattle’s multifamily market. An unprecedented development boom in downtown Seattle has created a magnet for talent, driving more companies to locate in the area. As tech giants maintain a robust pace of hiring, demand for housing across the metro will remain at heightened levels. A sharp rise in for-sale home prices and limited available inventory ensure rapid growth of the renter pool this year. The median
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home price in the Seattle-Tacoma metro is more than ve times greater than the median income, pointing to the benets that residents can achieve through rental housing. In several of Seattle’s submarkets, the median home price sits above $700,000, exacerbating the need for more rental units across the metro, particularly as downtown apartment vacancy plummeted last year. While supply injections will be widespread, the largest concentration will once again be in the South Lake Union/Queen Anne
submarket, which will receive roughly one-fth of expected completions this year. Investors remain confident as property performance set to improve even further. Rising household growth, robust rent increases and steady asset appreciation will keep investors active in the Seattle-Tacoma metro this year. While debt remains inexpensive, buyers are mobilizing across the market, searching for a haven to place capital at ...continued on page 14
Company Acquires Lighthouse Apartments in Seattle Metro
reshwater Investments has purchased The Lighthouse Apartments, a 76-unit property in Kent, Washington, for $16.5 million, according to a release. This is the second property in the Seattle metro area that Freshwater has added to its portfolio. The company also owns the 93-unit Stinson Apartment Homes in Everett, WA. “The Seattle metro area continues to be a sought-after location with high potential. With this acquisition, we have almost doubled our portfolio here and created new opportunities for our investors,” Alex Rozenfeld, Freshwater Investments Founder and Managing Partner said in the release. The seller of the property was TruAmerica Multifamily, and its Dispositions & Investment Management Director Christopher Wei said in the release, “Freshwater Investments was as professional a Buyer as we have transacted with. PSA negotiations were expedient, the Due Diligence process was seamless, and closing took place on time and at the price we entered escrow with, which is
what we value most.” Apartments built in 2002 Built in 2002, the three-story Lighthouse community consists of 76 units and offers a mix of one- two-
and three-bedroom apartment homes ranging from 716 to 1,198 square feet. The property is located within walking distance to the ShoWare Center, a ...continued on page 6
Rental Housing Journal On-Site
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Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
Have You Reviewed Your Criminal Background Checks Policy Lately? By Ellen Clark
A
federal lawsuit in New York is challenging a landlord’s blanket ban on leasing to people with criminal backgrounds. The federal government has advised landlords against such bans, saying they could violate fair housing laws, but the practice persists. The lawsuit alleges that the landlord’s policy disproportionately affects black and Latino men, and thus violates federal law. The policy, although not discriminatory on its face because it doesn’t single out any protected classes, could still be illegal if it has a discriminatory effect. In other words, if the effect of the policy is discrimination, even if not intentional, it would be illegal. Review your policies regarding residents’ criminal histories to ensure they do not have a disparate impact on minority home seekers. Criminal background checks policies cannot intentionally or inadvertently make it more difficult for them to find housing. Some estimate that one in three Americans has a criminal record,
and studies cited by HUD show that certain racial and ethnic minorities are arrested and convicted of crimes more than others. This means certain criminal history policies could have a disparate impact on minority home seekers, making it difficult for them to find housing. Some individual cities have now gone even further in restricting what landlords can ask about a potential
A Smoke-Free
tenant’s criminal background..
4 tips on criminal background checks HUD has provided guidance for developing, reviewing or revising a community’s criminal background checks policy. Here are tips to help you comply with the guidance. • A policy may use criminal convictions as a screening criterion because
a conviction is sufficient evidence that someone engaged in criminal conduct, but may not use convictions to automatically exclude individuals. • A policy should not deny residency or otherwise discriminate against an applicant or resident based solely an arrest record. An arrest is not the same as a conviction. • A policy may use criminal convictions as a screening criterion because a conviction is sufficient evidence that someone engaged in criminal conduct. • However, a policy should not automatically exclude individuals because of a criminal conviction. Instead, it should consider factors such as the nature and severity of the crime and how long ago the crime was committed. Note that a policy can automatically exclude based on convictions for the illegal manufacture or distribution of a controlled substance. Related convictions, such as drug possession, are not covered by this exception. ...continued on page 10
Policy Lowers Your Risk of Fires and Damage 2016 Washington Fire Deaths • 11% of fire related deaths were caused by smoking. • 62% of fire deaths were in single-family homes and 20% were in multi-family homes. -Washington State Patrol Office of the State Fire Marshal
Renters Prefer Smoke-Free Housing • About 92% of renters prefer to live in smoke-free housing. -Washington State Department of Health
Get Free Program Assistance • Online promotions and resources at tpchd.org/smokefreehousing. • Email George Hermosillo at ghermosillo@tpchd.org for more information.
Good for Business, Good for Health
It Pays to Go Smoke-Free Rental Housing Journal On-Site · February 2018
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Rental Housing Journal On-Site
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Rental Housing Journal On-Site
Rents Unchanged in December but Still Up 2.5% Year-Over-Year
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he average multifamily rent in the U.S. stood at $1,359 in December, unchanged from November but a 2.5% year-over-year increase for rents, according to a survey of 121 markets by Yardi Matrix. Strong demand, the economy’s solid footing and a robust job market offer encouraging signs that growth will continue in 2018. Rents were down 0.3% in the fourth quarter, which is only the second negative quarter of growth nationally since the second quarter of 2010 (rents also fell 0.2% in the fourth quarter of 2016). “Although the results are somewhat negative compared to recent history, what’s notable is how consistently strong the market has performed during the entire recovery,” Yardi Matrix writes in
the report.
Outlook for 2018 rents still good especially secondary markets The question for 2018 is how much more steam is left in the market, whether the deceleration will continue or if it will level off or turn negative, the report says “Our view is that growth will continue at roughly the same rate nationally, led by strong demand. The economy shows no signs of slowing down, as GDP comes off two strong quarters and should get at least a boost from lower corporate and personal tax rates, while job growth continues to impress. “Combined with the growth of the young adult population, household formation should remain robust. The consistent national numbers mask a
great deal of movement on the metro and submarket level. Secondary markets such as Sacramento, Orlando, Las Vegas, Salt Lake City and Colorado Springs with affordable rents and growing populations should see above-trend increases. Business-friendly markets such as Dallas and Atlanta should see a slowdown in rent increases, but see moderate gains nonetheless, while expensive coastal markets such as New York City and markets with excessive supply growth are likely to see little or no gains.
West Coast markets saw weak fourth quarter West Coast markets, specifically those in the Pacific Northwest, were the
weakest on a T-3 basis. Seattle (-0.8%), Portland (-0.5%) and San Jose (-0.5%) saw rents decline due to a combination of oversupply and historically expensive rent levels About Yardi Matrix: Yardi Matrix, formerly known as Pierce-Eislen, Inc.®, was founded in March, 2000, and acquired in July 2013 by Yardi Systems, Inc., a Santa Barbara, California software company focused on commercial real estate industry applications.The Yardi Matrix apartment information service is a high-performance system with the sole function of supporting the commercial apartment industry’s dominant participants. The company's services monitor the 50+ unit apartment universe from the property level to the submarket/market level in a form unique within the commercial apartment information industry.
7 Types of Kitchen Countertops for Your Apartments
The maintenance checkup this week, provided by Keepe, looks at 7 types of kitchen countertops for your apartments and which works best for you. Appliances aren’t the only thing that can make or break an apartment property’s kitchen: countertops take up the majority of the kitchen space, affecting the look and feel of the room but also its functionality. In most cases, property managers and landlords tend to opt for countertop materials that either look appealing or that are most affordable or easy to repair. While this is understandable, it is important to keep in mind that the best kind of home design - from furnishing and decor to basic construction - should aim to thoughtfully combine aesthetics, practicality and affordability. The following guide reviews the qualities of common countertop materials and their pros and cons to help you choose the best material for your kitchen countertops.
mineral fragments with heavy-duty resins. It is durable and chip resistant, and it’s fairly priced at slightly above granite but still below marble. It’s also considered to be environmentallyfriendly as it is created by combining waste stones and not mined. Overall, quartz is functional, affordable and practical. The only downside to note is that some people find the look of quartz to be too uniform, which can miss the mark for those who like the natural irregularity of marble; this being said, new improvements in manufacturing technologies have actually allowed quartz production to become more advanced and create more sophisticated patterns.
Granite Granite is a natural stone, which is appealing for those preferring its naturally occurring, more variegated look. Granite is not as durable as quartz, but it is still scratch, stain and chip resistant. Manufacturers explain that darker-colored granite is denser, which increases its durability due to the fact that it is less permeable. For this reason, lighter-colored varieties might require sealing procedures, which also means that those varieties are going to be more demanding when it comes to upkeep over the years.
Quartz (or Engineered Stone) According to the National Kitchen and Bath Association, manmade quartz (not to be confused with natural Quartzite) is now the top selling material for kitchen surfaces. This is likely due to the fact that it is more stain and scratch-resistant than granite, the second most commonly utilized Marble Marble is a timeless favorite when it material. Quartz is made by combining Rental Housing Journal On-Site · February 2018
comes to kitchen countertops because of the way it adds a unique touch of elegance. Marble is also fairly affordable - often being considerably cheaper than quartz and granite - and is widely available, which makes repairs and maintenance easy. Additionally, those who are passionate about cooking, baking and particularly pastry-making are drawn to marble’s naturally cool temperature. Unfortunately, marble is quite porous, which makes it vulnerable to scratches and permanent staining. Opting for marble countertops means having to be very careful and mindful of which foods and condiments one might want to avoid exposing marble to, and always ensuring that surfaces are thoroughly cleaned.
Solid Surface Solid surface is specifically made to resemble natural stone while being actually composed of artificial polymers and resins that are mixed with mineral dusts. This makes solid surface affordable and easy to maintain, requiring no sealing procedures and with most technicians having access to readily available materials for replacements and patchrepairs. Unfortunately, solid surface countertops are vulnerable to high heat and scratches: manufacturers encourage paying close attention to what the countertops are exposed to, especially when it comes to sharp tools
or hot cookware. Generally, scratches and surface damages can be repaired by buffing the surface, but this implies having to hire a technician on quite the regular basis.
Tile Ceramic tiles are easy to replace when broken or damaged, and allow for plenty of customization. One of the main downsides to ceramic tiles is the grout in between them, which tends to easily collects dirt and stains that are often hard to successfully clean off. While they’re easy to replace, it can be easy for tiles to exhibit chipping and cracking over time as a result of accidental impacts. Tiles are generally covered with a glossy protective enamel that can rub, chip or fade off over time, which is why it’s best to avoid aggressively scrubbing the tiles. Laminate Laminate became quite popular during the 1960’s and 70’s, when the idea of “plastic everything” started taking over. Laminate is created by layering sheets of paper and resins, with pressed Kraft paper layers (the same paper material as grocery bags) being the most common: it is inexpensive and extremely easy to replace on a tight budget. However, the advantages of low costs come with a series of disadvantages: laminate melts and ...continued on page 6 5
Rental Housing Journal On-Site
How to Make Apartment Move-In Easier for Tenants By John Triplett
T
he apartment move-in process can often frustrate both tenants and property managers as it is not just the physical move-in. It is all the processes that need to be done before that moving truck ever shows up. Landlords and property managers know that tenant communication is one of their biggest challenges. Technology can improve that communication, including digital tools that improve the move-in experience. Millennials especially appreciate easyto-use technology from apartment management. “The issue for the resident is the average American takes 10 to 15 hours to just deal with the actual process of moving,” said Ash Bell, vice president and executive director of property management for moving website Updater.com, in an interview with Rental Housing Journal. “And it is not only the physical move,
but the process of moving. Think of all the things from utilities, to forwarding the mail and the businesses you interact with on a day-in-day-out basis. All those companies need to be notified of your new address. You need to turn off utilities at your current place and turn them on at your new place. If you’re moving into an apartment that requires renter’s insurance, you need to get that renter’s insurance to protect your
assets,” Bell said. And the list goes on. “You need to book a moving company. You need to reserve an elevator if you’re moving into a class A property in the city. There are just hundreds of tasks that a person needs to deal with when they look at moving,” Bell said.
Communication is key to solving apartment move-in issues “Single-family management is the
same as multifamily as far as some of the move-in problems,” Bell said. With larger multifamily properties, “maybe they have it on more of a mass scale because they may have a 400unit property that has people moving in every day, where with a 50-unit property the likelihood is that we only have one or two moves a month. But it’s still all of the same issues. “There’s just a lot that every stakeholder in running a property encounters when it comes to moving,” Bell said. And it is what he looked at in developing the technology. Three moving stakeholders in multifamily: • The resident • The site team • The ownership “Those are the only three stakeholders so any time you look at processes or technology, you have to filter through those three stakeholders. If it brings value to any one of them, it’s something ...continued on page 16
7 Kinds of Kitchen Coutertops ...continued from 5
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scratches easily, and overall, opting for laminate countertops does not add value to the property. Laminate cannot be recycled and its production features the use of numerous chemicals, making laminate not very “green”.
Butcher Block Butcher block countertops bring the warm and rustic look of natural wood to the kitchen. To make butcher block countertops, thick slabs of wood generally maple, bamboo, cherry or red oak - are assembled with heavy-duty glue, and their different arrangements create different surface patterns. Butcher block is very difficult to care for as experts recommend avoiding covering the wood with sealant, to both maintain the natural look of the wood but also to avoid exposing food to the chemicals used for sealing. The issue with having unsealed wood is that
discoloration and even rotting can be very likely to happen due to water and moisture exposure. To best protect the wood, butcher block surfaces need to be oiled every six months: manufacturers warn against taking the “DIY” route as many have damaged their countertops by opting for cooking oils, instead encouraging the scheduling of regular oiling procedures by professional technicians. Even when oiled, wooden countertops are not scratch or heat proof: very minor damages can be fixed by sanding the wood and re-oiling the area - again, a procedure that is best left to professionals. Over time, they will develop a natural patina: some really enjoy the look of “aged” wood while others do not, so it’s important to keep this aspect in mind. •
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Company Acquires Lighthouse Apartments ...continued
from 1 shopping and entertainment hub popular with the locals and minutes away from the train station connecting Kent with Seattle Downtown. Some of the community amenities include business center, clubhouse with TV lounge, garages, fitness center and sundeck. Freshwater is planning valueadd in-unit improvements to offer better homes to the residents. “The cost of housing in Seattle has increased significantly, which has driven residents to the suburbs,” Corey Marx, Managing Director at JLL, the firm brokering this sale said in the release. “As a result, Kent and other suburban markets in the region have experienced strong rent growth.”
Lighthouse will be managed by Coast Real Estate Services, the largest property management company in Everett, with 16,000 apartments in Washington and Oregon under its management. Freshwater Investments is a California based private equity real estate investment firm creating opportunities for private and institutional investors to diversify portfolios and gain attractive returns through co-ownership of multifamily housing properties. For more information visit http://www. freshwaterinvestments.com •
Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
7 Pest Preventative Maintenance Steps ...continued from 1 water by regularly checking whether pipes, AC units, gutters or downspouts leak or allow water to accumulate; scheduling seasonal maintenance and timely repairs for those systems is ideal. No. 3 - Clogged and debris-filled gutters can make for a cozy hiding spot: making sure that gutters are regularly cleaned avoids this issue. No. 4 - Regular trimming of trees and plants located next to windows and entryways can prevent branches from allowing pests to gain access to them. No. 5 - All pests are naturally drawn to food, both inside of homes and as found outside in trash cans and disposal areas. Investing in trash cans and bins made of heavy, tough materials that have tight, sealable lids works best for keeping pests from identifying a property as an attractive, food-secure nesting place. Heavy-duty containers also make it difficult for raccoons and possums to force their way into garbage storage areas. No. 6 - Some pests can utilize chimneys as access points and nest in attics and roofs. Having a professional install wiring or screens on chimney gaps can block access. No. 7 - It is fundamental to encourage tenants to be mindful about safe food storage and disposal of organic material. Inside the home, food should be properly stored inside tight containers and fridges. Garbage should be disposed of in a timely manner.
severely affect the health of tenants as their droppings and cast-off skins are known to aggravate asthma, allergies and other breathing conditions. This is a pest preventative maintenance step you should take seriously.
Mice/Rodents The lineup of unwanted potential pests Ants Ants are drawn to foods that most humans tend to consume fairly regularly: meat, starches and sweets. While most types of ants nest and live outside, they can easily detect nearby food sources and once found, they return regularly. In fact, ants release a chemical designed to guide them back to the newly found food source, which also indicates this to other ants in the colony. Infestations can easily get out of hand once the thousands of specimens from a certain colony learn where to go for food, which also increases the likelihood of indoor nesting. Cockroaches Cockroaches are nocturnal creatures, which makes them much more difficult to spot. Experts warn that in most instances, spotting a first cockroach is likely an indication of an entire colony having nested within the property. Aside from their unpleasant appearance, cockroach activity can
Just as for ants and cockroaches, food is the main culprit for attracting mice to human homes. Mice represent a serious threat for the safety of tenants as they can carry fleas and diseases that can be severely harmful to humans, such as meningitis. Tenants can be easily exposed to these harms as mice contaminate spaces with their fur and droppings. Mice can take over properties quickly because of their year-round, rapid breeding. Their presence can be quite destructive due to their chewing abilities, which can damage furniture, wiring, and even walls.
humans and they feel trapped and threatened. For this same reason, they can endanger pets, especially cats and smaller dogs. Raccoons and possums can also carry rabies, which makes them that much more pressing to invest in proper pest preventative maintenance measures. Summary: These simple 7 pest preventative maintenance steps can save you a lot of headaches and keep your tenants happy and avoid over-reacting over pests in their rental housing., Keepe is an on-demand maintenance solution for property managers and independent landlords. Keepe makes hundreds of independent contractors and handymen available for maintenance projects at rental properties. Keepe is available in the Greater Seattle area, Greater Phoenix area, San Francisco Bay area, and is coming soon to an area near you. Learn more about Keepe at http://www.keepe.com
•
Raccoons and Possums Due to their considerably larger size, those pests are better able to defend themselves once they encounter
Cash Flow from Car Charging
I
f you own an apartment building with parking spaces, you have just struck oil. New technology creates significantly more electric capacity to charge cars in your garage or lot. Car charging is a new source of revenue. Parking spaces with car chargers rent for up to $50 more per stall. Early adopters of car charging will realize more income and less vacancy. The cost of electricity can be billed back to the tenants. Electric and chargeable hybrid cars are a rising share of the automobile market. Are you ready for them and the power that they will need to charge? Have you received inquiries yet from tenants looking to charge cars? If not, you soon will. Adding capacity for car charging can be expensive, ranging from $30,000 to $100,000 depending on a number of variables: the size of your building, location of the electric strike, size of the main feed conduit, size of the electric room and the number of chargers wanted. With adaptive power allocation, you don’t need to bring in additional power. Your existing capacity is all you need. . Adaptive power allocation means redirecting the available unused tenant electric capacity to car chargers. It redirects power instantaneously to and from chargers as available. If a stove is off that power can be used to charge
cars. This was never possible before. Suddenly every building has capacity to charge five, ten, twenty or partially charge up to a 100 vehicles using existing power. Drivers simply enter their car type, miles desired, and time of departure. The load management controller in conjunction with smart chargers does the rest. This comprehensive system bills vehicle owners for consumed power, it then notifies via a user’s smartphone the end of a charging session. For planning purposes, a tenants charging history is used to predict future charging requirements. electric environmental The price of extended range electric vehicles (over 200 miles on a charge)
Rental Housing Journal On-Site · February 2018
has now come down to $35,000. For a $35,000 base price a driver can buy a Chevy Bolt or a Tesla 3. For $25,000 they can buy the lower priced Nissan Leaf with a range of 150 miles. This puts electric vehicles within reach of most middle class buyers and each of these buyers will need charging. 13 new entries of plug in cars just this year put electric vehicles in the price range for a much higher percentage of your tenants. Market penetration is increasing rapidly. Tesla is ramping up production and has over 500,000 reservations, the Chevy Bolt is selling at 1150 per month and the Leaf about 1200 per month. Plug-in and electric cars are expected to increase market share from 3% to 15% in just a few
years. Pollution and environmental concerns have the largest economies in the world investing in electric vehicles. Be prepared for those tenants looking for the convenience and value in having car charging stations available near their residence. The demand is coming. The winners will be those that control infrastructure cost through adaptive power implementation, add value to their buildings, and are prepared for the next generation of car buyers. Peter Vierthaler has been a multifamily real estate developer for 30 years, with a focus on apartment repositioning. He has taken a strong interest in clean technology and how it can be applied to the multifamily industry. Peter can be reached at peter@northwestpartnersllc.com or at 206-498-4708. •
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Rental Housing Journal On-Site
Dear Maintenance Men: By Jerry L'Ecuyer & Frank Alvarez
work well to deter vandals. (If you have a sense of humor, install motion activated water sprinklers.) 3. Planting vines or bushes along a wall or the side of the building is a good long-term solution. As the landscape grows, it will make it more difficult to graffiti your walls. 4. Use an anti graffiti paint. The graffiti will easily wash or wipe off making repainting a thing of the past.
Dear Maintenance Men: One of the maintenance chores I do are caulking and sealing shower/tub fixture flanges and shower walls. My problem is getting the caulking to dry before a resident uses the shower. Any Suggestions? David Dear David: A lot of people will say: “Just tell the resident not to use the shower till the caulking is dry”. Well it doesn’t work and by the time you are driving away from the building, your resident is already taking a shower and your fresh caulking is washing down the drain. Your caulk should cure at least 24 hours before use. Water based latex caulking is easy to use, but very susceptible to water until it is cured. Try using a silicone or polyurethane based caulking for doing tubs, showers, toilets, sinks or other wet locations. It tends to set quickly and will repel water during its cure time. Another solution we have found works well with very busy showers is to remove all the fixtures, including the shower head & arm, valve handles and tub spout, before caulking. (A bit extreme, but effective) We then plug the shower head and tub spout with
a capped pipe. Then caulk the tub/ shower. We come back 24 hours later and reinstall all the fixtures. One more thought; if you have sliding shower doors for your tub, check the bottom track. If it is loose, do not caulk until the track is removed, cleaned and dried. Reinstall the track with new adhesive caulk to hold it down and caulk the edges to keep the water out. Dear Maintenance Men: My building gets hit by graffiti on a regular basis. How can I stop this curse? Jim Dear Jim:
We understand. Our company maintains several properties that attract graffiti like a magnet. There are several solutions that may help. 1. Painting over graffiti as quickly as possible will help deter future vandalism. We recommend painting over the same day or within 24 hours of the graffiti appearing on your property. Graffiti vandals like to advertise. By removing the graffiti quickly, the less recognition the vandals will receive, thus making your building less attractive to graffiti taggers. 2. Install lighting in areas prone to graffiti. Motion activated lights also
Dear Maintenance Men: I have a resident who is complaining the garbage disposal smells. I have tried running lemon slices and ice cubes to clean the disposal unit. It works for a short time, but the smell comes back. What steps do you recommend for resolving this problem? Barbra Dear Barbra: The smell may come from a number of places. 1: The first and easiest to check is the rubber splash guard that keeps things from falling into the disposal. Remove the rubber splash guard and turn it inside out. Clean out the debris that have collected and wash with soap and water. ...continued on page 17
Problem tenants? Send them packing! Problem tenants? Send them packing! with the help of…
with the help of…
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Rental Housing Journal On-Site · February 2018
711 Powell Ave. SW, Suite 101 Renton, WA 98057 Ph. 425-656-9077 • Fax. 425-656-9087 admin@wmfha.org
Executive Director – Jim Wiard • Board President – Sheri Druckman, CAPS • Vice President – Laura McGuire, CAPS Treasurer – Mike Simons • Secretary – Shar Eller • Vice President of Suppliers Council – Kenneth Baff Immediate Past President – Becky Sanders, CAPS
Advocating for Our Industry
A part of our association’s mission statement is “Advocating for legislation equitable to our industry and the community.”
O
ver the past several years, the rental housing industry has been under attack from tenant organizations, elected officials and the media. There has been a lot of misinformation and political bias that has entered the discussion regarding rental housing and housing affordability. Demand for rental housing continues to increase as the percentage of renters increases across the country. The Seattle metro area, for instance, will need to add 98,228 new apartment homes by 2030 to meet the expected demand for rental housing. Rental housing continues to be an important economic driver to local communities. Apartments and their residents nationwide contribute $3.5 billion to the economy every day. Apartment construction and management operations have contributed $15.5 billion in economic benefits to our area, and supported 146,800 jobs. In order to get to the 98,228 apartment homes needed to meet demand, state and local policies must encourage and incentivize the construction of additional housing that our area needs to meet the high demand of those who want to live in the Pacific Northwest. Legislative efforts that create barriers to apartment construction make it that much more difficult to foster an environment of affordability and create housing that’s affordable at all income levels. In the Seattle market, most of the new housing built in the central city core is luxury housing because the cost to build units of housing is increasing disproportionately to the need. The price of both labor and materials continue to increase, which pushes the costs of new construction higher. Higher construction and operation costs all but require developers of rental housing to build high end housing, which skews the average rents reported by data sources. As a result, new housing, particularly the luxury units built in the core, have generated undue media and political scrutiny. Renters are feeling pressure from both sides. Since the Great Recession, wages have remained largely stagnant. Taken together with the increase in costs to build, the market is putting pressure on renters. The increase in rent over the past eight years has spurred conversations about housing affordability and the desperate need for more affordable housing. The
housing being built falls short of the housing needed for all renters living in the Pacific Northwest and for those moving to this area daily. Housing directed at families with incomes less than 50% AMI is by far the most needed housing, yet is the most difficult to build in this political and business environment. Apartment demand is growing, and the industry needs to keep up. However, producing enough apartments to meet demand requires new development approaches, more incentives and fewer restrictions, as well as increased funding for apartments designed for our residents at the lowest income levels. The Washington Multi-Family Housing Association has increased our advocacy and education efforts in light of the constant attacks to our industry. Balanced and effective legislation needs to be made collaboratively. In the recent legislative session in our state capitol, an effort to bring rent control to Seattle was a high priority for tenant advocate organizations and elected officials, despite the overwhelming historical evidence that these policies harm those looking for an affordable apartment to call home. Fortunately, this unpopular policy did not garner support in Olympia and died in its committee. WMFHA’s Government Affairs team, in partnership with the Government Affairs Committee, strives to build strong, healthy relationships with public officials at the federal, state and local level. Our role is to be aware of any legal or political trends, policies, bills or ordinances which might affect the multi-family industry, and advocate support of or opposition to any policies that impact our members. These strong relationships enable WMFHA to educate policy makers on the effect and any unintended consequences potential legislative action will have on the rental housing industry, and the importance of the rental housing industry to the local economy. Our growing grassroots network is working to ensure our voices are heard. At the same time the Government Affairs team provides critical educational opportunities to all members on changes to residential landlord-tenant laws across all jurisdictions and provides frequent seminars to our membership on specific policy issues.
From fair housing basics to limitations of resident screening, WMFHA makes complicated laws easy to understand and apply to on-site multifamily housing management. At our annual Day on the Hill grassroots advocacy day in Olympia recently, representatives of the housing industry met with our state legislators to discuss rent control and other policies that would negatively impact the rental housing industry, as well as some proposals which would positively impact rental housing and the residents and communities we serve. The Washington Multi-Family Housing Association Political Action Committee is an essential arm of WMFHA’s government affairs program. WMFHA members contribute to the PAC, and the PAC in turn provides an opportunity to meet with and educate legislative candidates on the importance rental housing plays to our economy, and to discuss issues crucial to our members, their employees, our residents and the multifamily housing industry at large.
Collectively, our members have a stronger voice on legal and legislative matters when we can show that we are a large organization with a consistent, powerful message. The goal of our members and our association is to provide excellent service to the owners of multi-family communities, the residents that reside within the communities, and provide the professionalism, respect, quality, and integrity, ensuring a positive public image of our work. We continue to act proactively on issues facing our industry, respectful of the opinions of others, and faithfully exhibit a duty of care as a steward of housing opportunities for all. To become involved in this great organization in 2018, call us at 425-656-9077 or visit our website at www.wmfha.org. Follow us on Facebook for up to date information on association activities. For more information on apartment demand, visit www.weareapartments.org. •
Advertise in Rental Housing Journal On-Site Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly. For more info call 503-221-1260 w w w. rentalhousingjournal.com Rental Housing Journal On-Site · January 2018
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Rental Housing Journal On-Site
Criminal Background Check ...continued from 3 No blanket denials If a resident or applicant is denied housing because of a criminal history, you should be able to show how the criminal conduct affects your ability to protect residents’ safety and property. As HUD states, you must be able to show that a policy “accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not.” Be consistent Don’t forget the importance of being consistent. If you make an exception to your standard policy for criminal background checks for one prospective or current resident, you must offer the same exception to other prospects or residents who are in similar situations. Take some time in this New Year to evaluate your screening processes to make sure they do not produce a disparate impact. Remember, policies may consider criminal history in appropriate way, but should not contain exclusions that are arbitrary or too broad. For more information, review the full text of HUD’s guidance here.
through professional education. She spent over 10 years working with K12 Inc.’s network of online charter schools - measuring learning, developing learning improvement plans using evidence-based strategies, and conducting learning studies. Later, at Kaplan Inc., she worked in the vocational education and job training divisions, improving online, blended and face-to-face training programs, and working directly with business leadership and trainers to improve learner outcomes and job performance. Ellen lives and works in Maryland, where she was born and raised. For nearly two decades, Grace Hill has been developing best-in-class online training courseware and administration solely for the Property Management Industry, designed to help people, teams and companies improve performance and reduce risk.
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Ellen Clark is the Director of Assessment at Grace Hill. Her work has spanned the entire learner lifecycle, from elementary school
We help clients resolve landlord-tenant cases involving evictions, litigation, fair housing complaints, leases, and other tenant disputes.
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Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
253-565-2488 Rental Housing Journal On-Site · February 2018
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Rental Housing Journal On-Site
New Tax Law Holds Favorable Prospects for Commercial Real Estate Potential to Boost Space Demand and Capital Flows Marcus & Millichap
favorable tax treatment will encourage investors to increasingly focus on after-tax yields when comparing their investment alternatives. On an after-tax basis,commercial real estate could offer a much stronger risk-adjusted return than options such as dividend stocks and bonds. This could entice additional passive capital to flow to the sector through syndicates, partnerships and other pass through funds. This influx of capital,should it manifest, could place downward pressure on cap rates.
N
ew tax law retains key provisions for real estate investors. The highly anticipated tax reform recently signed into law by President Trump retained numerous key commercial real estate provisions. The1031 tax-deferred exchange, the mortgage interest deduction for investment real estate and asset depreciation had few material changes. This consistency in tax law will enable investors to move forward with most of their existing investment strategies. That said, there are many provisions in the new tax law that will have a more nuanced effect on the sector, and these more subtle adjustments could create significant new opportunities for real estate investors.
Finalization of tax rules to reduce uncertainty. Over the last
year, elevated uncertainty generated by the range of potential government policy changes, including tax laws, caused many investors to move to the sidelines. A more cautious outlook pervaded the industry as investors awaited clarity on taxes, fiscal policy and a change in Federal Reserve leadership. This
Tax-induced behavior changes will be meaningful. In addition
perspective could begin to ease as the implications of the new tax law firm up and investors better understand how the new rules will affect their investments. The new tax plan offers generous tax cuts to corporations and pass-through entities such as Limited Liability Companies(LLCs), and investors may see the new tax rules as an opportunity to reconfigure their portfolios. The new tax structure will apply to 2018 income for tax filings in 2019.
Reduced taxes on pass-through entities may boost capital flows.
Perhaps more important than the modest changes to the core commercial real estate tax rules that investors have been most focused on is the reduction of taxes on pass through entities. Owners of these types of companies will enjoy a 20percent deduction on pass-through income, though there are several restrictions that will apply to this deduction. This
*Rental Housing Property Management • Single Family home rentals • Condo / Townhome property rentals • Multifamily rentals • Apartment complex rentals
to the direct effect the new tax law will have on commercial real estate investments, indirect effects could be equally important. The increased standard deduction and limits on local property and income tax deductions could significantly alter housing demand and behavior. At the same time, the elimination of the personal mandate of the Affordable Care Act (Obamacare) could impact long-term demand for healthcare real estate. The new rules could also spark increased consumption spending and more business investment into infrastructure. ...continued on page 18
*Homeowners Association Management *Comercial Property Management
Protocol Property Management is one of Puget Sound’s leading property management companies. For 25 years we have been managing rental properties for investors and homeowner associations in Seattle and the Greater Eastside. The property management services we offer in Seattle, Bellevue, and the surrounding cities include single-family rentals, multifamily rentals, commercial property management, and homeowner association management.
For a free consultation and rental property evaluation, please contact leasing@protocolpm.com, or 425-467-1436. 14711 NE 29th Place, Suite 216 Bellevue, WA 98007 • www.protocolpm.com 12
Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
We do it ALL for Rental Housing! Let us earn your trust & respect! At Construction Expeditors we understand investors’ needs because we are investors ourselves, and have been for 25 years. Whether it’s a complete remodel of multiple units or ongoing maintenance to retain the value of your building, we treat your property as if it were our own. We guarantee quality workmanship, excellent pricing & good communication on every project.
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Rental Housing Journal On-Site
Seattle’s Flourishing Multifamily Market on Track ...continued from 1 cap rates that often fall below 5 percent. A slower pace of completions this year will divert an even greater investment volume toward existing assets as buyers position to realize additional performance upside. Complexes in proximity to major employment
centers will be eyed by institutions, while private parties will expand search parameters for value-add opportunities to capture higher yields. Buyers will be active in the outlying cities of Everett, Lynwood and Tacoma as assets often trade with cap rates that are at least 100
basis points above similar properties in Seattle’s urban core. Developed by Marcus & Millichap Research Services. The Capital Markets section was co-authored by William E. Hughes, Senior Vice President, Marcus & Millichap Capi-
tal Corporation. Additional contributions were made by Marcus & Millichap market analysts and investment brokerage professionals nationwide.
NMI Rank 1, up 1 place
The Seattle-Tacoma market moves up to the top position in this year’s NMI on robust demand and strong rent gains.
Employment up 2.0%
The workforce expands by 40,000 jobs this year, marking a slower pace of growth from 2017 as the availability of skilled labor shrinks.
Construction 11,100 units
Following the largest level of completions in more than a decade last year at 15,100 doors, deliveries slow to 11,100 units anticipated to open this year.
Vacancy down 30 bps
A slowdown in construction allows demand to outpace supply growth, dropping the vacancy rate to 3.5 percent at year end. A 40-basis-point climb was posted in 2017.
Rent up 5.4%
Effective rent growth moderates from a 7.1 percent rise registered last year, climbing in 2018 to an average of $1,643 per month.
Investment
Positive demographic trends and robust rent growth will hold investment levels strong. Rising competition for assets in the immediate vicinity of Seattle will spur greater investment in Pierce and Snohomish counties this year.
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Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
Multifamily Managers and Marijuana: Caught in a Pot Crossfire Ellen Clark
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he Grace Hill training tip of the week focuses on the issue of marijuana and multifamily property managers and owners. Editor’s Note: “Grace Hill worked with our attorneys at Haynsworth Sinkler Boyd on this piece. We are grateful for their insights and expertise in navigating this tricky topic!” Multifamily property managers are often caught in a pot crossfire between state and federal laws when it comes to marijuana use in apartments, especially in states where marijuana use is legal. Of course under federal law, marijuana possession is illegal. Pursuant to the Controlled Substances Act, it is classified as a Schedule I substance, which are defined as drugs with no currently accepted medical use and a high potential for abuse. According to the Office of National Drug Control Policy, marijuana is the most commonly used illicit drug in the United States. Multifamily housing providers are generally permitted to prohibit the use or possession of marijuana as part of a smoke-free
policy, but consider being explicit about marijuana in your smoke-free policy. However, thirty (30) states plus the District of Columbia have legalized marijuana either for recreational or medicinal uses. This conflict between federal and state law creates confusion in the multifamily property management industry. As you face questions about marijuana use, it may help to keep in mind that federal law supersedes state
Rental Housing Journal On-Site · February 2018
law. Among other things, this means that you are not obligated to “permit” breaking federal law to allow a resident to do something that is legal under state law. Marijuana and implications for multifamily properties • Multifamily housing providers are generally free to prohibit the use or possession of marijuana as part of a smoke-free policy, even in states
where recreational or medical marijuana use is allowed (but see below explanation regarding accommodations). Consider being explicit about marijuana in your smoke-free policy. Articulate a clear enforcement plan and apply the policy consistently to all prospects and residents to avoid discrimination claims. • Under the Quality Housing and Work Responsibility Act of 1998 (QHWRA), many HUD-assisted housing owners must deny admission to assisted housing for any household with a member determined to be illegally using a controlled substance. The QHWRA also permits owners to evict current residents for their use of marijuana. Marijuana and disability If you receive a request for an accommodation for medical marijuana use based on a tenant or applicant’s disability, you should proceed carefully. The law on this issue is evolving rapidly, and it is advisable to seek legal counsel on these requests. The FHA is clear that a disability “does not include current, ...continued on page 21
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Rental Housing Journal On-Site
Make Apartment Move-In Easier ...continued from 6 you should consider. If it brings value to all three, you’ve got to do it,” Bell said.
An apartment move-in customer service tool Vikki Sherman, senior director of marketing at Fairfield Residential said, “I think it’s a challenging time in a customer’s life, so we really approach the move-in process in particular, as well as the move out, in the eyes of the customer. We’re trying to make their lives easier, simpler, better, the whole process improved, so that they have a good experience when they’ve got a lot of other things happening. “Oftentimes there’s a big life event that is preceding the move, kind of causing a move, whether it’s an addition to the family, a marriage, a divorce, something big in their life that’s happening. So the move has different nuances depending on that, right? It could be a very happy occasion. It could be a sad occasion, and so, in essence, we just want to make sure that we’re offering them something and making that transition a smooth one, and a positive one for them. “The benefits from the property management side of a tool like Updater is, it’s very easy for us to onboard, and implement, and be able to quickly provide the extra level of service to our customer,” she said regarding her company which manages 44,000 units across the country. “In 2017, Fairfield averaged about 1,500 move-ins per month across our portfolio.” “Updater is very quick. They do a lot of the heavy lifting. The email invitation for the resident to use the service is automated, so it’s not anything manual that the property manager needs to do, yet they’re able to give this time-saving tool to a future resident,” Sherman said. Jennifer Staciokas, senior vice president at Pinnacle, seconded what Sherman said about the customer service aspect, “I would say it’s saving more time for the renter than it is for the property manager. For the property manager, the value to them is that it’s an added amenity that they can offer to their renters to make their move-in seamless. She said the property managers are “making sure that they’re letting their clients, as customers, know, ‘Hey, you’re going to be receiving an email. This is the benefit that you’re going to receive from it, and this is what you should do
to utilize that service,” Staciokas said.
How many tenants use Updater when it is offered? Staciokas said Pinnacle saw more than 9,000 moves last November (they have 165,000 units) and invited a total of 9,799 residents to use the tool. She said about 70 percent of the tenants adopted and used at least some features of Updater. Sherman said that overall they have seen about an 80 percent adoption rate of the tool in their properties. “We actually see really good usage of the tool,” Sherman said. “I don’t have the official open rate for a whole year but I would say in the last 90 days, we’ve seen about 80 percent of those emails get opened, which is an incredible open rate to begin with. We see about 60 percent of those invites be accepted. Meaning, someone opens it, they read the content, they say, ‘Yes, I’m interested in this tool.’ Then, the actual usage ends up being at about 50 percent, which is great. I mean, it’s hard to get a customer’s attention during that busy time. “You know, the really fun thing about Updater is, they give you a dashboard. So you can really kind of quantify the results. We find that residents are using about half of the services offered within the Updater tool because there’s things like connecting with utilities, there’s changing your address, there’s sharing your move digitally on social media, there’s moving services. “So when we quantify the tools that our residents are using, and the number of residents over the last 90 days, our residents have saved over 3,000 hours. If they had to manually change their address, if they had to call all these utility companies, they would have spent quite a bit more time,” Sherman said. Three top items most tenants use in apartment move are: • Change of address • Utility changes • Local offers where they can save money Reducing frustration for the property management team “Our customers, today, are expecting things to be frictionless. They like things to be easy. They like things to
be quick. They’re used to doing things online. The ability to offer a customer what they want and need I think definitely reduces frustration for a property management team,” Sherman said. “We’re meeting the demands of today’s customer and it is also a feelgood, right? You’re saving your new resident time. You’re making their move-in experience better. Ultimately, you’re improving the satisfaction with the process. “Once you have happier customers, you yourself are able to focus on the things to make better next. I definitely think it reduces some frustration on the property manager side, in that aspect. “On the customer side, I think our industry certainly has a reputation for doing things in an old-school manner. This is one more way that we are meeting that demand of the techsavvy customer who finds doing things on paper in a manual process to be not in their normal day-to-day experience, right? “They’re shopping online. They’re having food delivered to their house. They’re doing all these things in a digital world, so it makes sense that not only can they lease online, and pay rent online, but they can coordinate some of their move-in details, as well,” Sherman said.
Updater integrated with many companies Bell said Updater is integrated with all of the major property management software companies. And Updater white labels (allows apartments to put their own brand) the service so the apartment community gets the credit and it can fit with core property management tools. “We’re doing all the heavy lifting. The property gets all the credit,” Bell said. He said having a good move-in process helps tenant retention and “statistics have shown that move-in experience - how things go during that time - increases the likelihood that they will renew. “Why waste all those dollars that you deal with from a marketing standpoint to get somebody attracted to your property and ruin it with a really bad move-in experience? If you give them a great moving experience, you’re helping there,” Bell said. A sales tool for the property Bell said Updater can serve as a sales tool for the property. “So if I were a leasing associate and I were taking you on a tour of apartments, I would let you know as I’m showing you a model unit,” Bell said. “I’m showing you the workout facility and the pool, and also say, ‘One of the things that we want to let you know is we understand that moving can be very time consuming and stressful. So one of the things that we do, is we provide a free moving concierge, digital moving concierge to every one of our residents that move in here, and it’s our gift to you. “ ‘It’s going to help you with sorting the mail, booking a moving truck, getting those utilities turned on, getting the renter’s insurance required, notifying businesses of your new
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address. You name it, you’re going to be able to handle it within Updater. And that’s just how much we care for our residents,’ “Bell said.
Cost of Updater to the property In terms of the cost of Updater. com to the property, Staciokas said, “Using the app is a time-saver, and it’s really viewed as an amenity to make a seamless and successful move-in for the renter. “I had several meetings with Updater before we decided to move forward. To me, it was really a no-brainer decision, because it was low-cost for a high-value amenity, which is going to translate into potentially more rentals moving forward,” Staciokas said. What size are the properties using Updater? Bell said the company has many of the top industry leaders deployed. “We have 30 of the National Multifamily Housing Council (NMHC) top 50 fully deployed. I have another couple that are in partial deployment, meaning they’re doing it in phases. “We are all over the place from a standpoint of size, we can have anybody. Obviously as the NMHC top 50 goes, typically so goes the market. But we have some of the largest singlefamily providers in this space. We have some of the smallest single-family providers. We have people like myself that have a few properties that utilize our platform,” Bell said. “The average size I would say is probably the average size in the industry, which is 5,000-, to 7,000-unit portfolios. But again, we have people that have two properties, and we have single-family companies as long as they’re utilizing one of the single family property management providers we integrate with.” Bell said the site has features specific to property managers and others specific to residents. The site sorts them by login. “So residents see something different when they log in than the property manager,” he said. Updater, based in New York City, has just under 100 employees. “A lot of people often say with startups, “Are they going to be around, are they going to be here five years from now?” Bell said. “Well, absolutely yes we are. We’re a very stable company. But I think the biggest thing that I would want to stress is that we’re really excited about some of the features that are coming down the pipeline.” The nation’s leading moving app for property management companies. The company works with real estate brokerages, mortgage lenders, student housing, and others to streamline the move-in and out process. The company describes its tool as “Turbo Tax for moving,” helping with all the tasks involved in a move. Updater works with over half of the NMHC Top 50 Managers and Owners, including full rollouts with Greystar, Fairfield, Pinnacle, Avalon Bay and Village Green, among others. The company was named NMHC’s Apartment Innovator of the Year in 2015, #3 Best Place to Work in NYC according to Crain’s in 2016, and Most Innovative Tech Company of the Year by the American Business Awards in 2016 and 2015.
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Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
Supporting Possible Reforms in Washington Service Animal Law Chester Baldwin, WLA Lobbyist and Attorney at Law
medical authorizations for fake “service animals” online very easily.
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he issue of service animals continues to be a source of confusion for landlords and business owners in Washington who have found little guidance in their attempts to balance the responsibilities to accommodate the disabled with the financial and safety concerns of their businesses. There are two federal laws that address service animals. The Americans with Disability Act (ADA) regulates reasonable accommodations for service animals in public spaces.
Service Animals - Current Problem Due to differences in State and Federal Law, it can be next to impossible for a Washington landlord to understand their rights and obligations when a service animal accommodation is requested by a tenant. This generally happens AFTER a landlord has discovered an undisclosed dog (or snake) at the residence which does not allow such pets (or may require a pet deposit); now the tenant is claiming that it is a “service” animal in order to keep the animal at the residence. Service Animals in Washington have historically been regulated under the ADA by the WA Human Rights Commission (HRC) under the Federal
Possible Service Animal Legislation in 2018 With landlords worse off with enforcement under HUD, the Washington Landlord Association (WLA) Government Affairs Team, as well as other WA housing associations, are working with lawmakers in Olympia and the HRC to determine whether meaningful reforms could be enacted to allow HRC to again educate landlords instead of being hammered by HUD enforcement. authority granted by the Housing and Urban Development (HUD) Agency. But because of a difference in definition between WA law and Federal law, HRC is no longer allowed to do the enforcement in WA state. This means that HUD has direct enforcement actions on WA Landlords currently. HUD’s direct enforcement is bad for WA landlords because HRC’s enforcement was centered around education, and if they found a violation, they would often settle the matter with a class attended by the landlord and no fine. Currently, it is not uncommon for
Dear Maintenance Men ...continued from 8 2: Use a small toilet type bush with soap and scrub the inside of the garbage disposal. This will remove any slime build-up. (For safety reasons, shut the garbage disposal off at the breaker or pull the plug.) 3: Remove the drain trap and clean out any sludge. Many times the horizontal pipe between the trap and the wall may have hard deposits coating the inside of the pipe. The deposits will collect food and debris that may slow the drains considerably. 4: If you have a dishwasher, check the drain line leading from the air-gap or dishwasher to the garbage disposal. It may be full of sludge that will cause a smell to come through the air-gap located next to the faucet. Clean or replace any pipes with deposits or sludge. Check both drain lines for the above problems. 5: Now if you wish, run the garbage disposal with a few slices of lemon and it should smell good and stay that way. Once in a while, throw some ice cubes in the garbage disposal unit to help scrape away any debris.
Note: If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@gmail. com Bio: If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Frank Alvarez is licensed contractor and the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor and Co-Chair of the Education Committee of the Apartment Association of Orange County as well as being Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance. com For more info please go to: www.BuffaloMaintenance.com Jerry L'Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Past President and past Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988.
a landlord to receive a fine in excess of $10,000 if HUD believed that a violation had occurred with regard to a “service animal”. Also, HUD does not distinguish between “service animals” and “comfort animals” in housing matters. This means that there is no training requirements that can enforced by a WA landlord for a “service animal” in their units.
Current Fraud and Abuse in “Service Animals” As a landlord, you are not allowed to ask what medical condition the “service animal” is a reasonable accommodation for, but you ARE allowed to require documentation from a medical professional that this “service animal” will address the medical condition of the tenant requesting the reasonable accommodation. Unfortunately, I tell landlords weekly in my law practice that if a tenant brings a note signed by any medical professional with letters after their name, and that letter says that the tenant’s “service animal” will address the tenant’s issue, then the landlord is likely stuck with the “service animal”. The current problem allows an unscrupulous tenant to claim that any animal is a “service or comfort animal” after being found in the unit with an unallowed animal. Additionally, tenants can currently purchase these
Reform for Fake “Service Animals” Any potential legislation that WLA would support in Olympia will have to have significant modification to the abuse being perpetrated by unscrupulous tenants and fake “service animals” currently. WLA’s Government Affairs Team believes that unscrupulous tenants should be subject to penalty and fine for fraudulently claiming an animal is a “service animal” when it is not. Additionally, creating a standard form that requires medical professional to swear under penalty of perjury that the animal accomodation is legitimate would be a good first step in curbing the abuse currently happening with “service animals”. WLA’s Government Affairs Team will be working with Lawmakers in Olympia, the Washington HRC, and the other stakeholders to determine whether legislation is possible that could bring about meaningful revisions to the current policy and allow enforcement of service animals by HRC instead of the Federal Government under HUD. There will be regular updates about this service animal issue available on the WLA website at www.waapt.org . You may also contact me directly at chet@lobbywa.com if you have any specific questions about service animals or legislation affecting landlords in Olympia. •
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Rental Housing Journal On-Site · February 2018
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Rental Housing Journal On-Site
New Tax Law Holds Favorable ...continued from 18
Tax Law Changes to Reshape Behavior, Hold Implications for Investment Real Estate
A
p a r t m e n t married couples ($6,350 for for married couples. Under commercial real estate demand likely to individuals) then taxpayers the new tax law, the standard through syndicators and rise. The previous received a reduction to deduction has been raised to investment funds that are
tax rules created an economic incentive to purchase a home through itemized deductions. If the mortgage interest and property taxes exceeded the old standard deduction of $12,700 for
their taxable income that effectively offset a portion of the housing payment. The threshold home price to receive this benefit naturally depended on interest rates and local property tax rates but was in the $200,000 range
$24,000 for married couples ($12,000 for individuals), and as a result the threshold home price to benefit from itemized deductions has increased to the $400,000 range for married couples. Because the threshold has increased well above the median home price in most metros, there will likely be a modest reduction of firsttime home buyers, lifting apartment demand.
Long-term prospects of healthcare real estate soften. The elimination
of the personal mandate, a provision of the Affordable Care Act that required people to have health insurance, will reduce the total number of insured by 13 million people over the next 10 years. As a result, about 5 percent fewer people will have health insurance compared with the number that would have been insured if the personal mandate were retained. This will modestly reduce the future demand for healthcare, implying a slight down shift in demand for healthcare real estate compared with projections with the personal mandate. Nonetheless, the aging population will still increase demand for healthcare services over the next 10 years, just not as much as would have occurred with the personal mandate in place.
Market liquidity could rise; net-leased properties positioned favorably. The newly
introduced 20 percent deduction on income from pass-through entities could invigorate investment in real estate. On an after-tax basis, the yields offered by the sector will be even more compelling than under the previous tax structures. New capital could enter
structured to capitalize on the pass-through advantages, but some new investors will enter the market with direct acquisitions. The additional capital will undoubtedly fl ow across a variety of property types including apartments, self-storage facilities, and retail, office and industrial buildings, but a segment that could attract a disproportionate share of the investment is single-tenant net-lease properties. These assets, often occupied by highcredit tenants on long leases, afford passive investors compelling yields that could be structured to benefit from the new pass-through tax rules. In addition, because these types of properties generally require minimal management and are available in a wide range of price points, they are well positioned for passive investors.
Expanded expensing rules benefit niche real estate. Changes to the
Section 179 depreciation rules will favor several niche real estate investments. Under the revisions, business owners will be able to fully expense up to $1 million of depreciable tangible personal property used to furnish lodgings. This change will allow investors with investments such as hospitality, student housing and seniors housing to deduct the full cost of furniture placed in service at their properties rather than depreciating them over multiple years. The rules also extend to roofs, heating, ventilation and security systems in non-residential property. This provision is largely targeted toward small businesses, so the deduction phases out as business investment purchases exceed $2.5 million.
Executive Summary ■ 1031 Exchange: Tax-deferred exchanges have been retained for real estate. ■ Business Interest Deduction: Interest on real estate loans remains deductible for real estate investments, but using this deduction will lengthen the depreciation period for real estate assets. ■ Depreciation: Depreciation time-line remains unchanged if mortgage interest is not taken. If the mortgage interest deduction is used, then the depreciation timeline for commercial properties increases from 39 years to 40 years and for residential properties it rises from 27.5 years to 30 years. ■ Carried Interest: The hold time of assets increases from one year to three years to treat earnings as capital gains. ■ Pass-Through Income: Business owners receive a 20 percent deduction on qualified income generated by pass-through entities such as LLCs, but there are some restrictions. For taxpayers earning over $157,500 (single filers) and $315,000 (married couples), deduction is limited to greater of 50 percent of the taxpayer’s share of aggregate W-2 wages paid by the business or 25 percent of the taxpayer’s share of aggregate W-2 wages paid by the business plus 2.5 percent of the unadjusted basis of all qualified property (structures but not land). ■ Corporate Tax Rate: Maximum tax rate reduced from 35 percent to 21 percent. Generous expensing and depreciation rules on capital expenditures over short-term. ■ Individual Tax Rate: Significant restructuring of personal taxes. Still uses seven tax brackets, but the income span of each bracket has changed and the marginal rates have generally been lowered. Standard deduction has been increased and several deductions have been eliminated or restricted. ■ Estate Tax: Doubles exclusion to $11 million for single filers and $22 million for married couples. This report is not intended and should not be considered tax or investment advice. It provides an interpretation of the potential effects of the new tax law on the commercial real estate market. A tax accountant should be consulted for guidance on specific tax rules.
...continued on page 19
Text REALESTATE-ROI to 44222 18
Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
New Tax Law Holds Favorable ...continued from 18
Tax Reform: 2017 Tax Law Vs. 2018 Tax Cuts and Jobs Act Provision
Old Tax Law (2017)
Tax Cuts and Jobs Act (provisions effective beginning 2018)
Like-Kind Exchanges
Available under current law for property held for investment
Retained for real property only (real estate).
Business Interest Deductibility
Fully deductible for all businesses
Fully deductible for real estate businesses with some exceptions. Limits on interest deductibility apply to firms outside of real estate with exception for businesses with average annual gross receipts of less than $25 million over past three years.
Depreciation of Buildings
Residential 27.5 years, nonresidential 39 years
If the mortgage interest deduction is used, then the depreciation timeline for commercial properties increases to 40 years and for residential properties it rises to 30 years.
Carried Interest
Taxed at capital gains rates if held at least a year
Taxed at capital gains rates if held at least three years.
Flow-through entity: 20 percent deduction available for qualified pass-through income with some exceptions. REIT dividends eligible Business Tax Flow-through entity: Maximum rate of 39.6% REIT dividend maximum for 20 percent deduction. Corporation: Maximum rate of 21 percent. Rates rate of 39.6% Corporation: Maximum Rate of 35% Flow-through entity deduction sunset after 2025. Corporate rate cut permanent. Active Losses
Fully deductible against active income
Deduction of net active pass-through losses against wage or portfolio income limited to $500,000 (married filers) and $250,000 (single filers). Disallowed losses may be carried forward as part of a taxpayer’s net operating loss. Provision effective through 2025.
Individual Tax Rates
Seven brackets ranging from 10 percent to 39.6 percent; highest rate effective at $418,400 (single filers)/$470,700 (married filers).
Seven tax brackets ranging from 10 percent to 37 percent. Highest rate effective at $500,000 (single filers)/$600,000 (married filers). Rate structure expires after 2025.
Standard Deduction
Single: $6,350, Married: $12,700
Single: $12,000, Married: $24,000.
State and Local Taxes (SALT)
State and Local Taxes (SALT) deductible. Available deduction declines for income above $266,700 (single), $320,000 (married).
$10,000 limit on deduction of state and local taxes including property tax and either income tax or sales tax.
Mortgage Interest Deduction (personal)
Deduct interest for primary or secondary residence up to $500,000 (single) or $1,000,000 (married). Home Equity Line of Credit deductible up to $100,000
Deduct interest for primary or secondary residence up to $750,000. Home Equity Line of Credit no longer deductible. Loans prior to Dec. 16, 2017, grandfathered.
Estate Tax
$5.49 million ($10.98 million per couple) exclusion, 40 percent rate, and stepped-up basis for inherited assets
Exclusion doubled. Stepped-up basis retained. Provision after 2025 and tax reverts to current law exemption amount indexed for inflation.
New Tax Law Offers Prospects of Economic Lift
E
conomy starts 2018 with formidable tailwind. The U.S. economy closed 2017 in a particularly strong position, having added jobs continuously for a record 86 months. Unemployment has settled in the low-4 percent range, supporting stronger wage growth, and there are a near-record 6.0 million job
openings awaiting qualified workers. Consumer and business confidence continue to hover near decade-high levels, invigorating retail sales growth and corporate investment into infrastructure. The new tax rules could reinforce many of these trends through the many tax incentives that were created.
Core Inflation Rate / Wage Growth
U.S. Core Inflation vs. Wage Growth Core Inflation
Wage Growth
8% 6% 4% 2% 0% 01
03
05
07
09
11
13
15
17*
10-Year Treasury vs. 2-Year Treasury Yield Spread Tightens 10-Year Treasury
2-Year Treasury
50 pbs
200 pbs
4%
280 pbs
Rate
6%
200 pbs
8%
2% 0%
04 05 06 07 08 09 10 11 12 13 14 15 16 17**
* Through 3Q ** Through December 29
Rental Housing Journal On-Site · February 2018
Corporate tax reductions could offset growth. The likely to boost economy. restructuring of the tax rules
Although there is considerable will likely weigh on the ownerhousing market, debate regarding how much of occupied particularly in states with elevated the corporate tax savings will filter through to workers and home prices and property taxes. the broader economy, several The new tax law affects home sales provisions of the new tax law in several ways: The increased should spark increased corporate standard deduction will modestly investment. Accelerated restrain first-time home buyers, depreciation and expensing rules while limitations on the deduction state and local property New Tax encourage Law Offers Prospects Economic Lift taxes should companies to of of will weigh on upper echelon increase investments into plants Economy starts 2018 with formidable tailwind. The U.S. economy closed housing, particularly in California and equipment, while reduced 2017 in a particularly strong position, having added jobs continuously for a tax rates on the repatriation of and states in the Northeast. The record 86 months. Unemployment has settled in the low-4 percent range, supintroduction of a lower limit on overseas should porting strongerholdings wage growth, and spark there are a near-record 6.0 million job openinterest deductibility, influxqualifi of capital coming back mortgage ings an awaiting ed workers. Consumer and business confidence continue now $750,000 instead of $1 intonear thedecade-high U.S.. Though much to hover levels, invigorating retail sales growth and corporate million, will also weigh on of thisinto capital may be The used fortax rules could reinforce many of these investment infrastructure. new higher-priced home sales. Since stock buybacks dividends,that were created. trends through the manyand tax incentives the increased liquidity should the recession, the housing market has contributed about 3 considpercent Corporate reductionsand likelysupport to boost economy. Although there is spark tax consumption to economic growth, about half erable debate regarding how much of the corporate tax savings will fi lter through economic growth. The natural risk to workers and the broader economy, several provisions of the new tax law of the sector’s contribution levels created by the inflow of so much should sparkwill increased corporate investment. depreciation exof Accelerated the early 2000s. Under and the new capital be rising inflationary pensing rules should encourage companies to increase investments into plants tax law, housing’s contribution pressure. and equipment, while reduced tax rates on the repatriation of overseas holdings likely weaken. taxcoming ratesbackwill should Lower spark an personal influx of capital into the U.S.. Though much of this Fed to keep a watchful eye. should capital may be boost used forconsumption. stock buybacks and dividends, the increased liquidity The increased liquidity and Thespark actual tax savings fl oweconomic growth. The natural risk creshould consumption andthat support consumption levels created by ated through by the inflto owindividual of so much tax capital will be rising inflationary pressure. payers the new tax law have the potential will naturally vary depending on to raise inflationary pressure. Lower personal tax rates should boost a wide range of variables, but the consumption. The actual tax savThe Reserve raisedon its ings consensus that flow through to individual tax payers will Federal naturally vary depending a is that most people will benchmark rate willthree times widesee range of variables, but the consensus is that most people see at least at least a modest reduction lastdiscretionary year and most anticipate an a modest reduction in taxes. will increase income that should in taxes. This willThisincrease three ratewillincreases translate to increased retail sales. This will takeadditional time, as most workers see only discretionary income that should a modest change in their tax withholding in each paycheck, but will in aggregate, it in 2018. The Fed also likely translate to increased retail sales. should boost consumption, the primary drivercontinue of economic growth in U.S. its its efforts tothe reduce This will take time, as most balance sheet by allowing assets workers willslowdown see only could a modest Housing market offset growth. restructuring of the tax acquiredThe during its quantitative theiron taxthe withholding in housing market, particularly in states ruleschange will likelyinweigh owner-occupied easing efforts to mature. Through each paycheck, butand in property aggregate, with elevated home prices taxes.this The new tax law process, theaffects Fed home will sales make it should boost consumption, in several ways: The increased standard deduction will modestly restrain first-time an effort to put upward pressure the primary of on economic homebuyers, while driver limitations the deduction of state and local property taxon long-term interest rates. The growth U.S. es will weigh in on the upper echelon housing, particularly in California and states in the central bank will vigilantly watch Northeast. The introduction a lower limit on mortgage interest deductibility, now Housing marketofslowdown $750,000 instead of $1 million, will also weighfor on liquidity-sparked higher-priced homeinflation. sales. Since the recession, the housing market has contributed about 3 percent to economic growth, about half of the sector’s contribution levels of the early 2000s. Under the new tax law, housing’s contribution will likely weaken.
Prepared and edited by John Chang First Vice President, National Director Marcus & Millichap Research Services Tel: (602) 707-9700 john.chang@ marcusmillichap.com © Marcus & Millichap 2018 www. MarcusMillichap.com The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. No representation, warranty or guarantee, express or implied may be made as to the accuracy or reliability of the information contained herein. This is not intended to be a forecast of future events and this is not a guaranty regarding a future event. This is not intended to provide specific
investment or tax advice and should not be considered as investment or tax advice. Sources: Marcus & Millichap Research Services; BLS, CoStar Group, Inc., Federal Reserve, Moody’s Investors Service, NMHC, Real Capital Analytics, Standard & Poor’s, U.S. House of Representatives, U.S. Senate, U.S. Internal Revenue Service, U.S. Bureau of Economic Analysis, policyuncertainty.com • 19
Rental Housing Journal On-Site
Do You Know How to Respond to a Sexual Harassment Complaint? By Ellen Clark
insurance company. There may be insurance to cover the allegations of the complaint. If there is coverage, the insurance company will only be there to help you if they are notified early. It is a situation we all hope we never have to face. However, in this time of increased awareness around harassment, it is important to have a game plan for a quick and appropriate response to harassment complaints.
H
UD aggressively pursues violations of The Fair Housing Act (FHA) involving harassment in housing and complaints often name property managers directly, so do you know how to respond and stay on top of the situation?
Remember courts have consistently recognized sexual harassment as a form of discrimination that violates the FHA. In addition to individual property managers directly, the complaint may name the corporate entity or owner associated with the complainant’s housing. Any individual or company that has witnessed or experienced housing discrimination, including sexual harassment, may file a complaint with HUD, free of charge
4 ways to respond if you find yourself facing a sexual harassment complaint If a complaint has been filed against you, you will be notified by HUD, and you will have 10 days to respond. No. 1 – Prioritize mail from HUD Due to the tight window a company has for responding to a complaint, make sure
20
anyone responsible for collecting mail at your facilities is trained to give mail from HUD priority attention and to forward it to the appropriate person immediately. No. 2 – Respond to complaints Although filing an answer is not mandatory, it is strongly encouraged. Responding gives you an opportunity to give your version of the story and provide sufficient information that may convince HUD that it should not pursue the matter further. No. 3 – Involve legal counsel early
Because your answer will become part of the official case record and any representations can and will be used against you in future proceedings, it is strongly encouraged that you seek the assistance of legal counsel in responding to a HUD complaint. In addition, legal counsel can likely negotiate an extension of time to respond. No. 4 – Notify your insurance company early As soon as you know a complaint has been filed, you should notify your
Ellen Clark is the Director of Assessment at Grace Hill. Her work has spanned the entire learner lifecycle, from elementary school through professional education. She spent over 10 years working with K12 Inc.’s network of online charter schools - measuring learning, developing learning improvement plans using evidence-based strategies, and conducting learning studies. Later, at Kaplan Inc., she worked in the vocational education and job training divisions, improving online, blended and faceto-face training programs, and working directly with business leadership and trainers to improve learner outcomes and job performance. Ellen lives and works in Maryland, where she was born and raised.
•
Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
Caught in a Pot Crossfire ...continued from 15 illegal use of or addiction to a controlled substance.” However, a tenant may be taking medical marijuana to treat a condition that is considered a disability. Even if a person has a recognized disability, there are reasons that an accommodation to smoke marijuana might not be considered “reasonable.” For example, an accommodation that allows conduct in violation of a federal law constitutes an undue burden. Further, other problems exist such as second-hand marijuana smoke traveling through ventilation systems and bothering residents in common areas. However you proceed, be consistent with all prospects and residents in similar situations. This is just the tip of the iceberg on this topic, and a lack of relevant case law makes it tricky to navigate. The courts will likely address this issue in the coming years and provide some clarity. Until then, consider your policies carefully, and err on the side of consulting an attorney as you face marijuana-related issues at your multifamily properties. A Colorado law professor gives his view In addition to these tips above from Grace Hill, Sam Kamin, a law professor and director of the Constitutional Rights and Remedies Program at the
University of Denver’s Sturm College of Law in Colorado, posed several questions on this issue for multifamily owners and property managers in a recent article from the Urban Land Institute. He states that getting a federally backed loan from a bank or lending institution means the property owner taking out that loan must agree to abide by all federal laws, such as those including marijuana use. “Could a federal agent arrest a property manager for knowingly allowing medical marijuana use in an apartment unit? If the owner established a policy that allowed for observation of state rights—despite the federal conflict—could the principals be arrested? The answer appears to be yes, albeit unlikely. Property owners who allow marijuana on their premises also risk losing their buildings to the federal government through civil forfeiture cases. “The federal government isn’t actively doing that, but it remains a remote possibility,” says Kamin. One might argue that “the safest course is to prohibit all marijuana,” says Kamin. “Amendment 64 explicitly gave property owners [in Colorado] the right to exclude
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21
Rental Housing Journal On-Site
6 Types of Fencing for Your Rental Property
Wood fence a traditional favorite requiring maintenance
Vinyl easy to install but can be damaged
Wrought iron strong and saves on maintenance
encing for your rental property is the maintenance checkup this week, provided by Keepe, who reports getting a record number of repair requests from property managers and tenants about weather-damaged and broken fences this winter. When it comes to installing a fence on your rental property the kind of fencing you choose can make a serious difference on your finances, maintenance and most of all, the safety of your tenants and your property. Broken fencing can be an inconvenient and time-consuming expense. Being prepared against costly last-minute repairs is possible, and it begins with knowing how to best protect your investment.
Different kinds of fencing materials have different maintenance needs, which are fundamental to explore for the purpose of selecting which fencing option really is best for both your needs and expectations. Wooden fences are a traditional favorite and have historically been an iconic component of American homes everywhere. This is likely due to the fact that wood is a widely available material, and a great number of varieties especially pine and cedar, two of the most commonly used for fencing - are rather inexpensive. Different cuts, grains, colorations, staining treatments and painting styles make wooden fences very versatile as they are easy to
customize to match homes and gardens as desired. The main downside with wooden fencing is the fact that it requires regular maintenance work to both last and look appealing: it can be severely damaged by weather, vegetation and parasites. The best available way of protecting wooden fencing is ensuring that the wood is regularly treated by a professional, who can apply sealants, stains and preservative coatings. A pricier option, “Pressure Treated” (PT) fences, are made with wood that has been thoroughly treated with preservative chemicals when manufactured, and generally come with special warranties. Overall, our experts suggest to avoid letting vegetation to
F
grow on the wood to protect it from excessive moisture, and to have it regularly treated to protect it against parasites, like termites. It’s important to keep in mind that very wet and very hot and dry climates can cause the wood to damage rapidly and crack, warp and splinter. A man-made material, vinyl (also called PVC) does not rot, splinter, crack or warp. The synthetic plastics utilized to craft this kind of fencing are inexpensive, and unlike wood, Vinyl can be manufactured, thus making it so that its standard market price is controlled and not likely to suddenly become more expensive. Another benefit to vinyl is that it is often made to be extremely easy to install, consisting of lightweight pieces that can be simply snapped together. Vinyl does cost slightly more than wood, but in contrast, it is not so easily damageable and it is not demanding when it comes to maintenance. Manufacturers claim that the only maintenance issue that is likely to affect Vinyl over time is discoloration, but this can be easily resolved by simply repainting the fence. While those characteristics are ...continued on page 23
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Rental Housing Journal On-Site · February 2018
Rental Housing Journal On-Site
6 Types of Fencing ...continued from 22 certainly appealing, our experts point out that vinyl is not as strong as wood, and it can easily collapse due to harsh weather or impact. The plastics utilized are cold temperature-sensitive and can become brittle, which is why vinyl is not ideal for areas where cold and harsh weather is common. One last issue is that the manufacturing processes behind vinyl production are not very environmentally friendly. Aluminum ideal for decorative fencing for your rental property Aluminum is known for its malleability, which is indeed why it is widely utilized to craft decorative and elegant fencing. Also, it is lightweight and easy to clean. Aluminum fencing is generally similarly priced to vinyl, but it is important to keep in mind that this bargain could be offset by repair costs: Aluminum is delicate, and while they’re fairly easy to repair, our experts find that bends and dents are common. Aluminum is ideal for beautiful decorative fencing, but it is not the best option for privacy and safety as it is not made to provide significant shielding. Chain-Link fencing for your rental property Chain-link is a very simple and inexpensive kind of fencing, making it ideal for very large spaces or pens, especially for pets. Installing chain-link fencing is also simple and fast. Chain-link is not very sturdy and does not offer much privacy, which is why
it is not the best choice for residential properties where tenants and/or property managers are wanting a fence that offers protection and privacy. When it comes to maintenance, the thin links of the fence and their junctions are vulnerable to rusting and corrosion. Vinyl coating can extend the life of chain-link, but most people opt for a complete replacement when wear and tear becomes evident. Wrought iron is made to be durable while looking beautiful. It can be molded to create elegant styles, and the natural strength of the iron makes it a good option for a secure fence that won’t need much maintenance over the years. Wrought iron can develop a patina as it ages and oxidizes, which some find appealing and some do not: if desired, this can be addressed by having a professional restore the iron with appropriate treatments. While wrought iron makes it possible to save money on regular maintenance, in most cases it is the most expensive fencing option available. Installing heavy-duty iron fencing is also a workintensive project that should be left to a professional. Wrought iron can rust easily in regions where the weather climate is wet. Rust develops where the iron is most worn down, which makes it essential to fix scratches and chips as soon as one notices them. Brick and stone a serious investment
Having a fence built with cement and bricks or stones is going to be one of the much pricier options available for fencing. While those fences are unaffected by weather and most other common sources of tear and wear, they require quite a lengthy and work-intensive installation process, and they can’t be easily modified, making expansions or
alterations an issue. Our maintenance professionals point out that opting for brick and stone fencing is a lengthy commitment and a serious investment. •
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