rental
Housing EAST BAY RENTAL HOUSING ASSOCIATION
|
MARCH/APRIL 2021
|
$9.95
big ideas
Q&A WITH BUILD IT GREEN
invest in the future
Spend Smart
SERVING AL AMEDA AND CONTR A COSTA COUNTIES
COOL ADUs & ECO-SAVVY UPGRADES
breaking it down
TAX TIPS & RENT RECOVERY
LOCAL KNOWLEDGE, LOCAL ADVOCACY, LOCAL SUPPORT, WHEN YOU NEED IT. EAST BAY RENTAL HOUSING ASSOCIATION (EBRHA) is a nonprofit trade organization representing owners and managers of apartments, condominiums, duplexes, single-family homes and other types of rental housing. EBRHA members range in size from small investors with just one property to large property management companies that own or manage hundreds of units. Our membership consists of more than 1,500 rental housing owners, property managers, attorneys and other service contractors. Altogether, EBRHA represents over 30,000 rental units and serves over 25 cities throughout Alameda and Contra Costa counties.
INTRODUCING NEW EBRHA MEMBERSHIP LEVELS EBRHA is thrilled to present new membership levels tailored to your specific needs! • Starter: Tier 1 (0-3 Units, First-Time Buyer) • Intermediate Provider: Tier 2 (4-20 Units, 3 buildings)
MEMBERSHIP BENEFITS
• Property management advice by phone or in person • Renter screening service (application/report fees apply) • Annually updated legal forms, including forms online 24/7 • Monthly workshops on new laws, rental agreements, security deposits, legal notices, fair housing, rent control and more • Vendor directory of local businesses that offer exclusive member discounts • Annual Trade Expo and monthly networking mixers
• Advanced Provider: Tier 3 • Monthly educational membership meetings (21-50 Units, 10 Buildings) • Community outreach and education • Enteprise Pro: Tier 4 (51+ Units, 10+ Buildings)
More information on our expanded suite of member benefits and services coming soon! Questions? Contact sales@ebrha.com.
• Local and state lobbying • An active and growing Legal Action Fund and Political Action Committee • Subscription to Rental Housing and Units • Membership with the National Apartment Association and CalRHA
3664 GRAND AVENUE • SUITE B • OAKLAND, CA 94610
CONSIDERING RENEWING YOUR EBRHA MEMBERSHIP? ASK YOURSELF:
1. Has managing rental property expectations/ relationships been a challenge in recent months?
4. Are you worried about the protection of your property rights?
7. Are you unsure who’s defending your business interests?
2. Are there unit vacancies you need to fill right now?
5. Do you have at-risk renters who have been paying rent reliably this year?
8. Are you concerned about the health of your rental housing business in 2021?
3. Is it difficult to constantly navigate all the housing legislative changes?
6. Have any of your renters not paid rent OR are they paying reduced rent?
If you answered “YES” to any of the questions above, then EBRHA is a partner you can’t afford to be without. Membership provides these benefits: Helps you navigate complex housing laws to ü
ensure you’re on the right path.
Provides the latest forms and information for ü
legal compliance and risk mitigation.
DID YOU KNOW? EBRHA SERVES ALAMEDA AND CONTRA COSTA COUNTIES
Stays on top of relief resources and ü
programs to help your business remain viable.
Amplifies your voice and stories when it ü
matters the most.
Educates members and the community on ü
rental housing best practices.
Helps you keep long-term residents happy ü
and safe through uncertain times.
Bridges the gap between housing providers ü
and policy makers.
Advocates as a community for property ü
owner rights.
Offers on-call support and monthly events to ü
help you succeed, one step at a time.
EBRHA IS RIGHT BY YOUR SIDE. RENEW YOUR MEMBERSHIP ONLINE AT EBRHA.COM -> MEMBER PORTAL OR CONTACT MEMBERSHIP@EBRHA.COM
Contents MARCH/APRIL 2021
Features 22 MOVE-IN READY
Meet five Bay Area companies bringing cool prefab ADUs to backyards near you.
28 SEEING GREEN
When you’re ready to renovate, invest in upgrades that are friendly to the environment as well as to your wallet.
2 MARCH+APRIL 2021 / EBRHA.COM
COURTESY OF VEEV. ON THE COVER: PHOTO BY ADAM ROUSE, COURTESY OF ABODU
A rendering of Veev’s “smart” ADU. On the cover: An Abodu ADU
EAST BAY RENTAL HOUSING ASSOCIATION Volume XX Number 14 | March/April 2021 EBRHA OFFICE
3664 Grand Ave., Suite B, Oakland, CA 94610 TEL 510.893.9873 | FAX 510.893.2906 ebrha.com CHIEF EXECUTIVE OFFICER
Derek Barnes aemail@ebrha.com | 510.318.8305 OFFICE MANAGER/MEMBERSHIP COORDINATOR
Shani Brown shani@ebrha.com | 510.893.9873 ext. 103 PR AND COMMUNICATIONS SPECIALIST
Ash Sukumar communications@ebrha.com | 510.893.9873 ext. 104 SALES AND MARKETING MANAGER
Danielle Baxter sales@ebrha.com | 510.214.3632 MEMBER SPECIALIST
Helen Bowen reception@ebrha.com | 510.545.9942 EBRHA OFFICERS PRESIDENT Wayne C. Rowland FIRST VICE PRESIDENT Luke Blacklidge SECOND VICE PRESIDENT Irina Gelfenbeyn TREASURER Chris Moore SECRETARY Brent Kernan EBRHA BOARD OF DIRECTORS
Wayne C. Rowland, Luke Blacklidge, Chris Cohn, Irina Gelfenbeyn, Mahasty Lebastchi, Carmen Madden, Brent Kernan, Chris Moore, Fred Morse, Joshua Polston, Jack Schwartz, Aaron Young PUBLISHED BY
East Bay Rental Housing Association PUBLISHER
Derek Barnes ADVERTISING
Danielle Baxter sales@ebrha.com | 510.214.3632 CONSULTING EDITOR
Suzanne Ennis ART DIRECTOR
Bree Montanarello COPY EDITOR
Gillian Glover
STAY CONNECTED WITH EBRHA Call: 510.893.9873 Membership Questions: membership@ebrha.com Visit: ebrha.com Share Your Feedback: editor@ebrha.com Advertise: sales@ebrha.com Read: issuu.com/rentalhousing Learn: ebrha.com/faq Ask: ebrha.com/submit-your-questions Participate: web.ebrha.com/events GET SOCIAL Facebook: www.facebook.com/EastBayRentalHousingAssociation (@EastBayRentalHousingAssociation) Twitter: @EastBayRHA
Rental Housing (ISSN 1930-2002-Periodicals Postage Paid at Oakland, California. POSTMASTER: Send address changes to RENTAL HOUSING, 3664 Grand Ave., Suite B, Oakland, CA 94610. Rental Housing is published bimonthly for $9.95 per issue by the East Bay Rental Housing Association (EBRHA), 3664 Grand Ave., Suite B, Oakland, CA 94610. Rental Housing is not responsible for the return or loss of submissions or artwork. The magazine does not consider unsolicited articles. The opinions expressed in any signed article in Rental Housing are those of the author and do not necessarily reflect the viewpoint of EBRHA or Rental Housing. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal service or other expert assistance is required, the services of a competent person should be sought. Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by EBRHA, express or implied, of the advertiser or any goods or services offered. Published bimonthly, Rental Housing is distributed to the entire membership of EBRHA. The contents of this magazine may not be reproduced without permission. Publisher disclaims any liability for published articles. Printed by Bay Central Printing Company. Copyright ©2021 by EBRHA. All rights reserved. MARCH+APRIL 2021 / EBRHA.COM
3
Contents MARCH/APRIL 2021
The kitchen in an Oakland townhome staged by Furbish
Departments 8
CALENDAR EBRHA events and other happenings.
10 INFORM
Rental housing and real estate market news bites.
12 ADVOCATE
Highlights from the State Rental Assistance Program.
14 CONNECT
Meet Hannah Bruegmann of Build It Green, a nonprofit organization working to build healthy housing ecosystems.
16 EDUCATE
Understanding the basics of cost segregation. Plus, what not to say when marketing your property online.
Staging brings the “wow factor” to a modern townhome complex in Oakland.
33 SUPPLIER DIRECTORY 35 AD INDEX 36 LAST LOOK
4 MARCH+APRIL 2021 / EBRHA.COM
Wipe out your pet-waste woes.
©2021 OPEN HOMES PHOTOGRAPHY INC.
20 INSPIRE
Arcola
RENTAL HOUSING PROVIDERS FOR 10 YEARS “Each of our units was uniquely designed with comfort in mind for families. My grandparents wanted to help African Americans who were red-lined and refused credit back in the ’60s, people who had a hard time finding a decent place to live.”
Lin & Charles
RENTAL HOUSING PROVIDERS FOR 32 YEARS “Over the years we have crossed paths through our rentals with many interesting people from different places and backgrounds. We also connect with other residents of the neighborhood and feel that we are part of the community as well.”
Vuong & Truc
RENTAL HOUSING PROVIDERS FOR 30 YEARS “In 1992, we entered the real estate business and have since found much success combining our expertise to the projects at hand and providing residential services to our communities that we hold dear to our hearts.”
Karen
RENTAL HOUSING PROVIDER FOR 37 YEARS “I like the diversity in Oakland neighborhoods. It is wonderful and fulfilling to know that I have been able to offer a desirable place to call home for the many residents over the years who enjoy living together in a diverse community.”
Natalie
RENTAL HOUSING PROVIDER FOR 5 YEARS “I am concerned that taking away financial opportunities to invest in real estate and improve Oakland properties is going to lead to a deteriorating housing stock–which will benefit no one, especially not renters.” MARCH+APRIL 2021 / EBRHA.COM
5
Welcome A LETTER FROM THE CEO OF EBRHA
I Derek Barnes
n 2021, EBRHA will adopt a “Community Forward” central theme in supporting our members as many stabilize and rebuild their rental housing businesses in the wake of a turbulent 12 months. After a year of extraordinary and converging events, we clearly see our role in aligning pro-housing interests at the state level and across the two counties (Contra Costa and Alameda) we serve.
Throughout this issue, we’ll highlight areas of a vibrant Bay Area housing ecosystem that include innovative uses of materials and various stakeholders cooperating in a system to provide new forms of sustainable housing. This vital ecosystem has a profound new impact from an ecological and social perspective. Its purpose requires an inherent system or order of cooperation and interdependence that will drive positive outcomes with little waste and more shared benefit. No resource is overlooked, wasted, or exhausted—a harmonious elegance bringing together people in thriving environments and communities.
We’ll also look at ways for property owners/operators to be market-ready when building or renovating and focus on trends that will help members spend their dollars in the right places. For example, did you know that almost 70% of renters in a recent RENTCafé report were interested in living in energy-efficient residences made of recycled materials or that used green building practices? By investing a little more upfront using sustainable materials and cleaner building processes, you’ll save and receive more return on investment long-term while helping our environment. Today, property owners and managers are reimagining the blueprint for creating the next generation of resilient, regenerative and restorative housing communities—laying the groundwork for the new waves of innovation in the industry. Doing well and “doing good” are both important in building and maintaining residential communities as housing providers. To protect the livelihood of property owners/operators and increase the inventory of safe and reliably available housing, many stakeholders in the housing ecosystem must work together to solve problems created by bad policy—housing shortages, lack of affordability, lack of safety and inaccessibility. EBRHA is uniquely positioned and an essential catalyst to make this happen. We continue to peel back layers of the California Rental Assistance Program (SB 91) and expansion of the COVID-19 Tenant Relief Act (AB 3088) to help EBRHA members navigate this new frontier. Our collective pressure on policymakers is critical in mitigating the unintended outcomes of these pieces of legislation. Amplifying the voices and organizing the interests of small property owners, who provide an essential service, ensure legislators and policymakers clearly understand our constituents’ needs. With community leaders and legislators’ support, our small and larger rental housing providers have an incredible opportunity to join forces in maintaining a vibrant, cooperative housing ecosystem. The results of our “Community Forward” initiatives can help build a strong ground game of support, elevate a unified voice and presence, and advance shared initiatives to deliver pro-housing policies that are fair and equitable—rebuilding in the aftermath of COVID-19. There’s no better time to have a strong association like EBRHA fighting for you and in your corner.
Derek Barnes, CEO of EBRHA 6 MARCH+APRIL 2021 / EBRHA.COM
EVENT
DATE & TIME
Local & State Eviction Moratorium (Property Owner Focused)
Wed. February 17 5:30 - 7:00 pm
Fair Chance Ordinance
Wed. February 24 12:30 - 2:00 pm
Small Property Owner Workshop
Wed. March 15 5:30 - 7:00 pm
Security Deposits
Wed. May 12 5:30 - 7:00 pm
Small Property Owner Workshop
Wed. July 14 5:30 - 7:00 pm
Owner and Tenant Workshop Rent Control and Evictions in Oakland (Cantonese and Mandarin)
Wed. August 14 12:30 - 2:00 pm
To register, please visit https://tinyurl.com/2021rapworkshops
MARCH+APRIL 2021 / EBRHA.COM
7
MARCH 1 2-3:30 PM Federal Rental Aide Cafe Presented by Attorney Mandana Arjmand
*
MARCH 5 1-3 PM Regional Fair Housing Training Presented by ECHO Housing echofairhousing.org/ events-calendar.html
*
MARCH 8 ADVOCATE 2021 Virtual Conference naahq.org/2021-advocate
8 MARCH+APRIL 2021 / EBRHA.COM
MARCH 9 2-3:30 PM Small Property Owner Roundtable with EBRHA Board President Wayne Rowland
*
MARCH 15 State Rental Assistance Program begins accepting applications no later than this date. Check for updates at bcsh.ca.gov/covidrelief
*
MARCH 17-18 REfresh: The First -Ever Yardi Breeze User Conference yardibreeze.com/refresh/
MARCH 19 10 AM-NOON Member Meeting: Capital Investments and 1031 Exchanges Presented by Terry Allen, CFP & Susan Burns, Exchange Officer JLM Corporation MARCH 23 2-3:30 PM ADU Conversion Presented by Steve Edrington & Associates MARCH 25 2-3:30 PM Rental Property Management 101 Presented by EBRHA Board Member Aaron Young
*
NON-EBRHA EVENTS
*
MARCH 26 4-6 PM Rights & Responsibilities for Landlords & Tenants During the COVID-19 Pandemic (Spanish-only webinar) Presented by the Richmond Rent Program ci.richmond.ca.us/3541/ workshops
*
MARCH 31 Cesar Chavez Day APRIL 1 2-3:30 PM Estate planning for property owners Presented by Brad Barth
SURFACE / UNSPLASH. OPPOSITE: KELLY SIKKEMA / UNSPLASH
03 04 Calendar
APRIL 5 2-3:30 PM Compliance and Renovation Presented by SGDM, LLC APRIL 13 2-3:30 PM Small Property Owner Roundable with Wayne Rowland
*
APRIL 15 Tax Day APRIL 16 10 AM-NOON Member Meeting— Rent Board Panel Presented by Oakland RAP, Richmond Rent Program, City of Alameda, ECHO Housing APRIL 22 2-3:30 PM Rental Property Management 102 Presented by Carmen Madden
* *
APRIL 22 Earth Day APRIL 23 4-6 PM Navigating the Eviction Process in Richmond ci.richmond.ca.us/3541/ workshops APRIL 29 2-3:30 PM Rental Housing Forum with Dan Lieberman Visit web.ebrha.com/events for calendar updates and to register for all EBRHA events.
TO PITCH AN EVENT FOR OUR CALENDAR, EMAIL US AT EDITOR@EBRHA.COM MARCH+APRIL 2021 / EBRHA.COM
9
Inform
RENTAL HOUSING ORGANIZATIONS OFFER PANDEMIC SUPPORT The Institute of Real Estate Management (IREM), National Apartment Association (NAA), National Multifamily Housing Council (NMHC) and National Association of Residential Property Managers (NARPM) recently joined forces to launch the COVID-19 Rental Housing Support Initiative, described as “a series of solutions in key support areas to help our industry survive and thrive through the pandemic and beyond.” The project, for which Yardi is a primary sponsor, includes mental health resources and fact-based information on renting, legislative support for the industry, liability information and other tools. Find materials online at covidinitiative.rentalhousingindustry.org. ALN REPORT SHEDS LIGHT ON MARKET TRENDS The recently released Q4 2020 ALN Apartment Data Quarterly Metropolitan Statistical Area (MSA) Report for San Francisco-Oakland-Hayward offers fascinating insights into local population and housing trends. 10 MARCH+APRIL 2021 / EBRHA.COM
A few highlights: •
In the MSA, median household income rose from just over $96,000 per year in 2016 to just over $114,000 per year in 2019. •
The annual change in effective rent (i.e., the monthly rate residents are charged for a 12-month lease, accounting for the available concession package) year over year in the MSA was $2,625 (-7.4%), the largest decrease out of 20 MSAs with similar populations.
•
Average effective rents were down in all floor plan types, with the average effective rent for all units at $2,625 for the fourth quarter of 2020. •
35.6% of all units were offering rent concessions; the average was 5.8 weeks free for a one-year lease. •
Class A units had an end occupancy rate of 74.9%, down 15.1%. Class D properties had the least occupancy change with a decrease of 0.3%.
TIM DOUGLAS / PEXELS. OPPOSITE, FROM LEFT: YOANN SILOINE / UNSPLASH; YOMEX OWO / UNSPLASH
INDUSTRY NEWS & MARKET TRENDS
CONCORD RAMPS UP ACCESSIBILITY Concord City Council recently awarded a construction contract for a project that will add 26 ADA curb ramps (also known as handicap ramps) in locations around Concord where there currently are no ramps. The city will add minimal traffic striping and paving improvements too. Construction is anticipated to be completed in March. The project is is part of a commitment from the City of Concord to remove accessibility barriers within city right-of-way areas. See the city’s website, cityofconcord.org, for updates. EDEN AREA BUSINESSES GET FACE-LIFTS The Eden Upgrade Façade Improvement Program is accepting applications from unincorporated Alameda County businesses looking to upgrade their curb appeal. Up to $25,000 (with no cash match) or $80,000 with a 50% cash match is available for exterior building improvements such as signage, window and door systems, paint, lighting, landscaping and awnings. Funds are available to qualified renters and property owners with current Alameda County business licenses. Visit edenupgrade.org for more information. PITTSBURG OFFERS FINANCIAL ASSISTANCE The City of Pittsburg in partnership with SHELTER, Inc. has funds for rental, mortgage and utility assistance for Pittsburg residents impacted by COVID-19. Applicants must be from an eligible, low-income household. Household’s inability to pay rent, mortgage or utilities must be due to COVID-19. Please note that funding is limited. To apply online, visit shelterinc.org/renthelp. For more information, call SHELTER, Inc.’s hotline at 925.349.0571.
ALAMEDA COUNTY GETS THE LEAD OUT Lead-paint-repair grants for owners of pre-1978 residential properties are available in Alameda County. Approved applicants are provided with free lead testing, grant funding of up to $10,000 per unit for lead hazard repairs, and more. Check the county’s website for more details. achhd.org/programs/leadfunding.htm
ZILLOW CHARGES RENTAL LISTING FEES
Many rental housing providers rely on Zillow as a platform to list vacant units. However, those services are no longer free. As of January, Zillow has stopped automatically syndicating rental properties from local MLS feeds. Property managers using third-party feed services who wish to have their listings posted on Zillow Rentals network (Zillow, Trulia and HotPads) must establish a Zillow Feed Connect agreement and pay $1-$3 per day per listing, depending on the market and the number of listings. Zillow’s service for owners of 1-5 rental properties, Rental Manager, changed its pricing policy last year. The first listing is free, but subsequent active listings cost $9.99/week and renew automatically. Read about Zillow’s rental advertising and listing costs, as well as the benefits, at zillow.com/z/partners/advertise. MARCH+APRIL 2021 / EBRHA.COM
11
Advocate L E G I S L AT I O N & P O L I C Y U P DAT E S
1. For Alameda County, there is a prohibition on serving any notice to quit/ vacate for nonpayment of rent until 60 days after Alameda County’s “local emergency” ends. It is likely that this prohibition supersedes application of SB 91’s 15-day notice to pay rent or surrender possession for unlawful detainers, although no determination of this conflict between local and state law has yet been ruled on by a California appellate court. Thus, if your rental property is in Alameda County, it is strongly recommended that you consult an attorney before serving any notice that includes, either express or implied, an alternative demand that the tenant vacate the unit. (See Chapter 6.120.030 Alameda County Municipal Code.)
A Rental Assistance and Eviction Moratorium Update by Brent Kernan On Jan. 29, 2021, Governor Gavin Newsom signed SB 91, extending California’s eviction moratorium from Feb. 1 until June 30, 2021, and allocating federal rent relief funds to 12 MARCH+APRIL 2021 / EBRHA.COM
struggling renters and rental property owners. Through this rental assistance program, rental property owners now have a path to recover unpaid rental debt. Watch the COVID-19 Information, Renter Resources and Property Owner Resources pages on the EBRHA website (under the Resources tab on ebrha.com) for the latest information about this rapidly evolving topic, including how to apply for funding. In the meantime, here are 14 things that property owners should know:
3. SB 91 still allows “just cause” evictions to proceed. Examples of “just cause” include a breach of a material term of a lease, causing a nuisance, criminal activity, subletting in violation of a lease and other grounds. However, it also continues to apply to all rental units, withholding certain exemptions such as for single-family houses. (CCP 1170.03.5, Civ 1946.2)
JEFFREY CZUM / PEXELS
THE 411 ON SB 91:
2. Renters who pay 25% of their monthly rent from Sept. 1, 2020, to June 30, 2021, and have completed a Declaration of COVID-19 Related Financial Distress form (which owners were required to provide to qualifying renters in February) are protected from eviction. Note, renters don’t have to pay 25% each month; they have the option to make a 25% lumpsum payment by June 30, 2021. The renter will still owe the property owner all unpaid rent. (CCP 1179.03)
4. SB 91 still allows certain “nofault” evictions. A no-fault eviction includes: withdrawal of the property from the rental market; intent to occupy by the owner, spouse, parent, grandparent, child or grandchild; and to comply with a local ordinance, court order or other government entity resulting in the need to vacate the property. (CCP 1179.03.5, Civ. 1946.2) 5. SB 91 also extends the expiration date of prohibitions on retaliation because of COVID-19 rental debt from Feb. 1, 2021, to July 1, 2021. (SB 91 A(4)) 6. SB 91 PROHIBITS: a) charging late fees, if the resident completes the Declaration of COVID-19 Related Financial Distress b) using the security deposit to cover COVID-19 rental debt c) applying a rent payment retroactively to back rent without written consent of the resident d) using unpaid COVID-19 rental debt as a negative factor when screening a prospective resident e) the sale or assignment of COVID-19 rental debt f ) increasing fees to a renter or charging fees for services that were previously free 7. Federal rental assistance funds are to be paid to property owners directly.
8. Online application for rent assistance is expected to begin March 15, 2021. Both property owners and eligible households may apply for assistance. 9. The program gives first priority to those with a household income of less than 50% of AMI (area median income), second to communities disproportionately impacted by COVID-19 and third to those with a household income of less than 80% of AMI. 10. The program will pay property owners up to 80% of the rent in arrears (not total rent for the period) between April 2020 and March 2021 if the property owner agrees to forgive the remaining 20% and not pursue eviction for nonpayment or any other curable breach of the lease. 11. If they will not forgive unpaid amounts and forgo eviction, they will be paid 25% of rent in arrears between April 2020 and March 2021. 12. Subject to funding availability, qualified tenants will also be able to access funds to pay 25% of rent for April-June 2021. 13. Property owners’ access to small claims court for COVID-19 rental debt begins Aug. 1, 2021. If the owner is deemed to have refused to obtain rental assistance, the award may be reduced.
Brent Kernan is a real estate property lawyer representing rental property owners and managers in the Bay Area. He has practiced this area of law for over 20 years. He is also an EBRHA board member and a rental property owner himself. a pool, gym or laundry facility, in response to a government or public health agency order or guidelines. Sources: CalRHA Policy Update, Feb. 2021 and The State of California Business, Consumer Services and Housing Agency (BCSHA) COVID-19 Renter Relief Act overview (bcsh.ca.gov/covidrelief/). CalRHA advocated before the governor’s office, BCSHA and with key legislators for the shortest extension possible and for the eviction moratorium extension be tied to the establishment of a rent assistance program. This article is intended for general information purposes only and does not constitute legal advice. Consult an attorney prior to acting on information provided.
14. SB 91 also establishes a “Safe Harbor” for those housing providers that closed an amenity, such as MARCH+APRIL 2021 / EBRHA.COM
13
Connect COMMUNITY RESOURCES & OUTREACH
BIG IDEAS Hannah Bruegmann, Program Director of New Initiatives for Build It Green, shares what the organization does, how it does it and how rental housing providers can join in its mission to revitalize individuals, communities and bioregions.
14 MARCH+APRIL 2021 / EBRHA.COM
What is regenerative development? Regenerative development can be thought of as an approach that considers not only how to make the built ecosystem more sustainable, but also considers how we might use projects to improve the capacity of what are termed “whole” systems that nest in one another. We are thinking about building positive feedback loops where the capacity (skills, abilities, knowledge) of individuals in a community, the community as a whole (to create more opportunities and improvements), and the local environment (often termed “bioregion” for this purpose) can self-generate over time. This might look like a project that includes training local homeowners in how to maintain and improve their own properties, then leads to a group of them coming togeth-
DAVID BEACH. OPPOSITE: BUILDINGANADU.COM
What are Build It Green’s top priorities, and how have they evolved since the organization was founded in the early 2000s? Build It Green was founded to bring green practices into the mainstream residential building ecosystem through credible and accessible resources and training programs such as our GreenPoint Rated certification program. Our priorities still include encouraging more sustainable residential building practices. In addition to that foundation, we’ve realized that truly tackling the housing and climate crises will require focusing on not just individual homes, but also the larger neighborhood and community, including the local bioregion. To do that, we’re exploring how to bring a regenerative thinking approach to communities and the residential building sector. We’re starting by encouraging ADUs and the emerging ecosystem supporting them.
A stylish ADU interior
er to create new projects that benefit the community and the place where they live in a totally new and previously unimagined way. This could then continue to thrive and grow, even if a few key community members leave. You launched a pilot program in 2020 to dig into those ideas and how ADUs fit in. What was your approach, and what have you learned? Our original intent was to create an exploratory and educational program to map the actors and activities in the ADU space, and determine where the gaps might be that we can help fill, through building a network of diverse stakeholders. It was also to provide an entry-point to learning and understanding regenerative development ourselves. We’ve learned there is lots of opportunity and potential in the ADU space, and it’s creating an emerging, specialized market of builders, companies and service providers, but there [is] also still a lot of progress to be made. While there are state level mandates, local jurisdictions are responsible for implementing and enforcing the rules, which can be inconsistent. We’re working with the Casita Coalition, among others, to help gather best practices for jurisdictions to create good ADU policy. We’re also working to gather best practices for builders, as the small spaces of ADUs pose some unique challenges— and opportunities! How can rental housing providers in Alameda and Contra Costa counties be part of the solution to many of the challenges facing the East Bay housing ecosystem, while at the same time protecting their economic interests? ADUs offer an incredible opportunity
“...we’ve realized that truly tackling the housing and climate crises will require focusing on not just individual homes, but also the larger neighborhood and community, including the local bioregion.” for single- and multifamily homeowners to be part of the housing solution. .... There is hope that the kinds of infill development ADUs offer will allow for more rental units where we need them—in thriving neighborhoods near transit and other existing services. UCLA’s Center for Regional Policy Studies estimated there’s market potential for up to 1.5 million new homes in California over the next five years through the construction of ADUs and JADUs. There’s a lot more to learn, but the potential is huge. ... There are also educational resources to help homeowners be better informed about both the build process and becoming first-time [rental housing providers]. Both the County of San Mateo’s Second Unit Center and the Napa Sonoma ADU Center’s websites offer a calculator and other tools to plan for an ADU, and the California Department of Housing and Community Development (HCD) has a tenant/ landlord responsibilities resource to help learn best practices and regulations protecting both [renters and owners]. There are no East Bay-specific calculators yet, but lots of new resources are coming down the road. Why is it valuable to bring diverse stakeholders together for conversations around these issues? It is incredibly important to bring together diverse perspectives because, as we learn in regenerative development, everything is interconnected
when you take a living systems approach. Like the organs in our body—if, say, a lung stops performing optimally, it affects the performance of the whole body. The same goes for when something in the built environment, for example, is not aligned or as developed as the rest of the system. For ADUs, we have builders and building materials, but if there aren’t financing products readily available or the policy requirements aren’t easily understood, it’s going to slow down housing production. Diverse stakeholders help us recognize what is needed, what’s working and what’s not working in the system, and we can work together to realize a more beneficial and productive outcome for everyone. Most people want to leave this world better than how they find it, and want to make a positive difference. We each have a role to play within the residential built environment to fully realize that vision. Build It Green’s goal to increase the well-being of occupants, communities and bioregions is a unifying concept that many can get behind. We hope you join us! Visit builditgreen.org to learn more about Build It Green’s new initiatives as well as resources and programs useful to housing providers, such as its GreenPoint Rated checklist, Certified Professional Directory and webinars. Also, don’t miss our stories about green upgrades and prefab ADUs, beginning on p. 22 . MARCH+APRIL 2021 / EBRHA.COM
15
Educate T I P S & H OW -TOS
16 MARCH+APRIL 2021 / EBRHA.COM
What Not To Say When Marketing Your Properties Online by Yardi Breeze Are your rental listings attracting prospects? When you’re marketing your properties online, there are certain messages you want to avoid. There are also specific words that you might think will attract renters but can leave a negative impression on readers. But we’re not going to simply tell you what not to do. We’ll round out the article with some tips on what you should say when marketing your properties online. Messages to avoid in your online rental listing
OPPOSITE: RODNAE PRODUCTIONS/ PEXELS; NATALIA VAITKEVICH / PEXELS
DON’T ASSUME WHAT THE READER LIKES OR DISLIKES “Our properties offer great throwback designs to a simpler time.” Maybe your prospects and residents aren’t into old-fashioned décor. In other words, you’re accidentally telling them to move along and look for something else. Instead, ask each prospect what they’re looking for, then highlight their interests throughout your communications, property tours, etc. AVOID PUTTING DOWN YOUR COMPETITION “We’re much more affordable than several other properties across the street.” This is almost like giving free advertising to your competition. Wouldn’t you want to see if those higher-priced units come with bonus amenities that make the extra cost worth your while? It’s also a bad look to be negative. Stick to marketing your own property and show everyone why they should rent with you. If you just renovated several vacant units while your competition lags behind, focus on how
great your improvements are. Don’t even mention the folks “down the street.” NEVER MAKE EXCUSES “We haven’t had time to redo the carpeting, but that’s why this unit is such a great deal!” If any aspect of your property isn’t up to snuff, make it a priority to renovate and improve those items. If you have photos that show old or ragged carpeting, for instance, explain that you have plans to change the carpeting before anyone moves in. ONLY SAY YOU’LL DO SOMETHING OR PROVIDE A SERVICE YOU KNOW YOU CAN DO “Have friends who want to live here? Let’s get together to work it out.” It’s never a good idea to try to sell someone on a feature or idea you can’t provide as a certainty. If we go with this example, you have no way of knowing that all three prospective renters will pass a credit and criminal background check. This is a perfect of example of what not to say when marketing properties online. Pro tip: It’s always a good idea to ask for references. Just don’t make promises you can’t keep. DO NOT MAKE ULTIMATUMS “It might be a noisy neighborhood, but that’s the price you pay for such a great location.” Never ask anyone to make a sacrifice. You might as well be challenging your prospect to keep looking until they find their dream home. On the other hand, if the prospect has a concern, acknowledge what they’re saying, then contrast it with positive features of the property that offset the negative.
Other words to avoid in online property marketing “COZY” It’s well-established at this point that this word sounds like a substitute for “small” or “cramped.” “CHARMING” Like cozy, this word sounds like you’re covering something up. Are you putting a positive spin on a tiny, unrenovated kitchen? That’s not charming. It’s undesirable. “CLEAN” This should be a given. How dirty was it before? “UNIQUE” Do you mean no closets? Angled walls? “VINTAGE” Old. If you are referencing a particular style—like midcentury modern—say so! “MOTIVATED” Why? Some people are just casually browsing rentals. However, you might be able to motivate them with the perfect strategy, which includes knowing what not to say in your online property marketing. Smart & impactful words to use in online property marketing “YOU” Use “you” as your pronoun in any descriptive sentences to give the reader a sense of ownership already. Write like you are talking to a person who will probably move in. “You will see breathtaking mountain views from your kitchen.” “You can get to the freeway in just five minutes.” MARCH+APRIL 2021 / EBRHA.COM
17
“UPDATED/NEW” If you’ve done anything to update your vacant space—whether it’s residential or commercial—let readers know right away. Updates tell potential renters that you’re the kind of property owner who takes care of their properties. It also puts them at ease to know there’s at least one thing they don’t have to worry about fixing anytime soon. “LANDSCAPED/LANDSCAPING” Be sure to describe the grounds as well as the building, especially if you live in an area with nice weather. Landscaping and other curb appeal factors add value to rentals too. “READY” Let renters know your space is ready to go, and there will be no wait or hassle moving in.
“PETS” Whether you allow pets or not, being upfront about your policy will make sure you attract the right applicants without wasting anyone’s time. Remember, you need to know the difference between pets and emotional support animals. “CALL NOW/APPLY TODAY” Like any ad, you should include a clear call to action that will help convert prospects into leads. Tell them what the next step is. If you use Yardi Breeze and market your residential properties on rentcafe.com (for free), interested renters can apply online right then and there. Adapted from “What Not To Say When Marketing Your Property Online,” published Jan. 21, 2021, on yardibreeze.com
18 MARCH+APRIL 2021 / EBRHA.COM
HOME OFFICE DEDUCTION RULES If you’ve commandeered a spare bedroom or ADU to work from home throughout the pandemic, you might be considering applying for a home office deduction. However, according to the Internal Revenue Service, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 through 2025 for employees. That means employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home. Per IRS rules, the home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. There are two basic requirements to qualify for the deduction: First, the home must be the taxpayer’s principal place of business. Second, a taxpayer must use part of their home for one of the following: • Exclusively and regularly as a principal place of business for a trade or business • Exclusively and regularly as a place where patients, clients or customers are met in the normal course of a trade or business • As a separate, freestanding structure that is used exclusively and regularly in connection with a trade or business • On a regular basis for storage of inventory or product samples used in a trade or business of selling products at retail or wholesale • For rental use • As a day-care facility Read more about home office deduction rules in the IRS’s article, “IRS reminds taxpayers of the home office deduction rules during Small Business Week,” published Sept. 23, 2020, here: irs.gov/newsroom/irs-reminds-taxpayers-ofthe-home-office-deduction-rules-during-small-business-week
KEN-TOMITA/ PEXELS
“TILE/GRANITE/WOOD/STAINLESS” If your vacancy has any of these finishes, be sure to call them out in your online listing.
An Introduction to Cost Segregation Learn how this tax strategy can help real estate investors reduce taxable income. by Chris Moore
What is cost segregation? Cost segregation (aka cost seg) is a term used by tax accountants to describe a process whereby rental property owners can segregate interior and exterior components of their property and depreciate them over shorter time periods (five, seven and 15 years) versus the standard 27.5 years for residential buildings. This depreciation can be used to offset property income for tax purposes. How does it work? Typically, an owner would hire a cost seg specialist from a CPA firm to perform a study of the building and to prepare an analysis and report on which portions of the property can be depreciated over shorter time periods. This accelerated depreciation can then be used to offset property income. Any extra depreciation in the first year of the cost seg study would carry forward to future years. What are the benefits? The main benefit is to increase the amount of depreciation you can take today to offset rental income. Bringing forward (accelerating) depreciation would reduce the amount available in future years.
Normal 27.5-year depreciation example: Tom depreciates the building portion over the standard 27.5 years, which equals $29,000 (rounded) per year. Tom can offset his $40,000 income with the depreciation and would only be taxed on $11,000 of the income. Cost seg depreciation example: The cost seg study allows Tom to reclassify certain components (e.g., lamps, cabinets) with five-, seven- or 15-year life spans. Therefore, Tom could take full depreciation now for all the five- and seven-year items and two-thirds of the 15-year items. In this case, Tom’s depreciation this year is $100,000, and he offsets all $40,000 in income for tax purposes. None is taxed. Tom can carry forward the remaining $60,000 in depreciation to offset income in the following year. In future years, depreciation can still be taken on the building portion that’s depreciated over 27.5 years. Additionally, there are greater tax benefits as a result of the Tax Cuts and Jobs Act and the 2020 CARES Act. The Tax Cuts and Jobs Act enables double bonus depreciation for five-, seven- and 15-year property placed in service after Sept. 27, 2017. This means that Tom could deduct 100% of this category of depreciation in the year
the cost seg study is performed. Thus, the $100,000 in depreciation could be much larger. The 2020 CARES Act allows an owner to go back five years and use depreciation to offset income. Since Tom had $60,000 in extra depreciation, he could carry that $60,000 back to offset any income from 2015-2019. Who should consider it? The cost of performing a cost seg study could be $3,000-$5,000 or more per property. There are also additional tax preparation costs. Typically, multifamily properties purchased over the last 5-10 years still have a large amount of depreciation available that an owner could use to offset taxable income in an amount that significantly exceeds the cost of the cost seg study. Talk to your CPA to assess if cost seg is right for your situation. Chris Moore is a local real estate investor and manager with a focus on providing housing in rent-controlled communities such as Oakland, California. Chris began his career as a California CPA, and then was a product and sales executive for global telecommunications companies prior to his focus on residential real estate in 2012. Chris is currently a board member of EBRHA.
Comparison examples: Tom purchased a property 10 years ago for $1,000,000, with a land value of $200,000 and building value of $800,000. Annual income on the property is $40,000. MARCH+APRIL 2021 / EBRHA.COM
19
Inspire DESIGN TRENDS
Dressed to Impress Furbish brings the “wow” factor—and prospective renters—to a new complex of luxury townhomes.
20 MARCH+APRIL 2021 / EBRHA.COM
ALL PHOTOS ©2021 OPEN HOMES PHOTOGRAPHY INC.
Do you want your vacant rental property to stand out in a sea of competitors? If so, consider having it professionally staged and photographed. According to a 2020 Real Estate Staging Association survey, staged for-sale homes spent an average of 23 fewer days on the market, and 85% sold for 5%-23% over listing price. Anecdotally, those trends are similar among staged rental properties. Think about it: If you were looking for an apartment online (where most prospective renters start these days), would you be more likely to click on a shot of an empty room or one that looks like it was pulled from the pages of Dwell? Furbish is a pro at getting properties camera-ready. Founded in 2012 by real estate developer Kathy Kuhner, the Bay Area-based company has staged more than 700 properties and grown to a full-time team of nine employees. Recently, Furbish designers Samantha Emily Weinberg and Danielle Schappell staged two rental units in the newly built West Oak Modern luxury townhome complex in Oakland (westoakmodern.com), including this two-bedroom artfully shot by Open Homes Photography Inc. Weinberg shares their process: “With staging, it’s important to think about the person/s who will be moving in. Is it a family-oriented neighborhood or a hip urban space? This always helps us determine how to style the space, and build a narrative with the objects and art I’m selecting,” she explains. For this unit, she says, “we wanted to create a space that felt luxurious and drew inspiration from our favorite travels. The first bedroom we styled a bit more bohemian with a framed print of Joshua Tree and a collection of butterflies over the bed. The second bedroom was more about the texture of the space and how everything played together with the Hockney-inspired painting [hidden from view here]. While each room has a different inspiration, they are very similar, and you can almost imagine the two friends or the new couple who are interested in moving in had styled the space themselves.” Of course, good staging does much more than catch the eye. “Empty homes appear smaller than furnished homes— obviously we want each property to feel as large as possible! Most people can’t walk into a room and immediately visualize how their furniture will fit, so staging gives them a frame of reference,” Weinberg explains. “It can also draw attention away from any undesirable features like awkward layouts or small rooms, and show renters how to utilize these spaces.” Conversely, in this living room, the staging strategically draws attention to appealing design elements, including a bold tiled wall and 10-foot ceilings. This kind of expertise doesn’t come cheap. Furbish’s general manager, Melanie Leinweber, quotes prices starting at $3,000 for a one-bedroom apartment/condo and $5,000 and up for three-bedroom homes, depending on the square footage and type of property. Property owners/managers have to take many factors into consideration when determining whether that investment will pay off, including how
FURBISH’S HIGH-IMPACT, LOW-COST DIY STAGING TIPS.
We can’t stress enough the importance of plants! They really create [a feeling] that the unit can be home. (Check out Target’s faux options.) Plants not your thing? Make the space cozy with a throw blanket or some trinkets you collected on vacation last year. Just be sure not to present personal photos. You want the space to feel like their home, not yours. 510.918.8243, furbishgroup@gmail.com, furbishgroup.com competitive the local market is and whether the staging will help them rent out just one unit or many. For West Oak Modern, the impact was almost immediate. Two units were rented within the first three weeks, which is quick in this environment, according to the general partner behind the project. Three weeks later there were still vacancies, but “the staging certainly helped us bring in people to view the units and begin renting,” he confirmed. Considering how inviting Furbish made these spaces look, we’re betting the remaining units won’t stay empty long.
MARCH+APRIL 2021 / EBRHA.COM
21
move-in
READY Meet five Bay Area companies bringing cool prefab ADUs to backyards near you.
22 MARCH+APRIL 2021 / EBRHA.COM
OPPOSITE: ALL PHOTOS BY ADAM ROUSE, COURTESY OF ABODU
A
ccessory dwelling units (ADUs, aka backyard homes or granny flats) are all the buzz these days, and for good reason. ADUs can provide a source of rental income, increase property value, enable extended families to be near one another and expand affordable, accessible housing to people of all ages. Moreover, because they’re a relatively inexpensive housing option that requires no additional land or new major infrastructure, they’re frequently touted as a way to address California’s shortage of affordable housing. (For more on that topic, see our interview with Build It Green on p. 14.) Consequently, state and local agencies are making it increasingly easy to add an ADU—even two—to your property. If you’re considering taking the plunge but have neither the time, budget nor desire to invest in a custom, stick-built structure, prefabricated may be the way to go. We’ve rounded up five local companies that aim to deliver well-built, competitively priced, attractive prefab ADUs quickly and seamlessly. Find out who they are, what they offer and, in their own words, why they think they deserve your business.
ABODU WHO Abodu, founded in 2018 and based in Redwood City. WHERE Available throughout the Bay Area. HOW MANY Three models (studio, one- and two-bedroom) with multiple internal and external upgrade options, including furniture and solar panels. HOW MUCH Starting at $189,000 for the 340 sq. ft. Abodu Studio, which includes a site evaluation; a permitting consultation with an on-site contractor; the completed Abodu (including finishes and appliances); delivery from the Abodu factory to your site, including craning; and anticipated required site work from your contractor (Abodu can connect you with qualified, licensed contractors for this portion). WHY “We worked with world-class architects to develop designs that were built to be lived in and could be constructed to the highest quality. We build our ADUs using the highest standards of prefab construction, which allows us to complete projects fast and on a known budget. And we worked with local cities to remove the red tape from the process so that we could ultimately deliver projects in 12 weeks or less. All the while providing our ‘Abodu Concierge Service’ to homeowners who never have to wonder what they’re going to get.”—John Geary, co-founder (with Eric McInerney) and CEO at Abodu (source: abodu.com/blog) CONTACT 650.398.0158, abodu.com. A Redwood City showroom is available by appointment only. MARCH+APRIL 2021 / EBRHA.COM
23
ADORE HOMES WHO ADORE Homes, founded in 2019 and based in San Jose, with factories across the West Coast. WHERE Serves all Bay Area counties. Four units are in the permitting process, two of them in Oakland. HOW MANY More than 40 models, plus nearly limitless customization. HOW MUCH $174,000 for a 438 sq. ft. unit to $279,000 for a 1,200 sq. ft. unit, “all-in.” WHY “First of all, it’s the level of service and speed of delivery coupled with the customization possibilities. Then, it’s the number of homes to choose from. We have more than 40. And Tom and I truly believe that what we are doing is all about service. ... [Plus,] from a unit standpoint, our pricing is very competitive, and our models include many upgraded features as the standard.” —Ken Balteriski, co-founder, ADORE Homes “What we bring to the table and to the marketplace is certainty and transparency. We do our thorough diligence at the outset, not at the backend of the project. That’s how our price will never change once agreed with the client.” —Tom Ginsberg, co-founder, ADORE Homes. CONTACT 650.395.9882, adore-homes.com. In Sunnyvale, the company’s solar-powered outdoor living showroom/ “ADORE Homes outdoor village,” featuring four model ADU units and other backyard home features, is set to open during March. 24 MARCH+APRIL 2021 / EBRHA.COM
ALL COURTESY OF ADORE HOMES. OPPOSITE: ALL COURTESY OF HABITAT ADU. NEXT SPREAD, FROM LEFT: COURTESY OF SONDERPODS; ALL COURTESY OF VEEV
TIP 1: The meaning of “all-in” varies from company to company. Make sure you’re comparing apples to apples when you assess your options.
TIP 2: A feasibility study can help you determine what kind of ADU is best for your property and understand your potential return on investment.
ASK THE EXPERT Erik Preston, Habitat ADU 1. What factors should property owners take into consideration when deciding whether to buy an ADU for rental purposes?
• Whether there will be any surprises up front onsite/ design premiums; • Your financing and how much leverage you can get in your situation; • How your renter will access the unit, and how you will navigate sharing your backyard; • Whether it would be more cost-effective to measure utilities separately or to get a new service; • Your city’s rent control laws and how they pertain to new ADU construction; • Whether you plan to resell your property immediately. ADU valuations are volatile until the market has seasoned. Buy, hold, lease.
2. What are the advantages of installing a prefab ADU versus a Junior ADU (JADU) or conversion ADU for rental purposes? JADUs [which are within the primary dwelling and can share a shower/bathroom] are not really in play for rental property owners, actually. Owner occupancy of the primary residence is required in order to be able to rent out a JADU, so that won’t scale at all. Compared to a conversion ADU, with prefab, you get much lower relative costs for detached structures. Depending on your property, you also get more privacy and separation, half the build time and a quarter of the construction noise and inconvenience.
HABITAT ADU WHO Habitat ADU, founded in 2019 and based in San Francisco and Burbank. In partnership with a major national manufacturer, Habitat ADU’s proprietary designs are built in several factories in California. WHERE All of the greater Bay Area, plus projects in Sacramento, L.A. and Orange counties. Habitat ADU has additional projects in Santa Barbara and San Diego, though it’s not formally “live” there. HOW MANY Nine design models, with nine more coming out soon. Its 750 sq. ft., two-bedroom model is its most popular. HOW MUCH $179,000-$269,000 “all-in,” which includes permits, units, site work, foundations, utilities, finishes and fixtures, warranty, etc. “We offer a max price guarantee, which is unheard of, so that customers can get a refund after permits if the true price came in higher than our proposal.” WHY “We will not lose on price for a high-quality, comparably sized unit, period. We also offer a super convenient and streamlined turnkey service, meaning we are actually the GC of record on our projects, not handing it off to a third party contractor with no accountability. We also build to HUD Code for cost efficiencies and permitting streamlining.” —Erik Preston, Head of Business Development, Habitat ADU CONTACT 415.968.1625, habitatadu.com MARCH+APRIL 2021 / EBRHA.COM
25
ADU LEGISLATIVE UPDATES
by EBRHA Board Member Joshua Polston
SONDERPODS WHO SonderPods, founded in May 2018 (formal operations began in March 2020), with a factory in Riverside, California. WHERE Serves all of California. In the East Bay, a unit has been installed in Pleasanton, and one is in the permit process for a project in Alamo. HOW MANY Three, plus and the i Series, which is available now in a limited release, and an LX model launching around June. Multiple interior and exterior finish options. HOW MUCH $115,000 for the 434 sq. ft., one-bedroom, onebath SP430 model (est. $156,500-$167,000 “all-in” price to complete) to 741 sq. ft, two-bedroom, one-bath SP750 (est. $199,000-$230,000 to complete). “All-in” includes everything, such as solar, decking, installation, permits, etc. WHY “We build to the same code as custom stick-built houses, we don’t do manufactured/mobile homes. So what is different about us is that we build to the highest code, including T24 net-zero energy requirements, but do it much faster and are generally 20%-40% better value for money than a general contractor. Most of our competitors in the ADU space build to the HUD manufactured home code, which is not as onerous as the T24 California standards. It might sound like a nuance, but it’s a very important thing for people to consider when it comes to long-term and resale value. We are truly full-service and handle every aspect of your project to make everything as easy as possible for you.” —Ed Stevenson, founder, SonderPods CONTACT 415.223.8680, sonderpods.com. Factory tours in Riverside are available. 26 MARCH+APRIL 2021 / EBRHA.COM
With the passage of numerous bills in the California State Legislature during the 2019-2020 session, multifamily properties may now construct ADUs without any design review or local requirements that are more stringent than the state’s. Highlights of these provisions include: • Two detached ADUs by right, regardless of zoning, lot coverage or other limitations • No requirement to create new or replacement parking (if ADU is created in former parking areas) • Exemption from a number of development and utility impact fees EBRHA has advocated for additional cleanup and enhancements to the ADU legislation. Unfortunately, a bill to exempt ADUs from Title 24 (energy) requirements, including solar roof installation, died during the past legislative session. A new bill in this session promoted by CalRHA aims to make three significant changes. This bill has been adopted by Assemblymember Rudy Salas and includes the following provisions: 1. Increases the height of ADUs to 20’ by right (to allow for two-story development) 2. Defines a detached ADU as only sharing one wall with the main structure and allowing two ADUs under one roof 3. Allows current units to add bedrooms by right (with only ministerial approval) Polston is a small rental property provider and assists with multifamily property ADU development.
VEEV WHO Veev, founded in 2008 and based in San Mateo. ADU components and walls (with all mechanical, electrical and plumbing built in) are made at its Union City fabrication facility, then assembled at the construction site. WHERE In the Bay Area and the surrounding area. East Bay in-development projects include homes in eight cities in Contra Costa and Alameda counties. HOW MANY One 568 sq. ft., one-bedroom, one-bath ADU. Customizations are not currently offered. HOW MUCH Veev’s full-service, “all-in” ADU list price is $249,000, which includes site compatibility assessment, permitting, land/topography survey, geotechnical report, site preparation, interconnection/trenching, foundation, crane, panelized system build, on-site assembly, solar PV installation, utility connections, furniture, solar installation, landscaping with irrigation and all inspections.
use. This even allows owners to repurpose their energy surplus for their home, increasing their energy savings. With no detail overlooked, the team ensures a modern, timeless design, outfitting ADUs with the latest smart tech that can be monitored and adjusted via Veev’s smartphone app.” —Kelly Hampton, VP, Marketing & Sustainability, Veev CONTACT 866.833.8238, adu.veev.com. A backyard model in Palo Alto is open for tours; a unit in Veev’s Union City fabrication facility and a backyard model in San Jose will be available for tours within the next few months.
WHY “Veev’s ADUs are thoughtfully designed and efficiently manufactured with superior quality. The design and engineering teams have developed an algorithm and proprietary design software that allows them to automate 70% of building design. Walls are manufactured with a fully closed and cladded panel system, allowing them to be assembled on-site at record speed. Once constructed, Veev ADUs become energy-positive with rooftop solar panels— they produce more power than their inhabitants will ever
TIP 3: The California Department of Housing and Community Development’s ADU page (hcd. ca.gov/policy-research/ accessorydwellingunits. shtml) provides a wealth of information and materials, including details about new ADU legislation for 2021 and potential state grants, as well as a handbook that answers frequently asked MARCH+APRIL 2021 / EBRHA.COM 27 questions.
SEEING GREEN
Investing in environmentally friendly upgrades reaps rewards for the planet as well as your wallet.
T
he need to protect and restore our natural resources is indisputable. Given that the residential sector accounts for about 21% of total U.S. energy consumption and the average American family uses more than 300 gallons of water per day at home, the potential for the rental housing industry to play a leading role in that effort is significant. Fortunately, being green isn’t just good for the Earth; it can also be good for a property owner’s bottom line.
28 MARCH+APRIL 2021 / EBRHA.COM
BETTER BUILDINGS
Case studies conducted by BayREN illustrate the economic benefits of enrolling. For example, after an energy and water usage analysis and site visit from a BAMBE consultant, the 18,410-square-foot, 46-unit Theater Apartments in Oakland’s Laurel District installed insulation in the attic and floors and new, energy efficient vinyl windows. New LED lighting brightened interior and exterior common areas, and within the units, energy-efficient refrigerators replaced older models. In addition to improving residents’ comfort and safety, the upgrades resulted in $34,500 in rebates and a 19% overall energy savings. Moreover, since the century-old building’s utility costs are included in the rents, the owner’s ongoing costs were significantly reduced. BayREN offers a scaled-down program to benefit owners of one- to four-unit single-family detached homes built in 2016 or earlier: Home+. This program offers up to $5,000 per unit in rebates for “a la carte” energy-saving measures. (Note: Participants must use a Home+ Participating Contractor, except for electrification appliance measures, and need approval from every resident.) BayREN also works with renters directly to help them save energy, water and money through a variety of free resources. These programs don’t cover clean energy technologies such as solar and battery backup systems, which confer the added benefits of providing power in the event of power outages and rolling blackouts and can actually allow
ALLEF VINICIUS / UNSPLASH. OPPOSITE: MRJN PHOTOGRAPHY / UNSPLASH
A smart first step toward realizing the benefits of going green is to connect with the Bay Area Regional Energy Network (BayREN; bayren.org), a group of local governments that deliver targeted, integrated and regional-scale climate solutions focused on energy and water efficiency. Represented by the Department of Conservation and Development in Contra Costa County and StopWaste (stopwaste.org) in Alameda County, BayREN offers programs that incentivize and streamline the process of upgrading inefficient systems for rental property owners. BayREN’s nationally recognized Bay Area Multifamily Building Enhancements program, or BAMBE, is open to five-plus-unit multifamily properties in any of the Bay Area’s nine counties, with small properties (under 100 units) and deed-restricted or naturally occurring affordable housing receiving priority. Offering free, no-strings-attached consultations and $750 per unit in rebates, the program is designed to save 15% or more of a building’s energy and water usage through upgrades to water heating systems (which account for 43% of the average multifamily building’s energy use), heating and cooling systems, windows, appliances and the like. Last year, multifamily property owners began receiving additional incentives to switch from gas-fueled appliances to cleaner, highly efficient electric alternatives. Owners can hire their own contractor, the property manager can oversee the entire process, and there’s no need for resident sign-off.
MARCH+APRIL 2021 / EBRHA.COM
29
30 MARCH+APRIL 2021 / EBRHA.COM
areas, property owners who invest in efficiency retrofits can anticipate less equipment downtime, better indoor air quality, fewer resident complaints and improved resident retention. Touting your efficiency in marketing materials may reduce vacancy rates, to boot: According to a RENTCafé report, 69% of renters surveyed were interested in living in an energy-efficient or green building. And down the road, owners who take measures to improve efficiency now will be prepared for increasing energy and water costs and mandatory efficiency requirements associated with California’s ambitious carbon-free-by-2045 clean energy goals.
REGENERATIVE LANDSCAPING When we think of green upgrades, it’s easy to forget about the literal green on our properties: our landscaping. In fact, according to the California Department of Water Resources, about half of urban water is used for landscape irrigation in California despite DWR’s Water Efficient Landscape
PHOTO BY SARAH SUTTON
homeowners to make a profit by selling energy back to the grid. However, BayREN works in tandem with local clean electricity providers MCE in Contra Costa County and EBCE in Alameda County, which have programs that do. Visit ebce.org to learn more about EBCE’s Resilient Home program, which provides quotes and pre-negotiated pricing in partnership with Sunrun, and mcecleanenergy.org for a host of information about solar installation, including rebates for single- and multifamily property owners. Admittedly, going the green route can be more expensive at the outset than simply meeting the minimum efficiency requirements. However, rebates like those offered by BayREN offset higher up-front costs, and local and national green-financing opportunities are available, both via local agencies and government-sponsored Freddie Mac and Fannie Mae. Moreover, the benefits accrue. In addition to increasing their NOI (net operating income) through rebates and reduced utility bills for central systems and common
Ordinance (MWELO), which sets standards for new development and retrofitted landscape projects with the intent to reduce water usage. Lawns are particularly pernicious. As landscape architect Sarah Sutton writes in her award-winning book The New American Front Yard: Kiss Your Grass Goodbye! (kissyourgrassgoodbye.com), using traditional maintenance practices, turf not only wastes water, but also depletes the soil of microorganisms and nutrients, acts as a conduit of toxic pollutants into our air and waterways, generates excessive waste and requires noisy and polluting maintenance (along with a host of other nasty deeds). So what’s the alternative? According to Sutton, it’s no longer enough to create a sustainable landscape—it has to be regenerative. “We’ve past the tipping point on sustaining our planet, and we must aggressively adopt regenerative practices in our landscapes and our life choices to curb the negative impacts of ongoing climate change,” she says.
The goal is for landscapes to foster soil health, sequester carbon, conserve water and protect habitat and resources while reducing waste and preventing pollution in our communities and watersheds: eight principles that underlie the practices of the nonprofit organization ReScape (rescapeca.org). ReScape (for which Sutton is a consultant) is a great resource for housing providers ready to kick their turf habit. Among other services, the organization provides training for designers and maintenance contractors in regenerative landscaping practices and maintains a directory of local professionals who have completed the program. What does a regenerative landscape look like? “Healthy, living soil is literally the foundation,” Sutton says. Appropriately sized native plants that thrive without artificial fertilizers are fundamental, too. “If plants are grown where they won’t get larger than the space available, then you don’t need people out there hedging and creating green waste. The maintenance becomes very straightforward,” she adds. “Do it right, and the landscapes practically take care of themselves.” A healthy landscape will also naturally attract and support local wildlife, including birds, butterflies and bees. The financial upside of regenerative landscaping also can be substantial. While rolling out sod may be cheaper initially, the cumulative long-term cost of a lawn can be much higher per acre than a naturalized landscape, given the water use and frequent labor required for repeated mowing and edging. One multifamily complex reported an annual savings in maintenance costs of nearly $50,000 after replacing 80% of a large decorative landscape water feature and lawn areas with an attractive cobbled dry stream bed and a colorful, water-conserving landscape. Water savings for simply replacing a 5,000-square-foot lawn with a drought-tolerant landscape can be as much as 190,000 gallons per year. Understandably, rental property owners facing COVID-19 related financial challenges may feel apprehensive about investing in capital improvement projects right now, but in light of the global climate crisis, the ramifications of doing nothing are also daunting. With support from programs like those described above, owners needn’t choose between their principles and their profits: going green results in seeing green. That’s what you call a win-win.
GREEN SCORECARDS
Build It Green’s GreenPoint Rated program trains and educates building professionals and offers an easy-tofollow system to incorporate best practices into new construction or remodels. To date, the program has certified over 80,000 GreenPoint Rated homes (builditgreen.org). ReScape offers a similar program, ReScape Rated, for landscapes. A notable benefit: Studies show that green ratings translate to higher rents and occupancy rates. MARCH+APRIL 2021 / EBRHA.COM
31
32 MARCH+APRIL 2021 / EBRHA.COM
Suppliers
COMPREHENSIVE SUPPLIER DIRECTORY
ACCOUNTING & TAX
Martin Friedrich, CPA 510.895.8310 besttaxcpa.com AFFILIATIONS
ALN Apartment Data 800.643.6416 alndata.com ATTORNEYS — EVICTIONS/ PROPERTY OWNER DEFENSE
Barth Calderon LLP Paul Hitchcock | 714.704.4828 Bornstein Law Daniel Bornstein | 415.409.7611 bornstein.law Burnham Brown Charles Alfonzo | 510.835.6825 burnhambrown.com The Law Offices of Alan J. Horwitz Alan J. Horwitz | 510.839.2074 wwwalanhorwitzlaw.com
Richards Law John Richards | 925.231.8104 richards.legal.com Zacks, Freedman & Patterson, PC Lisa Padilla | 415.956.8100 zfplaw.com
ASSOCIATIONS
Pacific Western Bank Kara Mooney | 310.616.0353
Albert Nahman Plumbing & Heating Albert Nahman | 510.843.6904 albertnahmanplumbing.com
Luther Burbank Savings Stephanie Penate | 310.616.0353
PROPERTY MAINTENANCE
Hamilton Families Mayo Lunt | (415) 321-2612 BANKING/LENDING
First Foundation Bank Michelle Li | 510.250.8133 ff.inc.com REMODELING & BUILDING SUPPLIES
CONSTRUCTION
ATTORNEYS — REAL ESTATE/CORP.
Burnham Brown Charles Alfonzo | 510.835.6825 burnhambrown.com Jack Schwartz, Attorney at Law Jack Schwartz | 650.863.5823 jwsjr1220@comcast.net
LITIGATION SUPPORT SERVICES
PLUMBING/WATER HEATERS
Zacks, Freedman & Patterson, PC Scott Freedman | 415.956.8100 zfplaw.com
Zacks, Freedman & Patterson, PC Lisa Padilla | 415.956.8100 zfplaw.com
Complete Electric Clay Bartley | 510.325.7462 complete.electric.org
Alameda County Healthy Homes Dept. Larry Brooks | 510.567.8282 larry.brooks@acgov.org or aclppp.org
California Strategic Advisors Ron Kingston | 916.447.7229
The Shepherd Law Group Michael Shepherd | 510.531.0129 theshepherdlawgroup.com
Richards Law John Richards | 925.231.8104 richards.legal.com
ELECTRICIANS
LEAD, MOLD & PEST MANAGEMENT
FINANCIAL PLANNING
Habitat Erik Preston | 415.968.1625 habitatadu.com
Law Offices of John Gutierrez Francisco Gutierrez | 415.805.6508 gtzlegal.com
R & S Overhead Garage Door Sean Boatright | 510.483.9700, x14 rsdoors.com
Watts, Cohn & Partners, Inc. Mark Watts | 415.777.2666 wattscohn.com
American Bath Enterprises, Inc. Lynda Clark | 415.968.1625 habitatadu.com
Law Offices of John Gutierrez John Gutierrez | 510.647.0600, x2 jgutierrezlaw.com
DOORS & GATES
SpottCheck Consulting Susan Spott | 510.816.1452 spottcheck.com
Law Offices of Brent Kernan Brent Kernan | 510.712.2900 bkernan@aol.com
ATTORNEYS — LAND USE/ CONDO CONVERSION
WESLEY TINGEY / UNSPLASH
Law Offices of John Gutierrez John Gutierrez | 510.647.0600, x2 jgutierrezlaw.com
Axis Construction Dawn Alonzo | 925.400.3997 axisconstruction.com KMK Contracting & Property Services Kevin Knobles | 925.292.8667 kmkcontracting.com SGDM, LLC. Henry Mak | 415.688.9869 hmak@sgdmllc.com Simpson Gumpertz & Heger SKenneth T. Tam | 415.343.3048 sgh.com West Coast Premier Construction, Inc. Homy Sikaroudi | 510.271.0950 wcpc.inc.com CONTRACTORS/RESTORATION
P.W. Stephens Environmental Steve MacFarlane | 510.651.9506 pwsei.com SGDM, LLC. Henry Mak | 415.688.9869 hmak@sgdmllc.com
St. John & Associates Michael St.John | 510.845.8928 Wilkinson Wealth Management Steven Wilkinson | 510.625.1400 WilkinsonWealthManagement.com FLOOR COVERINGS
Bay Area Contract Carpets, Inc. Ken Scott | 510.613.0300 bayareacontractcarpets.com GOVERNMENT AGENCIES
Oakland Housing Authority Leased Housing | 510.874.1500 oakha.org HUMAN RESOURCES MANAGEMENT
A+ Cleaners LLC Angel Cornejo | (415) 416-5291 PROPERTY MANAGEMENT
All County Bay Area Property Management Perry Harmon | 510.900.5400 allcountybayarea.com Beacon Properties Aaron Young | 510.428.1864 beaconbayarea.com Crane Management Kit Crane | 510.918.2306 cranemanagment.net The Enterprise Company William McLetchie | 510.444.0876 theenterpriseco.com
Avitus Group Lance Harris | 925.827.0680 avitusgroup.com
Kasa Properties Tania Kapoor Mirchandani 415.377.9452 tania@kasaproperties.com
INSURANCE
Lapham Company Jon M. Shahoian | 510.594.7600 laphamcompany.com
Bulloch Insurance Brokers, Inc. Curt Bulloch | 925.640.0485 curtbulloch.com Commercial Coverage Insurance Paul Tradelius | 415.436.9800 comcov.com
Seville Real Estate and Management Maya Clark | 510.244.1289 sevillepropertymanagment.com
Kelly Lux — State Farm Insurance Kelly Lux | 510.521.1222 Kelly.lux.gjcg@statefarm.com
Shaw Properties Judy Shaw | 510.665.4350 shawprop.com
Pacific Diversified Insurance Richard Callaway | 925.788.5558 rcallaway@pdins.com
TCI Building Services Scott Isacksen | 510.877.0526 tcibuildingservices.com
INTERCOMS & ACCESS CONTROLS
Vision Property Management Frank Thomas | 510.926.4104 vpmpropertymanagement.com
R & S Overhead Garage Door Sean Boatright | 510.483.9700, x14 rsdoors.com
MARCH+APRIL 2021 / EBRHA.COM
33
supplier directory UTILITY BILLING AND MANAGEMENT
Livable Daniel Sharabi | 415.799.5100 bayareabinsupport.com WASTE & RECYCLING MAINTENANCE
Bay Area Bin Support Nancy Fiame | 888.920.BINS bayareabinsupport.com TrashScouts Peter Gella | 510.788.0462 trashscouts.com bawaste.com
Activate Your Voice Western Management Property, Inc. Leslie Penglis | 510.451.7194 westernmp.com Yardi Systems Leslie Penglis | 800.866.1124 yardi.com REAL ESTATE BROKERS & AGENTS
ARA Pacific Mike Colhoun | 415.273.2177 arausa.com CBRE Keith Manson | 510.874.1919 cbre.com Coldwell Banker Commercial Henry Ohlmeyer | 925.831.3390 coldwellbanker.com Deena Owens, Realtor Deena Owens | 510.225.5810 owensrealestate.com Lapham Company Tsegab Assefa | 510.594.0643 laphamcompany.com Lee & Associates Commercial Real Estate Michael Lopus | 925.239.1424 mlopus@lee.associates.com NAI Northern California. VP John Caronna | 415.531.5225 jcaronna@nainorcal.com NAI Northern California Grant Chappell | 510.336.4721 nainorcal.com The Pinza Group Steven Pinza | 510.725.4775 theprescottcompany.com The Prescott Company David Weglarz | 510.398.1027 pinzagroup.co
34 MARCH+APRIL 2021 / EBRHA.COM
Seville Real Estate and Management Maya Clark | 510.610.7699 homesbyseville.com
R & S Overhead Garage Door Sean Boatright | 510.483.9700, x14 rsdoors.com
Tyler Clark 925.788.5952 compass.com/agents/tylerclark/?referrer=omnibox
SGDM, LLC. Henry Mak | 415.688.9869 hmak@sgdmllc.com
SEISMIC CONSTRUCTION
Ukiyo Realty Nicholas Bruce | 510.575.0550
Simpson Gumpertz & Heger Kenneth T. Tam | 415.343.3048 sgh.com
RENT CONTROL CONSULTANTS Bay Property Group Cristian Villarreal | 510.474.7404 cristian@baypropertygroup.com
West Coast Premier Construction, Inc. Homy Sikaroudi | 510.271.0950 wcpc.inc.com
RENTAL SERVICES
SEISMIC ENGINEERING
Caldecott Properties Pier Porrino | 510.594.2400 caldecott.com
Simpson Gumpertz & Heger Kenneth T. Tam | 415.343.3048 sgh.com
ReLISTO Eric Baird | 415-237-1819 clicks.weblinkinternational.com
SGDM, LLC. Henry Mak | 415.688.9869 hmak@sgdmllc.com
ROOFERS
Fidelity Roof Company Doug Kellor | 510.547.6330 fidelityroof.com Frank Fiala Roofing Frank Fiala | 510.582.6929 ffialaroofing.com General Roofing Company Michael Wakerling | 510.536.3356 generalroof.com SECURITY/SURVEILLANCE
Nor.Cal Private Security Services Jimar Richardson | 209.534.6118 ncpsecurity.com
West Coast Premier Construction, Inc. Homy Sikaroudi | 510.271.0950 wcpc.inc.com TENANT SCREENING SERVICE
Contemporary Information Corp. (CIC) Dan Firestone | 888.232.3822 continfo.com TOWING SERVICE
Pro Towing Daniel Russo | 510.533.9600
EBRHA ON YOUR SIDE
Have you experienced a situation or ruling that you feel infringed on due process as a property owner? We constantly hear about outcomes that are just plain wrong. EBRHA collects member experiences in order to make changes to a broken and biased system. Tell us your story today at ebrha.com. GRAND JURY COMPLAINTS
This investigative body looks at complaints received from citizens alleging mistreatment by officials, suspicion of misconduct,or government inefficiencies. To file a complaint, send an email to grandjury@acgov.org. ATTORNEY COMPLAINTS
The Office of Chief Trial Counsel reviews complaints of unethical conduct by attorneys licensed to practice in California (this includes Rent Board hearing officers and tenant attorneys engaged in suspicious misconduct). To file a complaint, go to www. calbar.ca.gov, find the “Quick Links” on the left side, and then click on “Attorney Complaints” and complete the application.
ad index Beacon Beacon Properties Beacon Properties Properties
Multi-Family Commercial Property East Bay Property Management & Brokerage Services Since 1990 General Liability EastEast BayBay Property Management Property Management & & BrokerageServices Services Since 1990 Brokerage Since 1990 • We add value to buildings
•
• Experienced and informed • We add value to buildings •• Fully We addcomputerized valueand toinformed buildings Experienced
•• Integrity and care Fully computerized • Experienced and informed • Integrity and care
• Fully computerized
Aaron A. Young,
• Integrity and President/Broker Aaron A. care Young, President/Broker
______
Tel 510-428-1864 Oakland, CA 94609 AaronTel @B510-428-1864 eaconBayArea.com
.BeBaecaocnoBnaByaA Awarwow n@ yArerae.ac.ocomm www.BeaconBayArea.com
466 40th Street Oakland, CA 94609 Tel 510-428-1864
925.788.5558 rcallaway@pdins.com hosprop.com
Sincere Home Décor. . . Inside Back Cover
INSURANCE
PROPERTY MANAGEMENT & SALES Beacon Properties. . . . . . . . . . . . this page
Planned insurance programs since 1906 LICENSE# 0K07568
Aaron@BeaconBayArea.com www.BeaconBayArea.com
INSURANCE
Pacific Diversified Insurance . . . this page
______
Aaron A. Young, 466 40th Street Oakland, CA 94609 President/Broker 466 40th Street
ebrha.com
PRODUCTS & SERVICES
WASTE MANAGEMENT Bay Area Bin Support. . . . . . Back Cover Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by EBRHA, express or implied, of the advertiser or any goods or services offered.
What happens when you don’t advertise?
NOTHING Advertise in
RENTAL HOUSING
magazine to reach owners and managers of 30,000+ rental units.
For more details go to: WWW.EBRHA.COM/ADVERTISING MARCH+APRIL 2021 / EBRHA.COM
35
Last Look P O O P H A P P E N S . D E A L W I T H I T.
We love dogs. What we don’t love: when their humans are irresponsible about waste disposal. When not managed properly, dog feces can pollute water sources, spread disease, damage property and even violate local laws. Plus, it’s just plain gross! Installing signs and pet waste stations equipped with bags (look for biodegradable options) and bins is a smart step, as is designating a place for pets to do their business. When that’s not enough, consider enrolling in PooPrints (pooprints.com), a company that identifies “offenders” by DNA-matching unscooped poop with an individual pet in its DNA World Pet Registry. Whatever you do, be sure to spell out your pet waste policy in your lease. Being clear about the rules and the penalties for breaking them is the best way to keep everybody out of the doghouse. 36 MARCH+APRIL 2021 / EBRHA.COM
NGSTOCK/ADOBESTOCK
So what can you do when some residents of your rental property refuse to pick up after their pups?
4 MARCH+APRIL 2021 / EBRHA.COM
