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Aiesha Blevins
2024 President Southern California Rental Housing Association
President’s Message:
Congratulations to the 2024 Mark of Excellence winners.
Before my term as SCRHA President, I was honored to serve on the committee and chair the Mark of Excellence Awards Ceremony. It’s long been one of my favorite nights, and this year was no exception. While it was an incredible honor to receive the Industry Achievement Award, I sincerely enjoyed celebrating the rental housing professionals who set the mark of excellence for our industry.
The Mark of Excellence Awards are a symbol of outstanding quality, innovation, and integrity. They represent a commitment to excellence and the power of vision, highlighting those who consistently serve the communities of Southern California. This award is special because it isn’t just about individual achievements; it celebrates the impact that each of you has had on your industry and on those around you.
I’m sharing my heartfelt congratulations to this year’s winners. You stand among the very best in your field, and it was an honor to celebrate your success.
To our nominees, your accomplishments this year have set a high standard and are already inspiring the next generation of leaders. Whether you received an award or not, please know that your efforts have been noticed. Each of you has made a significant mark.
I also extend my deepest gratitude to our sponsors, without whom this event would not be possible. Your continued support plays a vital role in recognizing and uplifting excellence in our community.
The Mark of Excellence Awards are a powerful reminder of what is possible when we aim high and work hard. May you continue to lead, inspire, and set an example for all who follow in your footsteps. Congratulations again to the winners, the nominees, and everyone who makes this event possible.
We look forward to seeing the incredible contributions you will continue to make in the years ahead.
AAlan Pentico, CAE
Executive Director
Southern California Rental Housing Association
Executive Director’s Message: Thank you for you decades of support.
s I write this message, the election is only a few weeks away and the results of the November 5 election remain unknown. While I don’t have a crystal ball to see into the future, I know that I am proud of our efforts to defeat Proposition 33 and elect representatives who will work with us to bring quality housing to all in Southern California.
Together with your support, we have built a strong coalition of community partners in our fight to protect Costa-Hawkins and stop rent control from spreading. No matter the outcome, our advocacy work will continue and will be strengthened by these relationships and your support.
Elections mark pivotal moments that can influence the course of policy, community needs, and public perspectives. However, our mission transcends any single election cycle. We hold true to our vision of reenvisioning quality housing for all and are steadfast in our efforts to create a thriving rental housing community through advocacy, education, and collaboration. These principles do not shift with the political landscape, and they are the foundation on which our work rests.
We will continue to focus on advocating for the rental housing industry and sharing the perspective of housing providers with our elected officials.
Southern California Rental Housing Association has been the voice of the rental housing industry for more than 100 years when we were founded in response to the People’s Ordinance of 1919, which relegated trash pickup and collection fees as the responsibilities of southern California multifamily property-owning
taxpayers. With decades of experience, we have successfully fought against rent control multiple times and supported our members every step of the way.
While we all wait for the results of the November 5 election, I want to thank you for your ongoing support and trust in us to carry this work into the future. We are grateful to stand alongside you, united in purpose. We want to especially thank those that donated to No on Prop 33, to our Industry Defense Fund and our Political Action Committees. We are grateful for your financial support.
CE LE B R ATIN G
Entrada | Greystar
John F. Cihak Company
El Pedregal | Cirrus
Yvonne Coover-Stone Company
Villa Pacific Properties
Wilma H. Healey Company
Betty Kern Company
Limoncello
Hitching Post Motels, Inc.
Irene Jackson Company
Whalen Properties
CE LE B R ATIN G
NB Properties, Inc.
Jack Zolezzi Trust
GTF Properties
Cameron Brothers Company LLC
Donna Webber Company
Diamond Apartments
John Belanich Company
Susie and Jim Uribe
Creaser & Warwick, Inc.
DNC Limited Partnership
Rohn Properties Management
The Kevane Company, Inc.
Elinor van den Akker Company
R & V Management
RG Investment Real Estate Services Inc.
Karen Virtue Company
Caesar Oriol Company
Fred and Shirley Salzer
La Paloma Apts.
Fleetwood Properties
Rodney Smith Company
Rolf Steeve Company
Fred and Jan Fogerty
Kenneth Rundlett Company
Laurence and Carolyn Kaiser
Wood/Saukkonen
Errol Tonsky Company
Sheila Gleason
Gregory Robinson Company
Pedro Ferreira Company
Richard Hancock Company
Michael Boardman Company
Sierra Mar Properties LLC - Paul Hasley
Mary Ann Tarantino Company
Stefan Hoffer Company
Terry Moore, CCIM, Inc.
Jerry Conway Company
Robert Neill Company
IHA Partners Inc.
Robert and Linda Lofgren
Jeffrey Malik Company
G. Beit-Ishoo / SeaDate
George and Celida Haddad
Al Smithson Company
Longley Family Trust - Nancy Longley Trustee
Waltwood Properties
Marilynn Nemeroff Company
Nancy Mullins Company
NLJ, LLC
Brothers II
T1 PropertiesE
Steve Schmidt & Company
Legar Management
Plaza Verde Apartments
M. C. Contracting Service
Baldwin Moore Realty
Josephine Cree Company
Frances Harvey Company
RJW Properties, Inc.
Laura Sperry Company
AJ Properties
Wakeland Housing & Development
ATI Restoration, LLC
John B. Harris
David Olson Company
Tamara Kabban-Miller
Muraoka Enterprises Inc.
Gurley N. Sellers, III Company
People Helping Others Prop. Mgmt.
Law Offices of Andrew C. Laubach
Michael Weinrick Company
Walz Properties| Fortuna Investment Group
Hobrock Enterprises LLC
Mark Marshall Company
Serge Decorte Company
Elizabeth Dammassa-Uglik Company
REC Properties| Peasquitos Point Apts.
Tim Budniewski Company
Dennis & Tina Daneri
Mira Bella Apartments | Simpson Property Group
C & A Family, LLC
Araz Yacoubian Company
Saxony Village Partnership
Sherry Bird Company
Sean & Gracie Wilson
Sciuto Properties
Humphreys Residential
Tom Brady Company
Axiom Real Estate
PB Garnet Apartments
Barry Treahy Company
Dennis and Marian Pierce
Jesus and Yolanda Arroyo
Betty Bark Company
This Probably Never Happened to You, But...
By C. Finley Beven
It was a Sunday evening, and the tenant from #3 called to report that her toilet was backed up. Worse than that, the toilet had overflowed. We confirmed that her apartment is a onebedroom unit, so it was clear that without another bathroom, we had to get a drain-cleaning vendor out there as quickly as possible.
Our vendor went out, and it was a relatively simple clean-out … but what was pulled out was a surprise, and alerted us to a much larger problem. It was a build-up of “flushable wipes”. As it turns out, so-called “flushable wipes” are anything but flushable. If you have any doubts about this, try doing a Google search on ‘‘Images for Flushable Wipes Clog”. You will be amazed at the clogging capacity of these wipes, and disgusted by the pictures you will see.
The simple concept here is that nothing but “human waste” and toilet paper should be put in the toilet. Nothing else. We have talked to several drain-cleaning vendors, and all agree that flushable wipes have moved to first place as causes for drain blockages.
We decided that this is so important that we have now included a warning about this in our “Addendums” to new lease agreements, along with the advisories about Megan’s Law, Mold, Lead, etc. Our advisory goes as follows:
“So-called FLUSHABLE
- WIPES
ARE NOT
FLUSHABLE. NO MATTER WHAT THEY SAY ON THE LABLE, THEY DO NOT DISOLVE
LIKE TOILET PAPER. THEY CAUSE TOILET CLOGS, AND IF YOU USE FLUSHABLE WIPES AND YOUR TOILET CLOGS BECAUSE OF THIS USAGE, YOU ARE HERE AGREEING THAT ALL CHARGES RELATED TO THE CLEAN-UP WILL BE PAID BY YOU.”
This warning is not likely to be 100% effective, as many people will just ignore what we write, but if it is even 50% effective we are way ahead. It just seems worth the effort to communicate with our tenants, and let them know if they are careless, there may be financial consequences. For our existing tenants, we send out annual up-dates to the house rules each December. This advisory will be added to that notice. It has worked well for us.
Dear Readers: This article is the 250th in a series based on the lessons we have learned the hard way. The contents of these articles are merely opinions of the writer. They are not intended as specific legal advice and should not be relied upon for that purpose. Our practice is in constant refinement as we adjust the way we operate in an ever- changing market. I appreciate your questions, comments, suggestions, and solutions.
Contact C. Finley Beven, CPM, CCAM, JD. 99 S. Lake Avenue, Pasadena, 91101. Fin.Beven@ BevenandBrock.com www.BevenandBrock.com.
C. Finley Beven has been involved in real estate, property maintenance and property management since 1975. He is a Certified Property Manager (CPM), Institute of real estate Management since 1987. He is also a Certified Community Association Manager (CCAM) and is a member of the California Association of Community Managers. He has a brokers License #00696626 in the State of California. He has a BA, USC; JD, Southwestern University Beven & Brock Property Management Co., Inc. 99 S. Lake Avenue, Pasadena. (626) 243-4145 Fin.Beven@BevenandBrock.com - www.BevenandBrock.com
Easy Ways to Deter Homelessness Around Your Rental Property
By Patti ‘Widget’, Widget’s Way
As a property owner or manager, ensuring the safety, cleanliness, and appeal of your rental property is a top priority. One concern that many landlords face is how to effectively deter homelessness from developing around their properties. While it’s a sensitive issue, there are practical steps you can take to maintain your property’s security and appeal while also encouraging those experiencing homelessness to seek appropriate help.
INCREASE EXTERIOR LIGHTING
One of the most effective ways to deter homelessness around your rental property is by increasing exterior lighting. Areas with poor lighting are more attractive to those seeking a place to sleep or stay out of sight. By installing bright, motion-sensor lights around the perimeter of your property, you can eliminate dark corners and make the area less appealing as a place to set up camp. Additionally, well-lit areas can deter other unwanted activities, such as vandalism or loitering.
SECURE WATER SOURCES
Another method to deter homelessness is to secure outdoor water sources like hose bibs. By locking hose bibs, you can prevent easy access to water, which may discourage individuals from congregating near your property. This simple step not only protects your resources but also discourages prolonged stays. There are various hose bib locks available that are easy to
install and can be a crucial part of your overall property management strategy.
MAINTAIN LANDSCAPING
Well-maintained landscaping is not just about curb appeal—it can also play a significant role in deterring homelessness. Overgrown bushes, trees, and other greenery can provide hidden spots where people may seek shelter. By keeping bushes and trees trimmed back, you remove potential hiding places, making your property less attractive for those looking for a secluded area to rest. Regular maintenance of the landscaping around your rental property also sends a message that the area is well-cared for and monitored.
CONSIDER PROPERTY FENCING
If your rental property is in an area where homelessness is a recurring issue, installing fencing around your property might be a worthwhile investment. A wellconstructed fence acts as a physical barrier that can deter individuals from entering the premises. It also helps to clearly define the boundaries of your property, which can be a deterrent in itself. Consider options that not only enhance security but also add to the aesthetic appeal of your property.
ENCOURAGE COMMUNITY INVOLVEMENT
Creating a strong sense of community among your tenants can also help deter homelessness. When tenants feel invested in their surroundings, they are
more likely to report suspicious activity or alert you to potential issues before they become major problems. Encouraging tenants to be vigilant and to communicate with property management can help maintain a safe and secure environment for everyone.
WORK WITH LOCAL AUTHORITIES AND ORGANIZATIONS
Lastly, it’s important to recognize that while these steps can help deter homelessness on your property, they don’t address the root causes of homelessness. Building a relationship with local authorities and organizations that provide services to the homeless can be beneficial. These organizations can offer resources and support to individuals in need, helping to address the issue in a more humane and comprehensive way. By collaborating with local services, you can contribute to long-term solutions while protecting your property.
In conclusion, deterring homelessness around your rental property involves a combination of practical measures and community involvement. By increasing
exterior lighting, securing water sources, maintaining landscaping, and considering fencing, you can make your property less attractive to those seeking shelter. Encouraging tenant involvement and working with local organizations can further support these efforts, ensuring your rental property remains safe, clean, and appealing for all.
Have you ever been in a sticky situation with a tenant where you didn’t know what to do? Have you often though, “I wish there was someone I can call to help get me out of this mess!” That’s where I come in! Landlords and property managers can use my 25 plus years of experience to get tips and suggestions on how to handle difficult and awkward situations with tenants. Learn more and become a member of Widget’s Way Property Management Consulting at https://www. widgetsway.com/become-a-member/
Patti teaches a wide range of classes on property management topics; she is a keynote speaker on property management and housing issues and has published numerous articles for apartment associations. Patti is a repeat guest speaker at UCLA. She also holds various certifications in the industry related to her field, such as a CA licensed Real Estate Broker, CCRM, lead based paint certified renovator from the EPA, Fair Housing and more.
Watch Out for Rent-Control Madness
By Steven Greenhut
For the latest example of why “local control” is no kind of governing principle, I present readers with the example of Proposition 33 — a rent- control measure that Californians will consider on the November ballot. Its supporters — a who’s who of left-wing activist groups and mainstream progressive organizations such as the California Democratic Party — claim that the measure merely allows local governments to impose rent controls tailored to local conditions.
Indeed, the so-called Justice for Renters Act features this simple text: “The state may not limit the right of any city, county, or city and county to maintain, enact or expand residential rent control.” If voters approve the initiative, it would repeal the Costa- Hawkins Rental Control Act. That 1995 law responded to concerns by landlords at
the growing movement by local governments to impose some of the strictest rent-setting laws in the nation.
Costa-Hawkins exempted newer construction (post–1995) and single-family homes from rent controls and also forbade vacancy controls — laws that control what a landlord can charge for a unit even after a tenant leaves the property. The state currently enforces a statewide rent-control cap (5 percent a year plus inflation with a total cap of 10 percent) and a number of cities have stricter laws. But property owners are free to raise rents to market rates upon vacancy.
Supporters of Prop. 33 are correct the measure doesn’t mandate any form of rent control, but would allow local governments to impose additional controls. However, they know that many liberal cities will immediately jump at the chance to control rental prices to just short of an
outright taking. The good news: Voters overwhelmingly rejected two similar measures by the AIDS Healthcare Foundation in 2018 and 2020, so we can hope they do so again.
It’s hard to overstate the degree to which this poses an existential threat to property owners. As the Southern California News Group noted in its recent editorial opposing Proposition 33, some supporters of ending Costa-Hawkins also have expressed support for overturning the Ellis Act — a state law that allows rental owners to go out of business. (Imagine needing a law allowing you to exit a business.)
As the Southern California News Group explained recently in an editorial opposing the initiative, “repeal [of the Ellis Act] along with passage of Prop. 33 would mean landlords could be forced to remain in a money losing business against their will. With Prop. 33, cities would be free to regulate your single-family house — making it virtually impossible to evict a tenant so you can move back in.”
So the state could forbid a landlord from raising rents in order to turn a profit — and also forbid that landlord from exiting the rental business. Indentured servitude might soon make a comeback in California under the guise of protecting tenants from market- based rent increases. But, hey, it’s the local elected officials who are doing so, so how dare we complain?
For instance, Huntington Beach’s then-Mayor (and current state Senate candidate) Tony Strickland said the following at a council meeting: “Statewide rent control is a ludicrous idea, but the measure’s language goes further. It gives local governments ironclad protections from the state’s housing policy and therefore overreaching enforcement.”
Some publications viewed that as support for Prop. 33, which would be odd for a “conservative” Republican. Strickland has been so intent on invoking local control to oppose state policies that reduce regulations for building multi-family housing that he seemed to be arguing that the measure might help his city and other localities evade state housing laws.
Strickland thankfully clarified and assured voters that he opposes statewide rent control, but it was a reminder of the odd places politicians will go when they take local control — rather than more personal liberty — as a
foundational principle. In California, local governments are more apt than the state or feds to a) raise taxes; b) impose price controls; c) regulate guns, etc. Conservatives and progressives often use that mantra on a situational basis.
A few things are obvious. Rent control destroys housing markets, just as all price controls destroy whatever markets they seek to regulate. They keep prices “low” but then shortages emerge. It reminds me of the old Soviet joke, where price controls were rampant: “A man walks into a shop and asks if they have any meat. The clerk says, ‘No, here we don’t have any fish. The shop that doesn’t have any meat is across the street.’”
Supporters of rent control try to create the impression that there’s disagreement among economists about the impact of rent control. There is no such disagreement among serious scholars. Even the socialist Swedish economist Assar Lindbeck famously said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.” When your preferred policy is as useful as bombing, you might have a problem.
Recent studies show San Francisco’s rent-control policies reduced rental-home supply by 15 percent. I’ve reported on the thousands of vacant units in that city — mainly the result of property owners who rather forego $3,000 or more a month in rent that rent their apartment to a stranger who might be impossible to evict because of the city’s tenant laws.
Imagine how much supplies might fall if voters give that city the greenlight to impose even more extreme rent controls? And it’s clear that many California cities are chomping at the bit to pass these laws, even though rent prices appear to be moderating.
Soaring rent and home prices are the direct result of California’s long-standing environmental and slowgrowth regulations that have resulted in too little housing construction to meet demand. Instead of obliterating property rights in the name of local control, Californians need to further reduce building rules and let its residents control their own lives.
Steven Greenhut is the Western region director for the R Street Institute and an author, speaker, public commentator and coalition ally in venues where it is possible to move state and local policy in a free-market direction. Steven is the author of three books, Abuse of Power: How the Government Misuses Eminent Domain (2004); Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation (2009); and Winning the Water Wars: California Can Meet its Water Needs by Promoting Abundance Rather than Managing Scarcity (2020).
LANDLORDS SHOULD WELCOME TENANTS RUNNING FAMILY CHILD CARES
by Alan Pentico, CAE
Imagine this: You’re a parent who needs to find a safe place for your child while you work. Then you find out a neighbor right in your building operates a family child care. That’s right — pick-up and drop-off are steps away from your own front door.
Sounds dream-come-true convenient, right? That’s one big reason why landlords should support and even encourage tenants who want to provide child care in their apartments.
Landlords are already required by law to allow family child care in rental homes of any kind: apartments, townhomes, condominiums and single-family residences. I believe this is not only a mandate, but an opportunity for rental housing providers.
After all, our community is in a child care deficit — and landlords, who are a part of the fabric our community too, can help.
Child care is a “sector in crisis” countywide, according to a 2022 study by the University of San Diego and the San Diego Foundation. More than 360 child care centers and family child care homes have closed since the pandemic, and there are no available licensed childcare options for 48% of children ages 0 to 5 whose parents work.
While child care is a countywide challenge, some areas were notable for the gap between supply and demand.
Within the city of San Diego, one of the most difficult areas to find child care for kids aged 5 an under is the community of Normal Heights because of the area’s high number of working parents, according to the study. For infants and toddlers, Clairemont and Mira Mesa were identified as areas with very few slots for high demand.
The California law giving renters the right to start a family child care in their home isn’t new, but many people don’t know about it. And recently, the city of San Diego decided that more people should know about it. The city is requiring all lease agreements to notify renters that they have the right to operate a home day care — a law that kicked in Jan. 1, 2024.
With the new required notice in leases, landlords and tenants are informed of their rights and responsibilities.
Elsewhere in the county, Escondido, Oceanside and Carlsbad are difficult places to find childcare for kids 5 and under, and Encinitas is tough for infants and toddlers.
Landlords may have some concerns about having a child care on the property, such as traffic or noise, but
again this use is allowed by law. And there are many benefits to keep in mind.
First, child care is a steady job. Everyone wins here — the tenant has a reliable source of income and the landlord can be more sure of receiving rent.
Having a family child care provider on site is a major benefit for other tenants with children. For working parents, having access to quality childcare within their own residential complex is a source of great comfort and convenience.
There’s also a safety bonus. The child care provider — plus any employees — are extra eyes and ears keeping watch on the property. With kids around, everyone is paying more attention.
Now, if you’re a renter thinking about starting a child care in your home, there are a few things to do. Understanding the legal framework is crucial for both tenants and landlords.
Under the California Health & Safety Code, small family child care facilities are not considered a “business use of property,” and so they would be protected under any leases or rental agreements that prohibit operating a business out of a rental home. Tenants wishing to open a family child care must follow specific procedures,
such as obtaining a state license and providing 30 days’ written notice to the property owner or manager.
As always, it’s important to be a good neighbor. The same rules that apply to other residents apply to childcare providers. For example, control excessive noise or activities that could damage the property.
Landlords, for their part, cannot discriminate against tenants operating daycares but may require a higher security deposit within the limits set by state law. Additionally, childcare operators must either obtain liability insurance, secure a bond, or obtain waivers from parents acknowledging the lack of such coverage.
A family child care facility can foster a more vibrant, supportive, and safe living environment for all residents. It’s reliable income for the tenant and the landlord, it makes the building safer, and it helps parents who live there.
Alan Pentico, CAE, is the executive director of the Southern California Rental Housing Association.
AI: A Double-Edged Sword For Housing Providers Facing Rising Energy Costs
By Livable Content Team
Artificial Intelligence (AI) has revolutionized countless industries, but its impact on energy consumption and costs is a complex issue. For housing providers, AI presents both opportunities and challenges as they grapple with rising energy bills.
THE ENERGY-HUNGRY BEAST: AI’S POWER CONSUMPTION
One of the most significant challenges is the energy consumption of AI systems. The vast data centers powering AI applications require immense amounts of electricity. As housing providers often own or manage properties with multiple units, the cumulative energy consumption of tenants using AI-driven devices can significantly impact overall energy costs. This increased demand can lead to higher utility bills, which ultimately affects a housing provider’s bottom line.
AI AS A POTENTIAL SAVIOR: ENERGY EFFICIENCY AND OPTIMIZATION
Despite the challenges, AI also offers potential solutions to mitigate rising energy costs. Smart thermostats, powered by AI, can optimize heating and cooling based on occupancy patterns, weather conditions, and energy prices. This can lead to significant energy savings. AIdriven building management systems can also identify energy inefficiencies, such as faulty equipment or poor insulation, helping housing providers make targeted improvements.
Furthermore, AI can analyze tenant behavior to optimize energy consumption. For example, by understanding when tenants are typically home or away, housing providers can adjust building systems accordingly, reducing energy waste.
THE TENANT FACTOR: BALANCING COSTS AND
AMENITIES
Housing providers must carefully consider the impact of AI on tenant expectations. While energy-efficient appliances and smart home features can attract renters, they also come with a higher upfront cost. Additionally, tenants may be reluctant to change their behavior, even if it leads to lower energy bills.
To address these challenges, housing providers can offer incentives, such as reduced rent or utility bill credits, for energy-conscious tenants. Clear communication about the benefits of energy efficiency and the potential cost savings can also encourage tenant participation.
MITIGATING RISKS AND MAXIMIZING BENEFITS
To navigate the complex relationship between AI and energy costs, housing providers should:
• Conduct energy audits: Identify areas of inefficiency and prioritize improvements.
• Invest in energy-efficient equipment: Upgrade appliances and systems to reduce energy consumption.
• Implement smart building technologies: Leverage AI to optimize energy usage and identify cost-saving opportunities.
• Educate tenants: Promote energy-saving behaviors and offer incentives for participation.
• Monitor energy consumption: Track energy usage to identify trends and potential issues.
• Consider renewable energy options: Explore solar panels or other renewable energy sources to offset costs.
While AI presents challenges in terms of energy consumption, it also offers opportunities to reduce costs and improve building efficiency. By carefully considering the potential impacts and implementing effective strategies, housing providers can mitigate risks and maximize the benefits of AI technology.
Livable is dedicated to conserving water and other natural resources while helping independent rental owners get more from their investments. To learn more about Livable’s innovative cost recovery solutions and educational initiatives for residents, visit livable.com/apn.
Can Sellers Reduce Costs by Avoiding Buyer’s Agent Commission?
By Mercedes Shaffer, Realtor
The real estate landscape is changing, especially for sellers looking to save on commission fees. With recent NAR legal settlements reshaping the way brokers get paid, it’s time to take a closer look at how you, as a seller, can manage your costs while still attracting motivated buyers. This shift is especially relevant for multifamily property owners who want to understand whether offering buyer agent commissions is still necessary—or if you can skip it altogether.
NO MORE BUYER AGENT COMMISSIONS ON THE MLS
In the historical implementation of the Broker-toBroker cooperation process, the Listing Broker would advertise the commission offered to the Buyer Broker on the MLS. Under the new rules, commissions offered to Buyer Agents can no longer be advertised on the MLS. In fact, the MLS must remove any fields or data relating to buyer agent compensation and there can be absolutely NO reference to buyer’s agent commission even in the agent-to-agent private remarks.
ADVERTISING BUYER AGENT COMMISSIONS ELSEWHERE
Even though MLS listings can no longer show Buyer Agent commissions, agents can still advertise if the seller is offering a buyer’s agent commission in other places such as flyers, post cards, lawn signs, open houses, property websites, social media, and various other platforms. The key is that it’s not on the MLS or any other IDX-based system.
BUYER REPRESENTATION AGREEMENTS
The new rules make buyer representation agreements mandatory before any property tours. In California, this hasn’t historically been a requirement, but going forward, real estate professionals working with potential buyers will be required before touring a property to enter into a written agreement that clearly discloses the details of the compensation that will be received. The amount of compensation specified must be objectively ascertainable and cannot be open-ended. In multifamily transactions, this change may not be as relevant, since showings usually occur after an offer is accepted and all the terms have already been agreed
upon, however, it does add a layer of formality that could impact negotiations.
HOW BUYER AGENTS ARE COMPENSATED
Here’s a breakdown of how Buyer agents can still get paid under the new model:
1. Seller Pays: Sellers can still choose to offer compensation to the Buyer’s Agent, but it’s no longer advertised in the MLS.
2. Buyer Pays: Buyers can pay their agent directly.
3. Combination: Sellers and Buyers can agree to share in the cost.
4. Concessions: Sellers can offer concessions to the Buyer, like closing credit, which can then be used by the Buyer to pay their agent. In this case, the Seller indirectly funds the Buyer’s agent fee, but through a different mechanism.
CAN A BUYER REPRESENT THEMSELVES
A buyer can absolutely represent themselves, and one advantage is that it can reduce the overall transaction cost by lowering commission expenses. However, there are some risks. The buyer will be responsible for every aspect of their side of the transaction, including completing all the paperwork, which could result in errors, revisions, and delays. This increases the chances of misunderstandings and can create legal and liability concerns if critical timelines or obligations are missed,
potentially leading to disputes, contract breaches, and even the deal falling out of escrow. Therefore, if a seller accepts an offer from a self-represented buyer, they should do their best to try to ensure the buyer is capable of handling the transaction and closing on time.
PROS OF OFFERING A BUYER AGENT COMMISSION
One advantage of offering a Buyer Agent commission is that it can help attract more buyers. Many buyers are already financially stretched with needing to come up with a large down payment along with lender requirements to keep cash reserves, so they often can’t afford to pay their agent’s commission, which is one of the reasons why historically the buyer’s agent’s commission has come out of the seller’s proceeds. So while offering a Buyer Agent commission can be beneficial, sellers now have more opportunities to negotiate and customize the commission structure according to the market and the specifics of the transaction.
THE BOTTOM LINE
With the new rules, sellers now have more clarity when deciding whether or not to pay buyer’s agent commissions. While skipping this fee might save you money upfront, it could limit your pool of buyers, which may affect your overall net proceeds. If your goal is to reach as many qualified buyers as possible, offering a commission might still be worth considering. However, in a hot market, it could be worth rethinking how much of that fee really needs to come out of your pocket.
2024 Winners
INDUSTRY ACHIEVEMENT AWARD
Aiesha Blevins, Greystar
NANCY ROBERTSON AWARD
Denise Thompson, Western Towing
NEXTGEN LEADERSHIP AWARD
Alicia Banister, Flats LLC
PRESIDENT’S AWARD
Erin Kuehn, Legacy Apartment Staffing
ASSISTANT PROPERTY MANAGER OF THE YEAR 1-100 UNITS
First Place: Ebony Rabsatt, H.G. Fenton Company
ASSISTANT PROPERTY MANAGER OF THE YEAR 101-300 UNITS
First Place: Casey Gonzales, Cameron Brothers Company, LLC
Second Place: Victor Rivera, FPI Management
Third Place: Eric Lindsey, Greystar
ASSISTANT PROPERTY MANAGER OF THE YEAR 301+ UNITS
First Place: Michelle Menne, American Assets Trust, Inc.
Second Place: Christopher Stalter, H.G. Fenton Company
Third Place: Isabella Ruiz, H.G. Fenton Company
COMMUNITY RELATIONS MANAGER OF THE YEAR 1-300 UNITS
First Place: Jasmine Ruiz, Sudberry Properties, Inc.
Second Place: Addie Pinomesa, Urban Coast Properties, Inc.
INDUSTRY PARTNER OF THE YEAR COMPANY
First Place: Cox Communities, Cox Communities
INDUSTRY PARTNER OF THE YEAR INDIVIDUAL
First Place: Ramona Chavez, Legacy Apartment Staffing
LEASING PROFESSIONAL OF THE YEAR 1-100 UNITS
First Place: Ashleigh Huntington, H.G. Fenton Company
Second Place: Celeste Hernandez, Buchanan Property Management Corp.
LEASING PROFESSIONAL OF THE YEAR 101-300 UNITS
First Place: Taylor David, Flats LLC
Second Place: Braden Ingraham, H.G. Fenton Company
Second Place: Hayley Lewis, Greystar
Third Place: Alexandria Peralta, Sudberry Properties, Inc.
LEASING PROFESSIONAL OF THE YEAR 301+ UNITS
First Place: Tony Garcia, Greystar
Second Place: Stephen Murphy, H.G. Fenton Company
Second Place: Esperanza Ojeda, H.G. Fenton Company
Third Place: Devin Fragoso, Urban Coast Properties, Inc.
MAINTENANCE SUPERVISOR OF THE YEAR 1-300 UNITS
First Place: Roger Mendoza, H.G. Fenton Company
Second Place: Jonathan Villa, American Assets Trust, Inc.
Third Place: Edwin Bahena, H.G. Fenton Company
MAINTENANCE SUPERVISOR OF THE YEAR 301+ UNITS
First Place: Mario Arzate, H.G. Fenton Company
MAINTENANCE TECHNICIAN OF THE YEAR 301+ UNITS
First Place: Juan Vargas, H.G. Fenton Company
Second Place: Salvador Gomez, H.G. Fenton Company
Second Place: Gama Rendon, H.G. Fenton Company
Second Place: Omar Arzate, H.G. Fenton Company
Third Place: Narciso Corona, Sudberry Properties, Inc.
MAINTENANCE TECHNICIAN OF THE YEAR 1-300 UNITS
First Place: Adrian Martinez, Sudberry Properties, Inc.
Second Place: Armando Aguirre, FPI Management
Third Place: Saul Correa Vargas, H.G. Fenton Company
Third Place: Victor Guerrero, H.G. Fenton Company
MULTI-SITE MANAGER OF THE YEAR 1-300 UNITS
First Place: Kalani Brinkoetter, H.G. Fenton Company
Second Place: Jessica Rodriguez, Sunrise Management Company AMO
Third Place: Jamika Hunt, Cameron Brothers Company, LLC
MULTI-SITE MANAGER OF THE YEAR 301+ UNITS
First Place: Isaac Sterman, H.G. Fenton Company
Second Place: Johnny Montes, Cameron Brothers Company, LLC
PORTER OF THE YEAR 1-300 UNITS
First Place: Maria Avitia, H.G. Fenton Company
Second Place: Rocio Rodriguez Tapia, Sunrise Management Company AMO
Third Place: Amanda Freeman, FPI Management PORTER OF THE YEAR 301+ UNITS
First Place: Corin Languren, American Assets Trust, Inc.
Second Place: Maria Rosales, Cameron Brothers Company, LLC
Third Place: Guillermo Lugo, H.G. Fenton Company
PROPERTY MANAGEMENT COMPANY OF THE YEAR
First Place: Urban Coast Properties, PROPERTY MANAGER OF THE YEAR 1-100 UNITS
First Place: David Valdez, Sunrise Management Company AMO
Second Place: Brian Braden, Greystar
Third Place: Gabriela Diaz, Sunrise Management Company AMO PROPERTY MANAGER OF THE YEAR 101-300 UNITS
First Place: Jackie Casaletto, H.G. Fenton Company
Second Place: Alicia Banister, Flats LLC
Third Place: Dannika Condon, H.G. Fenton Company
Third Place: Jon Perea, CPM, ARM, Sunrise Management Company AMO PROPERTY MANAGER OF THE YEAR 301+ UNITS
First Place: Yesenia Escalante, FPI Managment
Second Place: Jose Soto, H.G. Fenton Company
Third Place: Andrea Alexander, Greystar PROPERTY OF THE YEAR 1-29 UNITS
First Place: Loma 21, American Assets Trust, Inc.
Second Place: Santa Fe RV Park, American Assets Trust, Inc.
PROPERTY OF THE YEAR 30-100 UNITS
First Place: Bella Del Mar, H.G. Fenton Company
Second Place: TRU Bankers Hill, H.G. Fenton Company
Third Place: The Warwick, Sunrise Management Company AMO
PROPERTY OF THE YEAR 101-300 UNITS
First Place: The Nash, Flats LLC
Second Place: BLVD North Park, H.G. Fenton Company
Third Place: Aquatera Apartment Homes, H.G. Fenton Company
PROPERTY OF THE YEAR 301+ UNITS
First Place: Pacific Ridge Apartments, American Assets Trust, Inc.
Second Place: Circa 37, Sudberry Properties, Inc.
Third Place: Tierrasanta Ridge, H.G. Fenton Company
REPOSITIONED PROPERTY OF THE YEAR 1-300 UNITS
First Place: Softwind Point Apartments, Greystar
34th Annual Apartment Perspective Recap: “Finding Opportunity During
The Southern California Rental Housing Association (SCRHA), in partnership with the CCIM Institute San Diego Chapter, held the 34th Annual Apartment Perspective at the Marriott Mission Valley on October 17, 2024. The event brought together an economist and industry leaders to discuss the current real estate market and provide insights on future investment opportunities, focusing on how San Diego’s rental housing market is positioned for long-term success.
The overall message from the panel was optimistic: San Diego rental housing remains a prime opportunity for investment over the next 30 years, despite the challenges posed by interest rates, market corrections and changing tenant laws. The panel was moderated by Robert Vallera, CCIM, Partner, Voit Real Estate Services.
POSITIVE OUTLOOK FOR SAN DIEGO’S RENTAL MARKET
The panel emphasized that while the current market faces headwinds, such as relatively high interest rates, San Diego’s fundamentals remain strong. Jeff Gleiberman of MG Properties, which owns nearly 32,000 housing units in six states, said that about 4,000 of those units are in San Diego. He highlighted the strength of San Diego’s rental market:
a Market Correction”
“This has been our best-performing market throughout our time in business. We feel very good about the apartment market in San Diego and the rest of the West Coast.”
While some markets have experienced significant oversupply, Gleiberman noted that San Diego is better positioned due to the limited amount of new construction coming online. This sets the stage for rent growth and increased occupancy in the coming years.
Renting is a better option than purchasing a home for many cash-strapped people because owning a home is 1.7 times as expensive as renting, he said.
OPPORTUNITIES IN A SHIFTING MARKET
According to Chuck Hoffman of ACI Investments, market corrections are not obstacles but opportunities for strategic investment. Showing images of old newspaper clips, he took a trip down memory lane to put the current market in perspective. He reflected on how San Diego has survived many changes since the 1980s and 1990s, such as the contraction of the aerospace industry and the rise of biotech.
“What do you do in times like this? You look for opportunities—because opportunities are always there.”
Please
One example, he said, was when his firm began pursuing 1031 tax-deferred exchanges before they were widely used. These are now an important wealth-building tool for many people, he said.
Hoffman stressed that San Diego’s evolving economic landscape, with its growing biotech sector and younger demographics, presents exciting longterm investment prospects.
The moderator, Robert Vallera, echoed Hoffman’s historical perspective, reflecting on the tumultuous world of rental housing in the 1990s. He urged attendees to put the current correction into perspective, think long-term, and focus on the upside of a changing market over the next 30 years.
INVESTMENT STRATEGIES AND TRENDS TO WATCH
Nathan Moeder of London Moeder Advisors discussed long-term trends affecting the rental market, such as increased demand for multi-bedroom units to accommodate families and the limited availability of housing in San Diego.
Unfortunately, Moeder said, governments are not paying enough attention to the need for family housing such as single-family homes, focusing more on permitting of multifamily projects with affordable housing.
“IT’S NOT A HOUSING CRISIS… IT’S A HOUSING POLICY CRISIS.”
Moeder advised investors to focus on “wellamenitized” neighborhoods with strong quality of life factors. He also pointed out emerging areas like Oceanside, Vista, and San Marcos as new investment opportunities, while predicting that Chula Vista and National City will likely attract more attention as South Bay continues to develop.
He also noted the urban core, beach areas, and transformative mixed-use projects like One Paseo and North City as future hotspots for investment.
Panelists stressed that as high construction costs and regulatory burdens reduce new housing starts in the short term, existing multifamily properties will benefit.
CHALLENGES AHEAD: RENT CONTROL AND PROPOSITION 33
A significant concern raised at the event was Proposition 33, which would repeal the CostaHawkins Rental Housing Act and allow local rent control across California. Alan Pentico, Executive Director of SCRHA, warned of the risks:
“Prop 33 brings in the most egregious forms of rent control… Every jurisdiction in the state would set up its own rent review board. You’ll see reduced property values, stunted growth and horrific dilapidation of the properties.”
Pentico emphasized the importance of opposing Proposition 33, which could discourage investment. He urged attendees to stay engaged in advocacy efforts to protect the future of the rental housing market.
The event concluded on an optimistic note: while the current market correction presents challenges, San Diego remains an attractive place for long-term real estate investment.
The Apartment Perspective event provided SCRHA members with valuable updates on market trends, forecasts, and strategic advice for staying ahead. We thank all the panelists for highlighting opportunities and challenges in San Diego’s ever-evolving rental housing landscape.
SAN DIEGO EARTHQUAKE RISKS AND THE IMPORTANCE OF THE 2024 SHAKEOUT DRILL
by Ali Sahabi, Optimum Seismic
In November 2024, earthquake preparedness remains a critical focus for San Diego due to the region’s significant seismic risks. While the city is known for its mild climate and picturesque coastline, it sits near several major fault lines, making it vulnerable to potentially destructive earthquakes. As part of ongoing efforts to raise awareness and preparedness, millions of Californians, including San Diegans, participated in the Great California ShakeOut on October 17, 2024. This annual statewide event, designed to educate the public about earthquake safety, featured an exciting addition in San Diego—a 7.0 magnitude earthquake simulator, giving participants a chance to experience the intensity of a major quake firsthand.
In 2023, as part of the same ShakeOut event, the California Office of Emergency Services (Cal OES) brought a similar simulator to Cuyamaca College, where participants could safely feel what a 7.0 earthquake would be like. On October 19, 2023, millions of Californians practiced life-saving actions like “Drop, Cover, and Hold On” at 10:19 a.m. The simulator provided a vivid, safe way for participants to understand the power of such a significant quake and reinforced the need for earthquake readiness in San Diego.
EARTHQUAKE RISKS IN SAN DIEGO
San Diego faces considerable earthquake risks due to its proximity to both the San Andreas Fault and the Rose Canyon Fault. The San Andreas Fault, running through California, poses a significant threat to the entire state, including Southern California. Though San Diego lies farther from this fault, a major rupture would send tremors across the region, potentially causing widespread damage.
The more immediate danger for San Diego, however, comes from the Rose Canyon Fault, which runs through downtown. Experts have warned that this fault is capable of producing an earthquake as powerful as a magnitude 7.0. Should this occur, it could cause severe damage to critical infrastructure, buildings, and roads, especially in highly urbanized areas. Given the potential for such an event, it’s vital for San Diegans to understand the risks and take steps to prepare.
Adding to these risks, parts of San Diego, such as Mission Valley and areas with soft soil, are prone to liquefaction—a process where the ground loses stability and behaves like a liquid during intense shaking. This could result in the collapse of buildings and other structures, leading to even greater devastation.
PREPAREDNESS
On October 17, 2024, millions across California participated in the annual Great California ShakeOut, including thousands in San Diego. At precisely 10:19 a.m., participants practiced the “Drop, Cover, and Hold On” technique, designed to protect individuals from falling debris during an earthquake. This simple action can save lives in the event of a major quake.
The 7.0 magnitude earthquake simulator in San Diego was a key part of this year’s event. It allowed residents to safely experience the shaking and intensity of a large earthquake, a vivid reminder of the potential risks in the area. In 2023, a similar simulator was brought to Cuyamaca College, where first responders also provided earthquake preparedness tips. Cal OES Director Nancy Ward emphasized the importance of taking proactive steps to protect oneself and loved ones, saying, “During this year’s Great ShakeOut, we encouraged every Californian to take action to keep themselves and their families safe.”
BUILDING RESILIENCE IN SAN DIEGO
While the simulator provided a stark reminder of the risks associated with earthquakes, it also underscored the importance of being prepared. San Diego’s growing population and urban development make it even more essential to focus on earthquake resilience. Retrofitting older buildings, particularly in areas prone to liquefaction, is crucial to reduce the potential damage from a major quake.
Emergency preparedness goes beyond the ShakeOut drill. Having an emergency plan, securing heavy furniture, and understanding local risks are all vital steps San Diegans must take. For those who experienced the simulator, the powerful shaking of a simulated 7.0 earthquake highlighted just how crucial these preparations can be.
CONCLUSION
The 2024 Great California ShakeOut was a timely reminder of the earthquake risks that San Diego faces. The participation of millions of Californians, coupled with the 7.0 magnitude earthquake simulator, reinforced the importance of earthquake preparedness. With the Rose Canyon Fault posing a significant threat to the region, it’s vital for residents to remain vigilant, continue practicing safety measures like “Drop, Cover, and Hold On,” and take proactive steps to protect themselves and their families.
San Diego may not experience frequent large earthquakes, but the risks remain ever-present. By participating in drills like the ShakeOut and staying prepared, the community can enhance its resilience and be better equipped to face future seismic events.
SOURCE: “Experience a 7.0 magnitude earthquake with a simulator in San Diego on ShakeOut Day 2023”
The Optimum Seismic team has been making California cities safer since 1984 by providing full-service earthquake engineering, steel fabrication and construction services for multifamily residential, commercial and industrial buildings. With more than 4,000 earthquake retrofit and renovation projects completed, Optimum Seismic’s work includes softstory multifamily apartments, tilt-up, non-ductile concrete, steel moment frame and unreinforced masonry (URM) buildings. To arrange a complimentary assessment of your building’s earthquake resilience, contact Optimum Seismic at (833) 978-7664 or visit optimumseismic.com.
BOWLING Tournament
Thanks to everyone who came out for the NextGen Bowling Tournament on October 23, 2024! We had a great time.
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Energy Audits:
How Property Managers Can Save On Utility Bills
by Max glassburg, Yardi breeze
What is an energy audit? It’s not exactly a new concept. People involved with building and building energy efficiency have been doing them for over 40 years. They started in earnest in the late 1970s and early 80s, stemming from the cost and energy strains of the oil embargoes and energy crisis of the 1970s.
Auditors started looking at HVAC systems, lighting systems, water heating systems, cooking systems and the building envelope. Over the past 40 years, the process has become increasingly refined. There are now certified professionals you can call to survey buildings and properties and identify opportunities for energy savings.
In this article, we’ll cover what property managers need to know about energy audits to save on utility bills. You’ll also see what we’re doing with energy use
data to make saving money faster and easier. If you’re looking to save on your bills and could benefit from leading energy solutions for property owners and managers, this article is for you.
LEVELS OF ENERGY AUDITS
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) sets standards for building-related matters, including how to conduct an energy audit. If a property manager or owner says they need an energy audit, they can expect one of three types: ASHRAE Levels 1, 2 or 3.
A Level 1 audit is a cursory look, often called a “treasure hunt.” Certified professionals walk through a property and quickly identify opportunities for improvement without doing a deep dive into analytics. They might suggest replacing old incandescent or fluorescent lighting with LED lights, upgrading inefficient heating and air conditioning systems or
addressing issues with single-pane windows or better door seals.
A Level 2 audit involves a deeper dive. It includes everything in a Level 1 audit plus more detailed analytics. For example, the auditor might examine a heating and air conditioning system in greater detail, identifying more precise areas for improvement.
A Level 3 audit dives deeper still, and the analytics become extremely detailed and precise. For example, they might use SEER (Seasonal Energy Efficiency Ratio) or EER (Energy Efficiency Ratio) ratings to measure air conditioning efficiency. The higher the SEER/EER, the more efficient the system.
ENERGY STAR® BENCHMARKING & WHY IT MATTERS
Yardi offers a benchmarking service using the U.S. Environmental Protection Agency (EPA) ENERGY STAR Portfolio Manager. Here’s what that means for property management companies looking to save on utility bills.
If you’re a Yardi Breeze Premier client, you may be using our Yardi Utility Invoice Processing solution. This solution automates utility invoice processing to save our clients money and time, extracting your data for electric, gas, water and other metered utilities. The data is automatically entered into our Utility Invoice Processing system, and ENERGY STAR crunches the numbers. As a result, you see all the energy-related data you need to make informed decisions about your property.
ENERGY STAR scores properties on a scale of 1 to 100. A score of 100 means very energy efficient while 1 means not efficient at all. If you score 75 or higher, you qualify for ENERGY STAR certification. This can be used to market your property as one that will save renters money on energy. It also tells eco-conscious tenants that you care about the impact your property has on the environment.
HOW AN ENERGY AUDIT TAKES PLACE
We offer ENERGY STAR benchmarking and provide data to our clients. They, in turn, offer this data to professional engineers or certified individuals from an organization like the Association of Energy Engineers (AEE) who perform energy audits. AEE offers Certified Energy Auditor (CEA) and Certified Energy Manager (CEM) certifications, among others. Certified experts conduct the energy audit, analyze utility data and make recommendations.
For residential properties, there are the Building Performance Institute (BPI) and the Home Energy Rating System (HERS), which certify professionals to conduct site visits. They also analyze equipment, gather data and generate reports.
HOW A WATER AUDIT TAKES PLACE
Water audits are a bit different. They involve experts evaluating fixtures like aerators, showerheads and toilets, especially in drought-stressed areas like Phoenix or Los Angeles. The EPA’s WaterSense program sets standards for water efficiency with properties built since 1994.
WHAT GETS MEASURED IN AN ENERGY AUDIT?
In the U.S. and Canada, there are many energy-saving platforms that require use of the ENERGY STAR Portfolio Manager. These tools require buildings to input their attributes and metered monthly data such as kilowatt hours of electricity, therms of gas and gallons of water. Portfolio Manager compares your building against similar buildings in your area using this data.
INCENTIVES FOR ENERGY EFFICIENCY UPGRADES
Utilities sometimes offer rebate programs to incentivize efficiency upgrades like lighting retrofits. These rebates
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can lower the initial cost and shorten payback periods, making improvements more attractive to property owners. For example, the New York State Energy Research and Development Authority (NYSERDA) program sponsors contractors to conduct energy audits and may even provide certain technologies for free, including LED light bulbs or low-flow showerheads.
The federal government also supports these efforts through programs like the Weatherization Assistance Program (WAP), which provides funding for energy audits and improvements, especially for affordable housing. These programs help reduce energy and water consumption, lower costs for tenants and provide financial incentives to property owners.
ENERGY SAVINGS MAKE YOU MORE MARKETABLE
Properties with an ENERGY STAR certification can attract and retain tenants who prioritize energy efficiency. Clients have reported that tenants prefer properties with the ENERGY STAR certification because they expect lower energy and water bills, making these properties more desirable. The analytics provided by Yardi offer a clear path to making the improvements that tenants value.
ARE ENERGY AUDITS MANDATORY?
An energy audit may be mandatory, depending on a lot of factors. Under the ENERGY STAR scoring system, a rating of 50 is at the median for energy consumption. Half of the buildings in your peer group are more energy-consuming and half are less so.
In some cities, including Los Angeles, the process stops there as long as you certify and report to the city. For water, buildings that have already made water improvements in the last five years or have shown water reduction through progressive programs can be exempted from further requirements.
If you meet these criteria, you only need to certify every five years. If you don’t meet these criteria, a Level 2 energy audit and a Level 2 water audit may be required.
Yardi helps clients get the best possible ENERGY STAR score and recommends hiring an energy auditor if necessary. We provide all consumption data to the auditor. This collaborative approach helps identify the best savings opportunities. Ideally, after implementing improvements, the building’s efficiency will increase. This will allow it to achieve a higher score and potentially avoid repeated audits.
WHAT IF YOUR ENERGY BENCHMARK SCORE IS LOW, BUT AN ENERGY AUDIT ISN’T REQUIRED?
Even if not mandated, scoring below 50 suggests you should consider an energy audit. The audit can reveal potential savings and efficiency improvements. Often, the business case is compelling. For instance, LED lighting retrofits have become inexpensive, and many programs offer rebates leading to quick paybacks — typically three years or less.
WHAT DO PROPERTY MANAGERS NEED TO KNOW ABOUT YARDI ENERGY?
The most important reason to use our energy solutions is the seamless integration of all necessary benchmarking data.
It’s important to consider using our ENERGY STAR benchmarking service, especially if you’re a Yardi Breeze Premier client using Yardi Utility Invoice Processing. This service allows you to take the energy data we collect and put it into the ENERGY STAR Portfolio Manager program to score your property.
This benchmarking helps you understand how your property performs and identify areas for improvement. Financing
such as HUD’s green
Mac and Fannie Mae require an
ENERGY STAR score or energy audit for their funds. They believe good energy management correlates with high-quality property management.
We can also request whole building data from local utilities where required. This streamlines the process, making it easier to benchmark and manage your property’s energy efficiency.
RECAP: WHAT ANALYTICS CAN REVEAL TO PROPERTY MANAGERS
Energy and water usage trends: Get detailed data on energy and water usage. Property managers can easily spot trends and anomalies, helping to identify when and where consumption spikes occur.
Identifying inefficiencies: Data can highlight buildings that are less efficient compared to others in your portfolio. This insight allows you to prioritize problematic buildings for further investigation and improvement.
Cost savings opportunities: By pinpointing inefficiencies, the analytics can reveal opportunities to lower utility bills for tenants and reduce operating costs. This might include upgrading to more efficient systems or addressing specific issues like leaks or outdated equipment.
Course of action for energy audits: The analytics can help you decide whether an energy audit is necessary for certain properties. Rather than auditing every building, you can focus on those that the data indicates are underperforming.
Benchmarking against industry standards: Using tools like ENERGY STAR benchmarking, you can compare your properties’ performance to industry standards. This makes it easier to identify improvements and/or validate the effectiveness of your current energy management practices.
Using energy analytics, property managers can make informed decisions to enhance energy efficiency, reduce costs and improve tenant satisfaction. This targeted
approach ensures that you focus on the areas that need improvement while maintaining high-performing properties.
We’d like to thank Ray Segars for his contributions to this article. Ray is a Yardi Solutions Consultant who knows energy inside and out. He can also speak to energy-related best practices nationwide or in select regions. We appreciate his expertise!
Spotlight on Industry Achievement Winner Aiesha Blevins, Greystar
WHEN DID YOU FIRST START OUT IN THE INDUSTRY?
26 years ago (1998, if you must use the year…when did I get so old?)
WHERE DO YOU SEE THE INDUSTRY HEADING IN THREE TO FIVE YEARS?
In San Diego County, I would venture to agree that the multi-family housing industry is expected to experience growth and significant shifts over the next three to five years, driven by both regional trends and broader economic forces. From housing demands and the affordability crisis to sustainability and green development, with an increased focus on workforce housing, navigating luxury vs. middle-market development, and of course, navigating new zoning laws, policy changes, and legislative hurdles, there are many factors to consider. The future may revolve around balancing high demand with affordability challenges, while also incorporating sustainability and urban infill strategies. Policy changes, migration patterns, and technology will shape how developers respond to growing needs with an emphasis on building more affordable, workforce, and sustainable housing in the coming years.
WHAT DO YOU SEE AS THE BIGGEST CHALLENGE FACING THE INDUSTRY?
In my eyes, the biggest challenges facing the multifamily housing industry include the rising cost of construction and development along with the legislative restrictions, limiting our ability to be both profitable and escalating prices for materials, labor shortages, and regulatory hurdles, making it difficult
to maintain affordability while meeting demand. Additionally, the industry is constantly attempting to stay ahead of the preferences of residents, such as a heightened desire for more sustainable and amenity-rich living environments, while maintaining affordability. As for 2024, we are beginning to see economic fluctuations following the pandemic that affect occupancy rates and rental prices.
WHO ARE LOCAL PEERS THAT YOU ADMIRE AND WHO HAVE HELPED YOU GROW?
This is a difficult question. Being in a people-forward industry, I have been fortunate to encounter so many amazing people! That being said, I would have to highlight Allison Pfister, who fearlessly guides me on all things legislative; Seth Springman, who shares my passion for people, doesn’t see things simply as black and white, and strongly believes in doing what’s right; Abigail Rex, who reminds that even when afraid, to do it anyway; and Dominique Montoya, who reminds me that we have each other for accountability and to help one another, we don’t have to go it alone.
WHAT ACCOMPLISHMENT MAKES YOU MOST PROUD?
My ability to develop and guide the career of those who will come after me.
WHAT MOTIVATES YOU TO COME BACK EVERY DAY, READY TO DO MORE?
The people I get to work with and the positive impact that we are making as housing providers.
Financial advisory Easier 1031 Loan Replacement with Partial Interest Properties
BY CHRISTOPHER MILLER, MBA SPECIALIZED WEALTH MANAGEMENT
Most of my real estate advisory clients are completing 1031 Exchanges and need to replace debt in order to effect a completely tax-deferred (potentially forever) 1031 Exchange. Sometimes applying for and securing a new loan can be a laborious process. Partial Interest properties represent an alternate way to secure financing. We will explore this topic in depth this month.
WHAT IS DEBT REPLACEMENT IN A 1031 EXCHANGE?
A 1031 Exchange investor, in order to achieve a completely tax deferred exchange, must replace all of the equity received and all of the loan paid off from his sale. Let’s say our investor sold his property, after expenses, for $1 million and paid off a $400,000 loan at the time of sale, leaving him with $600,000 of equity in his exchange accommodator account. To defer all taxes from this sale, he must spend $600,000 of equity on a new property and assume a loan of at least $400,000. Any unspent equity or “un-replaced” debt will be considered “taxable boot” by the IRS.
SOMETIMES LOANS CAN BE TOUGH TO GET
Sometimes high interest rates and high purchase prices (like we are seeing today) can unfavorably skew debt service coverage ratios, making it difficult to qualify for the amount of loan an investor may need. Other times an investor is selling a smaller property in his portfolio and doesn’t feel up to the lengthy time and energy consuming process that applying and qualifying for loans entails. Partial interest properties, with their in-place permanent financing, can be a solution for these investors.
LOANS ON PARTIAL INTEREST PROPERTIES ARE TURN-KEY
With a partial interest property a management company will buy, for example, a 300-unit apartment property in Dallas or a CVS Pharmacy in the Atlanta suburbs. The manager will then arrange a permanent loan for the property and sell the equity portion of the building to investors. An investor putting up 1% of the equity will get credit for 1% of the loan and therefore buy 1% of the property. Because this is a non-recourse loan; the loan is to the property and not the investor – so no personal information, tax returns, or lengthy loan-closing signature packages
Christopher Miller is a Managing Director with Specialized Wealth Management and specializes in tax-advantaged investments including 1031 replacement properties. Chris’ real estate experience includes work in commercial appraisal, in institutional acquisitions for a national real estate syndicator and as an advisor helping clients through over five hundred twenty-five 1031 Exchanges. Chris has been featured as an expert in several industry publications and on television and earned an undergraduate business degree and an MBA emphasizing Real Estate Finance from the University of Southern California. Chris began his real estate career in 1998. Call him toll-free at (877) 313 – 1868.
are necessary. An investor can select a property on Monday, close by Friday and complete his exchange. He can start receiving his potential income immediately as well – as soon as the middle of the next month after closing.
HOW THIS WOULD WORK FOR OUR EXAMPLE INVESTOR
Our investor above, with $600,000 of equity and $400,000 of debt to replace, can purchase part of a $100 million apartment property in Dallas that is leveraged at 45%. This 45% figure represents a “loan to value” ratio that is most easily explained as the opposite of your down payment. (If I bought my first house with a 20% down payment, that means the other 80% was bought with a loan – for an 80% loan to value ratio.) So these Dallas apartments cost $100 million and include a $45 million permanent loan.
My client’s $600,000 equity investment would also include $490,909 of debt, which gives a total of $1,090,909 of property purchased. ($600,000 / (1-.45)) Since this exceeds the required numbers above, our investor has completed a completely tax-deferred (potentially forever) 1031 Exchange. Additionally; since he, by using the loan he was given credit for, bought $90,909 more property than he “needed” – the IRS will call this “new basis” that he can start taking full depreciation deductions on.
“OFF BALANCE SHEET” LOANS THAT WON’T AFFECT YOUR ACCESS TO CREDIT IN THE FUTURE
As mentioned earlier, the loans on the partial interest properties I deal with are all fixed-rate and nonrecourse. Non-recourse means that, in a worst-case foreclosure scenario, the lender’s only recourse to a default is the property itself. If they loaned $30 million on a property and could only sell it for $20 million, then they lose that $10 million – that’s part of the deal. Therefore, since a partial interest investor isn’t “on the hook” for that outstanding loan amount, it won’t appear on his credit report, doesn’t need to be included on his balance sheet and won’t affect his access to more credit. (In case he would like to buy more real estate in the future with credit.)
For almost 25 years, my clients have used partial interest properties as an easier way to replace debt in their 1031 Exchanges. Could a partial interest property help you? Can my office at (877) 313-1868 to learn more.
Landlord Legal Questions &Answers
by Kimball, Tirey & St. John LLP
Question: A new tenant signed a six-month lease. Now, he claims he feels unsafe because of an incident at the property and wants to terminate the lease. The tenant claims he has a 72-hour period to rescind the lease after it is executed. Is this true?
Answer: There is no 72-hour right of rescission for residential leases. Depending on the facts of the incident, there may be grounds to terminate based upon domestic violence laws.
Question: Is there a law on the length of time a resident must reside in an apartment not to be charged for paint or carpet when they move out? What are the guidelines?
Answer: No, the tenant can always be charged for painting or carpet cleaning and/or replacement that is beyond ordinary wear and tear. They would be only charged for the remaining useful life of the item and again only if the damage is beyond normal wear and tear.
AQuestion: Are the laws any different between “motels” and “apartments”?
nswer: If you operate a motel, consult with an attorney or the California Hotel & Lodging Association regarding applicable laws. Under Civil Code §1940, many landlord tenant laws (specified in Civil Code §§1940-1954.05) don’t apply
to short term renters (30 days or less) or to hotel and motel residents if certain conditions are met.
Question: We have a one-year lease with a tenant that will expire in four months. If we sell the house now, and the buyer wants to move in, would we be able to break the lease?
Answer: No, the buyer “steps into the shoes” of the seller and the lease is binding upon the new owner.
Question: Is the procedure for evicting a tenant from a garage any different than for a tenant who lives in a residential unit? Is delivering a notice to a post office box legally acceptable?
Answer: A notice of termination of a month-tomonth tenancy may be given by 1) personal service, or 2) posting on the property and mailing a second copy, normal mail the same day. 3) substituted service by delivery to someone of suitable age and discretion and mailing a second copy, normal mail the same day, or 4) by certified or registered mail which method adds five days to the notice period. Because no one “lives” at the garage, and because the garage may not have its own post office address and service, you may wish to utilize additional service methods and/or alternate addresses to increase the chances that the notice will be received by the tenant.
AQuestion: Is there any way to impose a rent increase on tenants with a lease or do you have to wait until the lease is expired?
nswer: You have to wait until the lease expires unless the lease specifies a specific rent increase during the term.
Question: I have a tenant who has been late with the rent on a number of occasions. I charge him a late fee and he pays it. When his lease expires, do I have to renew?
Answer: Consult with an attorney. There can be multiple layers of analysis necessary to determine whether the tenancy can be terminated. Many just cause jurisdictions do not permit a termination of tenancy just because the lease expires.
Question: We want to give notice to vacate to a renter of a garage who has been in occupancy for over one year. Can we give a thirty-day notice or does the sixty-day notice rule apply for garages as well?
Answer: You can give a thirty-day notice. Sixtyday notices are only required for residential property when the tenant has been in possession for one year or longer and the rental agreement is month-to-month.
Question: I have been asked by another property manager if a former tenant of mine caused any problems and if I would rent to him again. I suspected that he was a drug dealer or
at least a drug user but I cannot prove it. What can I tell her?
Answer: If you are unsure, you should remain silent. From a legal point of view, it is always safest to say nothing. However, if you choose to do so, you should only reveal information, if any, that you know to be true and can be documented. When making a recommendation, you are always running the risk that the person you are referring to believes you are defaming their good name. Making timely notes of what you said and who you spoke to, will be valuable if you are questioned about the conversation in the future. Discuss only facts that pertain to compliance with your lease or rental agreement.
Question: A tenant of three years recently vacated with only a verbal two-week notice. Can she be charged for unpaid rent? She did not have a lease agreement and never signed anything stating that she would give a thirty-day notice.
Answer: If the rent is paid monthly and there is no term stated in the lease, written or verbal, the law presumes you are under a month-tomonth agreement which requires a thirty-day written notice to terminate. If no written notice was given, the former tenant owes rent up to thirty days minus any amounts that can be collected from a replacement tenant (and you must make reasonable efforts to find a replacement tenant).
What California Short-Term Rental Hosts Need to Know about Balcony Inspections?
By Omid Ghanadiof, Founder of DrBalcony Engineering Tech
SHORT-TERM RENTALS VIA AIRBNB AND VRBO BALCONY INSPECTION COMPLIANCE
The California dream: It’s a vision of sundrenched beaches, rolling vineyards, bustling cityscapes, and the promise of endless possibilities. As an Airbnb or VRBO host in the Golden State, you’re not just offering a place to stay; you’re curating an experience, a slice of that coveted California lifestyle. And often, a balcony with breathtaking views is the jewel in the crown of your listing, the feature that sets your property apart and draws guests in.
But let’s not forget that amidst the allure of outdoor living, safety remains paramount. Balconies, while offering a delightful vantage point, also present potential risks if not meticulously maintained and
inspected. The tragic balcony collapse in Berkeley serves as a sobering reminder of the consequences of neglecting these vital structures. In response to such tragedies, California enacted stringent balcony inspection laws – Senate Bill 721 (SB 721) and Senate Bill 326 (SB 326) – to safeguard residents and visitors from potential hazards. These laws, while primarily targeting multi-family dwellings, cast a wide net that also encompasses many short-term rentals.
As a host, understanding and adhering to these regulations is not merely a legal obligation; it’s a fundamental aspect of responsible hosting and ensuring the well-being of your guests. Navigating the intricacies of these laws, scheduling inspections, and addressing any necessary repairs can be daunting, especially when juggling the demands of managing a successful Airbnb or VRBO.
This comprehensive guide aims to empower shortterm rental hosts with the knowledge and tools needed to navigate California’s balcony inspection landscape. We’ll delve into the specific requirements of SB 721 and SB 326, explore the unique challenges faced by hosts, and provide practical tips for ensuring compliance and creating a safe and enjoyable balcony experience for your guests. Join us as we unravel the complexities of balcony inspections, empowering you to host with confidence and provide your guests with a truly unforgettable California experience.
UNDERSTANDING CALIFORNIA’S BALCONY INSPECTION LAWS: SB 721 AND SB 326
California’s commitment to balcony safety is reflected in its robust legislative framework. Two key laws, SB 721 and SB 326, mandate regular inspections of balconies and other exterior elevated elements (EEEs) in multi-family dwellings. While these laws primarily target apartment buildings and condominiums, their implications for Airbnb hosts are equally significant.
• SB 721: A Focus on Apartments and MultiFamily Buildings: Enacted in 2018, SB 721 specifically addresses exterior elevated elements (EEEs) in buildings with three or more units. EEEs include balconies, decks, stairs, walkways, and any other exterior structure elevated six feet or more above ground level and designed for human occupancy or use. Even if you’re renting out a single unit within a larger building, your balcony could fall under SB 721 if the building itself meets the criteria.
• SB 326: Broader Scope for Condominiums and HOAs: Passed in 2019, SB 326 expands the reach of balcony inspections to include all condominium associations and common interest developments, regardless of the number of units. This law mandates inspections of all EEEs, regardless of construction material, placing a greater emphasis on comprehensive assessments.
KEY INSPECTION REQUIREMENTS UNDER SENATE BILLS 721 AND 326
Both state laws share certain core requirements:
● Qualified Inspectors: Inspections must be conducted by licensed professionals, such as architects, structural engineers, or certified building inspectors, who possess the
expertise to identify potential safety hazards and structural deficiencies.
● Inspection Frequency: The frequency of inspections varies depending on the law and the type of construction. Generally, inspections are required every six or nine years, with the first deadline for both SB 326 and SB 721 being January 1, 2025.
● Comprehensive Assessment: Inspections encompass a thorough evaluation of the structural integrity of balconies and EEEs, including load-bearing components, waterproofing systems, railings, and other safety features.
● Detailed Reports: Following the inspection, a comprehensive report must be prepared, detailing the findings, identifying any necessary repairs, and providing recommendations for remediation.
NAVIGATING THE UNIQUE CHALLENGES FOR SHORT-TERM RENTAL HOSTS
While adhering to these regulations is imperative for all property owners, short-term rental hosts face additional complexities:
● Guest Turnover: The frequent turnover of guests in short-term rentals can make scheduling inspections logistically challenging. It’s important to plan and communicate effectively with your guests to ensure minimal disruption to their stay.
● Coordination with Property Managers or HOAs: If your short-term rental is within a larger building or complex, you’ll need to coordinate with the property manager or HOA to schedule inspections and address any necessary repairs. Maintaining open communication and collaborating effectively is crucial for compliance.
● Liability Concerns: Even if a balcony issue predates your ownership or is the result of faulty construction, you could still be held liable if a guest is injured. This underscores the importance of conducting thorough inspections and addressing any identified problems promptly.
PROACTIVE MEASURES FOR COMPLIANCE AND GUEST SAFETY
To ensure a safe and compliant short-term rental experience, it is suggested you take these proactive steps:
1. Understand the Laws: Thoroughly familiarize yourself with the specific requirements of SB 721 and SB 326, as applicable to your property. Consult with an expert or legal professional if you have any questions or uncertainties.
2. Schedule Inspections in Advance: Plan your inspections well in advance, taking into account your booking calendar and any peak seasons.
3. Communicate with Guests: Inform your guests about any upcoming inspections or maintenance work that might affect their stay. Set clear expectations and address any concerns they may have.
4. Choose a Reputable Inspection Company: Select an inspection company with expertise in California balcony laws and experience working with short-term rentals. Look for companies that offer flexible scheduling, detailed reports, and clear communication throughout the process.
5. Prioritize Maintenance: Regularly inspect your balcony for signs of wear and tear, such as cracks, loose railings, or water damage. Address any issues promptly to prevent them from escalating into more significant problems.
6. Maintain Open Communication with Building Management: If your Airbnb is part of a larger building, establish a good working relationship with the property manager or HOA. Keep them informed about your rental activities and collaborate on inspection and repair schedules.
At DrBalcony Engineering Tech, they understand the unique challenges faced by short-term rental (Airbnb, VRBO, etc.) hosts in California. They offer flexible scheduling options, rapid turnaround times on inspection reports, and expert guidance on navigating the complexities of SB 721 and SB 326 compliance. The author, Omid Ghanadiof, is the founder of DrBalcony Engineering Tech, a specialized engineering inspection firm located in California. For more information, contact office at (805) 312-8513 or
SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION -
A
All Points Real Estate
619.298.7724
AltaCima Apartment Homes ........... 858.565.8333
American Assets Trust, Inc. 858.350.2564
Arbor Terrace | Westlake Housing 619.293.3612
Arbors at California Oaks Apartment Homes 951.461.3264
