SF Apartment Magazine Jan2023

Cash Flow Analysis

Opinion of Value

Management Strategies

Market Trends

contents

APARTMENT SF

Features 20 Election Reflection

by CHARLEY GOSS 24 P’s & Q’s by DAVID SEMEL

SF APARTMENT magazine

San Francisco Apartment Association Office 265 Ivy Street

San Francisco, CA 94102

Tel 415-255-2288 Fax 415-255-1112

Email memberquestions@sfaa.org Web www.sfaa.org

SFAA Staff

Executive Director Janan New Deputy Director Vanessa Khaleel Education Specialist Stephanie Alonzo Government and Community Affairs Charley Goss Marketing Lara Kisich Member Services Gershay Castaneda Member Services Maria Shea Accountant Crystal Wang

SFAA Officers

President Chris Bricker Vice President Robert Link Treasurer Jim Hurley Secretary J.J. Panzer SFAA Directors

Eric Andresen, Honor Bulkley, Andre Ferrigno, David Gruber, Kent Mar, Neveo Mosser, J.J. Panzer, Bert Polacci, James Sangiacomo, Dave Wasserman, Paul Gaetani

VOLUME XXXV, NUMBER 1 JANUARY 2023

Published by San Francisco Apartment Association

Publisher Vanessa Khaleel

Editor Pam McElroy Art Director Jéna Safai Production Manager Cameron Shaw Tel 415-255-2288 Web www.sfaa.org

SF Apartment Magazine (ISSN 1539-8161) Periodicals Postage Paid at San Francisco, California and at additional mailing offices.

POSTMASTER: Send address changes to the SF APARTMENT MAGAZINE, 265 Ivy Street, San Francisco, CA 94102.

The SF Apartment Magazine is published monthly for $84 per year by the San Francisco Apartment Association (SFAA), 265 Ivy Street, San Francisco, CA 94102. The SF Apartment Magazine 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 the SF Apartment Magazine are those of the author and do not necessarily reflect the viewpoint of the SFAA or SF Apartment Magazine 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 the SFAA, express or implied, of the advertiser or any goods or services offered. Published monthly, the SF Apartment Magazine is distributed to the entire membership of the SFAA. The contents of this magazine may not be reproduced without permission. Publisher disclaims any liability for published articles. Printed by Printing Partners Copyright @2023 by SFAA.

Lease of Mind

The new 2023 SFAA Residential Tenancy Agreement is now available.

The new 2023 SFAA Residential Tenancy Agreement is now available for use, either as a downloadable version with or without form fields, as a printed form, or in a licensed version where the license holder may make changes such as inserting company information, customizing specific terms, or inputting other individual information. The 2023 version did not undergo any major revisions this year, so the packet is still a full 27 pages long once all the addenda are included.

Because of the length of the full Agreement, SFAA is really trying to encourage all members to switch to a digital format of the lease. SFAA will still provide a print version of the whole document, but the costs of producing the hard copy version have skyrocketed this year. If you are able, please plan to purchase and use a digital version.

One notable change was made to the 2023 version: that of moving the signature page to the end of the entire

document after all of the addenda. The reason for this placement, which comes after the incorporation of the mold and lead disclosures into the internal body of the lease document, is to ensure that residents are at least provided the opportunity to see, and to read, all the important addenda BEFORE signing the lease. This is particularly important because disclosure laws require that housing providers deliver several of these addenda in advance of the resident becoming bound by the terms of the Agreement.

In order to help ascertain that the resident has had the opportunity to read and review the entire agreement and addenda IN ADVANCE, the lease drafting committee has updated the acclamation clause that appears right above the signature block.

There are a few changes to the Agreement this year:

• A line was added under the “Other” heading in the top right box of the

first page. This inclusion allows for identification of what the “Other” charges might be.

• A new paragraph was inserted regarding subletting and use, further protecting housing providers from other potential uses or transfers of the unit.

• Several of you continue to have issues with residents understanding that changing light bulbs is a resident responsibility, so that maintenance requirement is now addressed within the Maintenance section.

• The most substantial changes were made to the Insurance section, which include defining the responsibilities for losses, what is or is not covered by insurance, and further spelling out the importance of residents maintaining their own Renters Insurance policies.

• The Attorney’s Fee section was also revised, better defining the rights and responsibilities of each party in any dispute while striving to discourage opportunistic abuses.

• There were also several spelling and editorial changes that were found and corrected, but none of them of a substantial nature. All in all, the update this year was relatively minor compared to changes of the past. But, as always, we highly recommend that you purchase and use the most recent version of the Agreement.

• SFAA members can pay to access, email, and print the SFAA Residential Tenancy Agreement online. Members are allotted the number of leases that are associated with their unit count. As a courtesy, SFAA has allowed an additional five copies in addition to the actual unit count on record.

The digital version of the lease (a benefit available to SFAA members only) can be accessed as follows:

• One-time use ($25): This will allow you 48 hours to complete the lease agreement online. If you need to access the lease after the 48 hours has expired, you will be able to renew the 48-hour subscription.

• Regular members can access the new lease for one year at varying pricing tiers: $200.00 for 1- 30 units; $250.00 for 31-100 units; and $325.00 for 100 units or more.

• Management companies can access the digital lease for $450 for one year.

If you have questions, contact Gershay@ sfaa.org or at 415-255-2288 x 117.

Fire Alarm Upgrade Deadline July 2023

By now, you’ve probably heard about the San Francisco fire alarm code section 1103.7.6.1, which was adopted in 2016. The entire process can take anywhere from two to four months, so if you haven’t started the process yet, don’t wait any longer.

Building owners of (R-2) residential buildings with three or more units with an existing building fire alarm system need to comply with sound level requirements for sleeping areas by July 2023. Alarm systems have to pass the “pillow test,” meaning the central fire alarm system must be loud enough for all residents to hear it from their bedroom (meeting a sound level of at least 75 dBA).

If this applies to you and you haven’t upgraded your fire alarm system, contact your existing fire alarm provider and see what they can do for you. They may already know what needs to be done and can help with your unique building. The alarm system professional you work with should consider whether or not you have electronic floor plans available, if there’s an elevator or sprinkler system in your building, or if you have construction or remodeling work planned.

For a list of SFAA-affiliated alarm system professionals, turn to page 46 of the member directory. For more information on the legislation and FAQs, visit sf-fire.org/308sleeping-area-fire-alarm-requirements

March 2023 Housing Inventory Deadline

A law passed by the City requires all property owners to provide certain information to the Rent Board about their residential properties each year. The reporting requirements apply to all residential units in San Francisco, including single-family homes, vacant units, and owner-occupied units. The law also created a new licensing requirement for San Francisco landlords. Property owners who report that a unit is tenant-occupied will receive a rent increase “license” that allows them to impose annual allowable and banked rent increases. Landlords who have not fulfilled their reporting requirements will not receive a license and will not be permitted to impose annual allowable and banked rent increases on a tenant until reporting is completed.

Owners of properties, with more than ten residential units were required to begin reporting on July 1, 2022, with updates required each March 1 thereafter. For all other residential properties, the reporting requirements begin on March 1, 2023, with updates required each March 1 thereafter. Property owners may report information about their units into the Rent Board’s website (sfrb.gov) to comply with the March 1, 2023 deadline.

Housing Element Package

San Francisco’s Housing Element Update (Update) has been in the works since mid2020, and the City is sprinting to adopt it before a January 2023 deadline that could open the door to Builder’s Remedy Projects and eventually a loss of state funding for affordable housing and transportation.

(See Exhibit D of the Planning Department’s Update: sfhousingelement.org/ november-11-2022-initiation-memo)

The Update’s primary focus is to spur residential construction to meet the

ANNUAL 2023-2024 RENT INCREASE

For rent-controlled units, annual allowable increase amount effective March 1, 2023, through February 29, 2024, is 3.6%. This amount is based on 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 6% as posted in November 2022 by the Bureau of Labor Statistics.

To calculate the dollar amount of the 3.6% annual rent increase, multiply the tenant’s base rent by .036. For example, if the tenant’s base rent is $2,000.00, the annual increase would be calculated as follows: $2,000.00 x .036 = $72.00. The tenant’s new base rent would be $2,072.00 ($2,000.00 + $72.00).

To learn more about the San Francisco Rent Board, call 415-2524602 or go to sfrb.org.

state-mandated RHNA target of 82,000 new homes over eight years and to shift more housing development—especially affordable housing—to transit corridors on the West Side.

However, through “conforming amendments” to other elements of the City’s General Plan, the City sets the stage for new restrictions on the conversion or displacement of existing Production, Distribution, and Repair (PDR) or Industrial uses. It also targets large institutions—one of the sectors where in-person activity tends to be higher in the era of hybrid work—for new development impact fees.

Two of these amendments are shown below. For each item, text from the existing General Plan is shown in plain text; proposed additions to the General Plan are underlined .

Fight or Flight

written by DEBRA L. CARLTON

Extreme tenant activists and some of their allies in the State Legislature attacked California’s rental housing industry with a deluge of anti-housingprovider bills this year. We’re happy to report, however, the wall held.

In 2022, the California Apartment Association (CAA) stopped nearly all antihousing-provider legislation introduced at the State Capitol. In most cases, however, the lawmakers behind those bills are raring to try again in 2023.

In the following paragraphs, I’ll review one especially troublesome bill becoming law next year, as well as a few others that rental property owners should know about.

I’ll also review some of the worst legislation that CAA stopped in Sacramento.

New Limits on Wage Garnishment

Perhaps the most controversial bill signed into law this year, SB 1477 by State Senator Bob Wieckowski (DFremont), will limit the use of wagegarnishment against debtors in no need of protection, including high-income earning tenants who refused to pay rent during the pandemic.

“Under this legislation, owners of rental housing—many of whom have gone more than two years without rent—would be limited in collecting their losses that accrued during the

pandemic,” said Tom Bannon, CAA’s Chief Executive Officer. “This includes back rent from wealthy tenants who fraudulently claimed COVID hardships.”

The legislation advanced to the Governor on a slim margin. Newsom signed the bill over the Association’s objections. Unlike most new laws, which will take effect January 1, 2023, SB 1477 will take effect September 1, 2023.

The bill raises the amount of income a debtor can earn and still be protected from wage garnishment. In some cases, the rental property owner can still collect unpaid rent using wage garnishment, however, the collection will take longer.

Domestic Violence Protections

SB 1017 by State Senator Susan Eggman (D-Stockton) creates additional protections for victims of domestic violence who live in rental housing.

Existing law already allowed victims to move out of rental housing to avoid their abuser and to terminate their lease early, fourteen days before written notice, without financial penalty.

Under SB 1017, if a tenant/defendant fights an eviction, the following two scenarios may result:

If the perpetrator of domestic violence does not reside in the same unit with the victim, the victim can file an answer

claiming they are protected and cannot be evicted so long as the victim does not invite the abuser back to the property.

If the perpetrator lives in the same unit, the court can order a partial eviction, allowing the victim to stay while the unlawful detainer action proceeds against the perpetrator.

The bill clarifies that the defendants can still be found guilty of an unlawful detainer on other grounds. Rental property owners can still proceed with an eviction if the perpetrator has threatened the safety of other residents or guests and the resident continues to voluntarily allow the perpetrator on the premises after a three-day notice served by the property owner on the resident, demanding that the resident stop the negative activity.

While the bill was substantially amended at CAA’s request, the Association continued to oppose it, arguing it would give perpetrators of domestic violence added protections that can harm the victim and other people at the property.

Reusable Credit Reports

AB 2559, by Assemblymember Christopher Ward (D-San Diego), will allow, with the rental housing owner’s authorization, prospective tenants to submit reusable credit reports when applying for rental housing.

Ward’s bill—signed by the Governor— aims to eliminate the need for prospective tenants to pay for separate credit checks every time they apply for a rental unit. Under AB 2559, prospective tenants will be able to buy a single credit report

CAA prevented a myriad of damaging proposals from becoming law in 2022.

for use when applying for housing at multiple properties. The reusable credit report will be good for 30 days.

At the behest of CAA, Ward clarified in his bill that the program will be voluntary on the property owner’s part. Further, the intent is that the credit reports would appear on a credible third-party website that rental owners can access at no cost.

Pets in Affordable Units

SB 971 by State Senator Josh Newman (DFullerton) adds to existing law by requiring that residents of some newly built affordable housing in California be allowed to own a common household pet.

The legislation—signed by the governor— will apply to new low-income housing funded by the California Department of Housing and Community Development (HCD) or the California Tax Credit Allocation Committee (TCAC).

Specifically, the law requires that beginning January 1, 2023, the HCD and TCAC authorize a resident of an HCD- or TCAC-funded housing development to own one or more common household pets within the resident’s dwelling unit, subject to applicable state laws and local ordinances related to public health, animal control, and animal anticruelty, and subject to other reasonable conditions. A common household pet includes domesticated animals, such as a dog or cat, that are kept in the home and not for commercial purposes.

Legislation Stopped by CAA

Below I review some of the worst legislation that CAA prevented from becoming law this year. However, many of the authors behind these bills have indicated they intend to bring these proposals back next year. And with the legislature potentially becoming more progressive following the November election, negative rental housing proposals will be more difficult to stop.

Energy Disclosure Bill

Under SB 1026 by State Senator Bob Wieckowski (D-Fremont), rental owners would have been required to provide a specific energy-efficiency rental unit disclosure form

to tenants before entering a rental agreement. The legislation would have directed the State Energy Resources Conservation and Development Commission to create the document.

The bill was modeled on a law created in the mid-2000s in Maine, where the weather and the apartment buildings differ substantially from those in California.

Cooling Mandate Fizzles

AB 2597 by Assemblymember Richard Bloom (D-Santa Monica) would have strained California’s aging power grid by requiring that rental property owners ensure their units are adequately cool for residents.

CAA contended that the bill circumvents California’s building code adoption process and ignores the variety of climates in California. The legislation also failed to consider the complexities of adding energy-efficient cooling systems to older buildings.

Rent Control and Taxes

At first, AB 1791 by Assemblymember Adrin Nazarian (D-North Hollywood) would have imposed a $500 excise tax on all residential property, including rental property. However, Nazarian amended the legislation after significant opposition.

As amended, AB 1791 would have authorized cities and counties to cap rent increases on single-family rentals, regardless of age, if owned by corporations with ten rental units or more and with a specified gross income.

At present, Costa-Hawkins protects housing—built after 1995—and all single-family homes from local rent control ordinances. The bill also overlooked existing safeguards for single-family renters under the California Tenant Protection Act of 2019, passed as AB 1482.

25% Tax on Rental Housing Sales

AB 1771 by Assemblymember Chris Ward (D-San Diego) would have levied a heavy tax on individuals who purchase rental housing and sell it within seven years. The anti-house-flipping legislation would have

created a 25% tax on the capital gain produced by the sale of residential property within three years of buying it. The tax rate would then have declined by 5% each year for seven years.

Year-Long Process to Sell Rental Housing

AB 2710 by Assemblymember Ash Kalra (D-San Jose) would have prohibited rental owners from putting their properties up for sale—whether apartments or single-family rentals—until they had given advance notice to “qualified entities,” such as tenant organizations, community land trusts, and affordable housing nonprofits. These qualified entities would have been granted one year to secure financing for the purchase of the property.

Rental Registry Proposal

AB 2469 by Assemblymember Buffy Wicks (D-Oakland) would have required owners to submit a rental registry form each year to the state Department of Housing and Community Development. The form would have required various data, such as the number of bedrooms and bathrooms in each unit, the number of and reasons for evictions, and the number of days units were vacant.

The bill would have required the state to publish this information on a public online rental registry portal. CAA stopped three prior rent-registry bills from the same author.

Bill Prohibiting Use of Credit Reports

AB 2527 by Assemblymember Sharon Quirk-Silva (D-Fullerton) would have prohibited rental property owners from asking potential tenants anything that would be included in a report, such as payment history or evictions.

Two additional credit report bills were stopped by CAA this year. AB 2203 by Assemblymember Luz Rivas (D-San Fernando) and SB 1335 by State Senator Susan Eggman (D-Stockton) would have prohibited rental property owners from accessing a credit report if the tenant applicant receives any form of government subsidy.

Build in the Blanks

written by BRETT GLADSTONE ESQ & BOYD MCSPARRAN ESQ.

equal to no less than one-third of the floor area of the largest unit on the lot.

New Dwelling Unit Density Exception

San Francisco homeowners, apartment building owners, and developers have recently received the right to build additional units on their property. These unit counts were previously not allowed by zoning laws.

In November of 2022, Mayor Breed signed into law a significant amendment to the Planning Code that allows a Density Exception to the existing residential zoning for most of the city. The law has given property owners the right to have up to four units per lot in most residential districts, and up to six units in corner lots in those districts. These units would be permitted in addition to any Accessory Dwelling Units (ADUs) permitted. Thus, one could have as many as five units on non-corner lots and seven total units on a corner lot. To receive the Density Exception, property owners must own the property for a minimum of one year. The ownership period of relatives who previously owned the lot may be counted toward the minimum one-year ownership period.

The number of units on each property can increase by creating dwellings where laundry rooms, parking, and storage now exist. Or new units can be built in the rear or side yard by adding height to an existing structure, or by converting a rear-yard structure

containing habitable residential space that is not a full dwelling unit. Any combination of the above methods is also permittable. Construction in the rear yard may trigger the need for a variance, as is further discussed later in this article.

If the property has a historic resource, the owner must demonstrate that new construction does not cause a substantial adverse change in the significance of the historic resource. This must be done through an historic resource evaluation (HRE). Also, the new structure(s) must produce at least as many dwelling units as demolished, and there must be a replacement of all “protected” units. Finally, owners must offer certain relocation benefits (and a right of first refusal for a comparable unit) to existing occupants of any protected units who are lower income.

The ordinance also requires that all new units developed under the density exception be subject to rent control and regulated by the Rent Board. To make the units subject to rent control, applicants for the density exception must enter into a Regulatory Agreement with the City. That can be a complex agreement and is best reviewed by a local attorney. The ordinance also establishes minimum unit sizes for the new units: at least one of the dwelling units must have two or more bedrooms, or a square footage

If a project proposes four or more new units, the units would be subject to a Minimum Rear Yard Requirement of the greater of (1) 30% of lot depth or (2) fifteen feet. Otherwise, existing rearyard open spaces requirements must be observed. However, upon a showing of “hardship” and “exceptional circumstances” (among other things), a variance can be obtained to allow a waiver of all or some of the Minimum Rear Yard Requirements.

Comparison to Accessory Dwelling Unit Regulations

The State Accessory Dwelling Unit (ADU) law also allows more units to be built than current zoning. However, it also allows construction in lot locations which that are not available for new structures under the Density Exception Law unless a variance is obtained. The lot’s rear yard is one such location. This is an advantage to using the ADU law and not the new Density Exception Law discussed above. If one wishes to build new units at a height above current height limits (currently forty feet in much of the City), one should consider using the State Bonus Density Law (BDL). The BDL allows two more stories than allowed by local zoning. For detailed information on BDL, check out my previous article in the February issue of this magazine in the archives at sfaa.org

ADUs are not subject to a request for a Discretionary Review hearing at the Planning Commission and have the advantage of a maximum sixty-day review

A new local law allows four to six (sometimes seven) units on lots that before allowed only one to three units.

timeframe; also, the units would not be subject to the California Environmental Quality Act (CEQA) and its appeals procedures.

On the other hand, a property owner should keep in mind that (1) ADU units cannot be sold as condominiums (although tenancies in common are possible); and (2) new ADUs can sometimes be subject to rent control.

Changes to Local Condominium Law

The new Density Exception ordinance changes local condominium law by authorizing an applicant who creates one or more new dwelling units under the density exception discussed above to submit an application to make each of the units a condominium if the applicants meet certain requirements.

First, an owner must sign an affidavit stating his or her intent to reside in a new or existing unit for three years after the issuance of the Certificate of Final Completion and Occupancy (CFCO) for the new dwelling units. The applicant must pay the small administrative subdivision fee specified in Section 1315 of the Subdivision Code. The applicant must also certify that (1) within the sixty months preceding the date of the condominium application, no tenant resided at the property; and (2) to the extent any tenant vacated his or her unit after March 2013 and before recordation of the subdivision map, such tenant did so voluntarily (or if an eviction occurred, it was not pursuant to Administrative Code Sections 37.9(a)(8-12) and 37.9(a)(14); i.e., no “no fault” eviction has occurred, except an Ellis Act eviction).

The new law does not negate the existing condominium rules; rather, it creates a new opportunity for creating a condominium project. The existing regulations for owneroccupied duplex conversions and the lottery moratorium remain intact. Those existing rules allow two-unit TIC buildings to convert to condominiums as long as each owner owns at least 25% and has occupied the unit for one year.

The “new construction” rules also remain. Those rules have always allowed a new unit

to be added to a single-family home, or to a multiple-unit building where all units are already condominiums. Those rules allow a new unit(s) to be added without restrictions on owner occupancy and without the other rules that apply when rental units are converted into condominiums (such as a recent history of no evictions).

The amendments to existing condominium law are best understood by comparing them to the existing “new construction” rules. Under the existing “new construction” rules, the owner of a single-family home (or owners of a multi-unit building already made up of condominiums) may add additional units as condominiums, but only up to the density allowed by zoning. As mentioned above, there are no eviction restrictions or residency requirements for “new construction” applications. The new Density Exception Law allows the owner of a single-family home to add additional units as condominiums beyond the density allowed by zoning, but only if the owner(s) qualifies as described above. Thus, the new law creates a new opportunity for those who own single-family homes in certain low-density residential zoning districts to use the Density Exception to create a condominium project for the first time.

Conclusion

The original version of the Density Exception Law discussed in this article would have allowed the Density Exception but would have done so in a way that eliminated the ability to add units (and create new lot splits) under State Law SB-9. That State law allows lot splits not currently permitted by local law, and it also allows the addition of a dwelling and an ADU to each new lot, as long as lots are zoned for single-family homes. However, the Mayor did not support the elimination of new units and new lots under the State’s SB-9 law. Therefore, the final version of the new Density Exception Law still allows new lots and units to be created under SB-9.

As a result of new local and state legislation, the latest of which is the City Density Exception law, there are now at least four new laws by which one can change lots zoned

for only a certain number of units into lots of a greater number of units. Depending on which of these laws are used, certain residential lots not zoned for as many as seven units can now have seven units (or five in the case of a non-corner lot). In choosing whether to use SB-9, the State Bonus Density Law, the State or City ADU law, or the new Density Exception Law, a property owner should consult with a land use attorney.

Brett Gladstone Esq. is an attorney at Goldstein, Gellman, Melbostad, Harris and McSparran (G3MH). He represents investors, developers, homeowners, and non-profits in land-use proceedings and CEQA compliance concerning residential and mixed-use developments throughout the Bay Area. This includes land subdivisions and condominium law. For the last 39 years, Brett has made regular appearances before Bay Area Planning Commissions, City Councils, Boards of Supervisors, and Historic Boards. Recently, Governor Newsom appointed Brett to the California Architects Board.

R. Boyd McSparran Esq. is the Managing Partner of Goldstein, Gellman, Melbostad, Harris and McSparran. He has been advising clients on tenancyin-common issues and forming condominium projects in San Francisco for over twenty years. Mr. McSparran is also a licensed real estate broker, representing buyers and sellers in off-market real estate sales transactions.

Legal Questions

Confused about local and statewide rental housing laws? Take advantage of SFAA’s legal information network. Before every SFAA General Membership Meeting, a diverse panel of San Francisco landlord attorneys answers your questions about your property, your tenants and the San Francisco Rent Ordinance. SFAA monthly meetings and legal panels are a benefit just for members, so make sure you are getting the most out of your membership and be sure to attend the next meeting. Email Maria with questions for the panel: maria@sfaa.org

Election Reflection

Written by CHARLEY GOSS

The November 8, 2022, election results have been certified. Although we recognize that SFAA members are upset by the passage of Proposition M, the Residential Vacancy Tax, overall, residential property owners should feel encouraged by the voters’ decisions this November. This article will overview the races and campaigns relevant to San Francisco’s rental housing providers.

Propositions

Although the voters approved the residential vacancy tax, the measure garnered “No” votes from almost 46% of the electorate. SFAA’s polling data indicated that defeating the tax would be an uphill battle, partly because the measure didn’t propose to tax an overwhelming majority of the population. The fact that two-thirds of San Francisco residents are tenants is well known to SFAA members, but the measure also exempted most property owners: owners of single-family homes and condominiums in buildings of two or fewer units were exempt from the tax.

In the end, although the measure’s approval is disappointing, the No on Propositions M and O campaign did well to secure “No” votes from 45% of the voters. In the weeks before the campaign, Supervisor Dean Preston, the measure’s most significant financial supporter, commissioned studies from the City’s Budget and Legislative Analyst on units that were vacant during the days the census was conducted. (Note: these were not studies on long-term vacancies held off the market that would be subject to the tax.) The studies were effective. They grabbed headlines citywide; however, the articles didn’t delve into the studies themselves or accurately differentiate them from Prop M.

In the end, the publicity proved successful for the measure’s proponents: Prop M received more total votes than any ballot measure, except for Prop I, which proposed re-opening JFK Drive in Golden Gate Park to motor vehicles. As of this writing, SFAA’s Board of Directors and the SFAA Legal Fund are reviewing the text of Prop M for legal vulnerabilities and opportunities to litigate against the measure in whole or in part.

In what was an unmitigated success, SFAA’s San Franciscans Against New Taxes (No on M and O) campaign resoundingly defeated Proposition O, the per-unit parcel

How the November 2022 election will impact local rental property owners.

tax for City College. Proposition O threatened to charge a $75 per apartment unit fee to property owners, with an additional tax for commercial space. The tax would have been imposed on property owners annually for the next twenty years. In defeating the measure, SFAA’s campaign has saved property owners millions and millions of dollars each year for the next two decades. The measure was defeated handily, with more than 63% of voters deciding against it. Voters sent a message to City Hall that they can’t always rely on property owners to be their ATM for pet projects.

Candidates

The November election was also noteworthy because many of SFAA’s endorsed candidates had successful races, perhaps indicative of a turning of the tides in San Francisco’s political arena. As we’ve covered previously in recent issues of SF Apartment Magazine, the results of 2022’s numerous elections showed voter dissatisfaction with the status quo and how the city is being managed.

District Attorney Chesa Boudin was recalled, as were three members of the San Francisco Board of Education in successive elections. November’s election further affirmed the electorate’s will when Brooke Jenkins, appointed District Attorney by Mayor Breed after the recall, was elected to continue to serve as DA. SFAA was an early endorser of DA Jenkins, holding fundraising events for her campaign.

In November’s Board of Education races, we filled the three spots made vacant by February’s recall. Two of SFAA’s three endorsed candidates (Lisa Weissman-Ward and Lainie Motamendi) were successful in their campaigns, perhaps representative of the voters’ intent to demand accountability and results-based progress from our elected officials.

DA Jenkins is essential for our membership for several reasons. First, she intends to achieve restorative justice in a way that also ensures accountability for the crimes taking place in the neighborhoods where SFAA members live and own buildings. Second, if DA Jenkins’ election can result in any reduction in crimes, it will improve the perception of safety in San Francisco (and with it, the desirability to live and work in San Francisco). Demand for apartment rentals is fueled by the economy, the local job market, and a general desire to live here, so any improvement in public safety is a big win for SFAA members.

But with so much punitive legislation passing over the last few years at the Board of Supervisors (BOS), perhaps more directly impactful for rental property owners are the results of the various Supervisorial races, where the even-numbered districts were up for election or re-election.

In District 2, SFAA-endorsed Supervisor Catherine Stefani was reelected after running unopposed. Stefani will continue fulfilling her role as a practical and moderate voice of reason in what has been an increasingly ideological legislative body.

In District 4, surprising to some casual political observers, SFAAendorsed Joel Engardio was elected by just 460 votes out of almost 27,000 votes cast. Engardio’s win over incumbent Gordon Mar is the first time a candidate for Supervisor defeated the incumbent Supervisor in the twenty-two years that San Francisco has had District Elections. This was Joel’s third time seeking a seat on the BOS. SFAA has built a positive and productive relationship with Engardio over the years, endorsing and fundraising for him every time he’s appeared on a ballot. This year, SFAA also encouraged and recruited District 4 SFAA members to volunteer and engage with the Engardio for Supervisor campaign. Engardio’s election means SFAA members can count on a reasonable voice on the BOS, focused on crime, safety, and government accountability.

In District 6, SFAA-endorsed Matt Dorsey was elected in a competitive election against SF Democratic Party chair Honey Mahogany. Dorsey had been appointed to his seat on the BOS after Matt Haney was elected to the California State Assembly in April. SFAA was an early endorser of Supervisor Dorsey, and our members also helped fundraise for his campaign. SFAA members helped facilitate house parties, building meet-and-greets, and introductions to their residents. Supervisor Dorsey’s district is tenant-heavy, and his vote won’t always align with SFAA’s priorities. However, his opponent was one of the leading proponents of the residential vacancy tax. Dorsey will continue his role on the Board as a thoughtful and respectful voice of reason on the various proposals that come before him.

In District 8, SFAA-endorsed Rafael Mandelman retained his seat on the Board after running virtually unopposed, while District 10 Supervisor Shamann Walton was also re-elected.

While the re-elections of Stefani, Mandelman, and Walton were entirely predictable and without surprise, the results in Districts 4 and 6 have made waves in San Francisco’s political scene. The success of Joel Engardio and Matt Dorsey in November will bring a new day and a new balance to the BOS. Much of the legislation focusing on landlord-tenant law has passed unanimously or with a supermajority in recent years, but SFAA members can be hopeful for moderate, reasonable elected officials serving on the Board.

We should be clear that November’s election results don’t mean tenant-focused legislation will necessarily fail, but SFAA now has more positive relationships and allies on the Board. A legislative body of representatives who SFAA can work with in a meaningful way to discuss policy priorities and amendments to legislation based on member feedback.

For the first time in quite a while, SFAA members can expect a balanced and thoughtful perspective to legislative proposals from a majority of the Board.

Charley Goss is the Director of Government Affairs at the San Francisco Apartment Association. He can be reached at charley@sfaa.org or 415255-2288 ext. 114.

P’s & Q’s

Written by DAVID SEMEL

Why should landlords practice good etiquette? To avoid trouble, minimize problems, and enhance your tenants’ experience, it is wise to follow etiquette. Etiquette is the conduct or procedure prescribed by society or authority to be observed in social or official life. For landlords, this means following the law and treating your tenants with respect during all stages of their tenancies, from before the tenancy commences through and including the end of the landlord-tenant relationship.

Advertising

In San Francisco, while it is illegal to discriminate against standard protected classes (race/nationality/gender/religion/sexual orientation etc.), it is also a violation of the Penal Code to discriminate against people based on their source of income. This means landlords cannot discriminate against people receiving housing assistance. Landlords should not state in rental listings “Section 8 need not apply” or similar language warning renters with housing assistance to look elsewhere. Refusing to rent to people with housing subsidies can result in either a civil damages action by the applicant, a Department of Fair Employment and Housing complaint, or both.

Introductory Letter

When signing a new lease, or when a new owner or manager takes over responsibility for a property, California law requires that the tenant must be informed of the name and contact information of each person to whom rent must be paid and how rent should be paid, each person authorized to manage the property, and each person authorized to receive service of process and notices. Alternatively, this information can be posted in two conspicuous locations in the property.

A successor owner or manager must provide this information within 15 days of becoming the new owner or manager. If this information is not timely provided, the owner/manager is prohibited from serving a notice to pay rent or quit and from commencing unlawful detainer proceedings against a non-paying tenant. The same statute requiring this information also requires landlords to provide tenants with a copy of their lease within 15 days of signing, and annually thereafter within 15 days of a tenant’s request.

Creating the Tenancy

When signing a new written lease (always recommended), it is wise to conduct an initial inspection and complete a checklist noting the condition of the unit, have the tenants sign the checklist, and take photos or video showing the condition of each room. This only takes a few minutes but can prevent significant exposure if the tenant turns litigious.

If your property has a unit that shares a utility meter with another unit, you should have all parties sign a written agreement stating how the utility charges will be divided. If a tenant with a meter that serves areas outside the tenant’s unit has no written agreement governing payment of the charges, you could be ordered to reimburse the tenant for all utility payments measured by the meter.

During the Tenancy

Landlords can require tenants to pay the rent using a specific method, such as checks or money orders, but they cannot require that rent be paid in cash (initially) or via electronic transfer. If a check is returned due to insufficient funds, or if the tenant stops payment on a check, the landlord can require that further rent payments be made in cash for up to three months. The landlord must notify the tenant of the cash payment requirement in writing, with evidence of the insufficient funds attached.

Basic landlord etiquette is one of the most effective ways to avoid bigger problems.

Sometimes tenants having difficulty paying their rent get assistance from third parties. Attentive landlords have traditionally refused to accept rent from third parties for fear of giving the third-party tenancy rights at the property. Starting in January 2019, however, California law requires landlords to accept rent payments from third parties if the payment is accompanied by a signed acknowledgment that the third party is not a tenant and acceptance of the payment does not create a new tenancy.

Numerous issues arise during most tenancies. In general, etiquette requires landlords to promptly and professionally respond to tenant requests and reports of defective conditions. Landlords should handle repairs using qualified professionals and not accept tenants’ offers to make repairs. Disputes over repairs can lead to Rent Board petitions for decreased housing services or lawsuits for damages based on breach of the warranty of habitability or even constructive/wrongful eviction. Landlords should therefore maintain documentation of tenant complaints and responsive actions.

Unless a tenant gives permission to enter in writing, always post written notice at least 24 hours in advance with the date, approximate time, and a valid reason for entry. Many landlords don’t know that state law requires them to leave evidence, such as a note, if they enter when the tenant is not present. If the tenant is not present at the noticed time, landlords are still permitted to enter and inspect as noticed. It is good etiquette to try to accommodate tenants who want to be present or absent during the entry.

If a tenant is late paying the rent, there is no need to immediately serve a notice to pay rent or quit. Contact the tenant and ask what the issue is with paying the rent. Be firm and inform the tenant in writing when the rent is due and that late payments are not acceptable. If legal notice becomes necessary, it must include a place to pay in person and cannot dictate the payment method. The law excludes weekends and holidays from the three-day period altogether, so day one is the business day after the notice is served and the second and third days must be non-holiday weekdays. Also note that San Francisco passed an ordinance requiring landlords to first serve a ten-day warning notice published by the Rent Board before landlords can serve a three-day notice to pay rent or quit; this ordinance was deemed invalid by the Superior Court but the City appealed that decision, so any three-day notice served before that case has run its course could be deemed retroactively invalid.

Landlords can raise the rent once each year via written notice. If the unit is covered by the Rent Ordinance’s rent increase limitations, the small percentage published by the Rent Board is the maximum allowable rent increase. Note that a major change in the law became effective in January 2020: the fact that a property was built after 1979 no longer exempts it from the rent increase limitations.

Privacy

Good landlords respect tenants’ rights to privacy and provide reasonable peace and quiet enjoyment of the premises. They do not enter a tenant’s unit without permission or advance written notice.

Landlords may, and arguably should, install security cameras at entrances and in common areas, so long as they record only video— not audio—and the field of vision does not permit them to see inside any tenant’s unit. Cameras should be easily visible. Security cameras can provide both a deterrent to misconduct and evidence of said misconduct. It is much easier to convince a tenant and their attorney that the tenant should vacate voluntarily when you can show them videos or photos of egregious misconduct that constitute a just-cause ground for eviction or violation of a behave-andstay settlement agreement.

Security Deposits

California law permits residential landlords to collect refundable security deposits up to the amount of two months of rent. State law also prohibits landlords from making security deposits non-refundable. In San Francisco, landlords must pay interest on each security deposit annually at a rate published by the Rent Board.

When a landlord learns that a tenant is terminating the tenancy, the law requires the landlord to notify the tenant of the option for an initial inspection within two weeks before the vacate date. If the tenant opts for the inspection, the landlord must identify all visible damage beyond wear and tear so the tenant has the chance to abate the damage and avoid deductions for those items. Landlords are not required to move furniture or pick up rugs—they can still deduct for damages they discover after the tenant vacates.

Then, within 21 days of the date the tenant vacates, the landlord must refund the deposit or detail the deductions and provide supporting evidence, such as receipts, along with any remaining refund. Security deposit disputes generally involve small amounts of money, making it advisable to compromise to avoid the waste of time involved in Small Claims court.

If one or more tenants vacate but leave others behind in the unit, the departed tenants might ask the landlord to refund their share of the security deposit. Legally, they have not surrendered possession of the unit so the landlord has no duty to refund any of the deposit. But it is good landlord etiquette to work with the departed and remaining tenants to keep everyone happy. It can be productive to ask the departed to recoup their share of the deposit from the remaining tenants. If the departed and remaining tenants are not getting along, which is a common reason for some tenants to relocate, the landlord should ask the remaining tenants to submit the equivalent of the departed tenants’ portion of the deposit and then the landlord can send the refund to the departed.

Adhering to these and other basic landlord etiquette tips might not always be easy, but good etiquette is almost always required to avoid, or at least minimize, bigger problems.

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. David Semel is an attorney with Fried & Williams LLP and can be reached at 415-421-0100.

Tax-Rate Resolutions

written by JOHNSON LE, CPA

Tax planning may not be on everyone’s radar during the New Year. But what if you are one of the few who stayed true to your 2022 New Year’s resolution of saving more by reducing your taxes? Welcome, you have flipped to the right page!

A new year comes with fresh opportunities to take advantage of not only improving the condition of your properties, but also how much more cash you get to keep for your business or yourself.

This article will introduce you to new tax law changes, and remind you of the old-but-good tax strategies.

Home Repairs and Improvements

If you plan on repairing or remodeling your rental property in 2023, familiarize yourself with what expenses can be deductible in the new year or what is required to be capitalized and depreciated over a period of years. Ask yourself whether the repairs you are making keep the property in its ordinarily efficient operating condition or if the repairs extend the life of the property, enhance value, or improve it to be better than the original operating condition.

If you are keeping the property in its efficient operating condition, then deduct the expenses. Whether you fix a water leak or maintain your yard with landscaping work, deduct it all

for the current year. You can expense ordinary and necessary expenses for managing, conserving, and maintaining your rental property.

If you made repairs to improve your property, such as a remodel to upgrade the whole bathroom or replace an entire roof (extended useful life), then the costs are not allowed to be fully expensed in the current year. Instead, the costs must be capitalized and depreciated over the asset’s useful life. In this case, the improvements above would require the cost to be recovered over 27.5 years instead of in the current year.

The difference between expensing costs in the current year and depreciating the costs over 27.5 years could play a significant role in determining whether your tax situation shows taxes owed or a tax refund.

Routine Maintenance Safe Harbor

Prevalent in many tax returns today, the De Minimis Safe Harbor election is an annual election that allows the expensing of tangible property up to $2,500, or $5,000 for businesses with applicable financial statements. Another safe harbor that is not so prevalent but is beneficial to landlords is the Routine Maintenance Safe Harbor.

To stay within the line of reasonableness for the expensing of routine maintenance, you will want to keep

the property in its “ordinarily efficient operating condition.” This means that you can deduct the cost to maintain the property, but this also immediately eliminates the ability to deduct any capital improvements considered to be for the “betterment” of the property.

So how does this benefit you?

Suppose you have an elevator in your rental building, and the expensive elevator door operator gets damaged. Since the elevator is part of the “building system” and will reasonably need routine repairs or parts replaced twice within its class life, the cost is deductible because the repairs bring the elevator to its ordinarily efficient operating condition. However, if the elevator was restored or improved beyond its operating condition or if its useful life was extended, the cost will not be eligible for a currentyear deduction and must be capitalized to be depreciated over a period of time.

There is no election for the Routine Maintenance Safe Harbor; however, you must keep your books accurate and up to date. This includes examining invoices and your books to ensure routine maintenance costs do not contain words such as “remodel,” “improvements,” “restorations,” “replacement,” etc.

Bonus Depreciation and Section 179 Expensing

Although 100% bonus depreciation was left behind in 2022, you are still entitled to 80% depreciation in 2023. As bonus depreciation will continue to

Tax savings come when you are proactive, not reactive.

reduce by 20% each year until it reaches zero in 2027, be proactive in planning your fixed asset purchases and property improvements. Because what you missed with 100% bonus in 2022 may be expensed 100% using Section 179, subject to annual dollar limitations.

Imagine a scenario wherein the top priorities for your rental property in 2023 are purchasing new washer/dryers and repaving your driveway. You are allowed to take 80% bonus depreciation, or 100% Section 179 expensing regarding the washer/dryers, so which one are you choosing? Probably the Section 179 expensing. What about the driveway? Instinctively, you may want to say Section 179. However, Section 179 has limitations that may not allow for the full expensing of the driveway work. Section 179 expensing is allowed for special qualified properties related to non-residential properties, such as commercial buildings, and the rental property must be an active trade or business. Thus, you may be limited to the 80% bonus depreciation.

There are additional layers to consider, too. Are new or used asset purchases more beneficial for your business? If Section 179 deduction is limited to the net taxable business income and cannot result in a loss for the year, while bonus can, how do you plan for 2023? Make it a habit to hold quarterly or year-end tax planning meetings with your CPA and/or bookkeeper to tailor a plan specific to your circumstances.

1031 Exchange

Have you ever caught yourself daydreaming about another investment property, whether it’s due to your current cash flows tightening from a nearly fully depreciated property or because you want a property that requires lower maintenance? Or do you simply wish to retire in the future on a beach? Consider a 1031 exchange that could give you an increase in buying power and more capital to invest by deferring the gains.

Have a qualified intermediary assist in facilitating the exchange. The qualified intermediary should be able to clearly

communicate rules, such as time restrictions. After the transfer of your property, you are limited to 45 days to identify a replacement property and 180 days to acquire the replacement property. Note that 45 days and 180 days run concurrently; meaning it is not 45 days plus 180 days. Perhaps the most important role of the intermediary is to hold on to the sales proceeds and use them to purchase the replacement property. Only your intermediary should have access to the funds, otherwise the exchange could be jeopardized. If you don’t want the boot (cash received that becomes taxable), do not touch the money!

Lastly, consider your mortgage loans and debt in the exchange. A reduction in loan liability at the end of the exchange could lead to taxable boot. There are many intricacies and nuances in a 1031 exchange; therefore, it is wise to seek guidance from a qualified exchange intermediary and your tax advisors.

Clean Vehicle Credit

The Inflation Reduction Act changed the EV (electric vehicle) tax credits, now called the Clean Vehicle Credit. The maximum tax credit available is $7,500 for new vehicles, and up to $4,000 for used electric vehicles purchased from a dealer. The clean vehicle must satisfy the critical mineral requirement and a battery component rule to reap the full $7,500 benefit. The new law changes also remove the manufacturer sales threshold, where some manufacturers did not qualify for the credit after the phase-out when over 200,000 EVs were sold.

In addition, if you plan to install an EV charging station on your property, you can claim a tax credit for the lesser of 30% of the cost or $1,000. Other changes within the Inflation Reduction Act allow the buyer to transfer the tax credit to the dealer during purchase, which would immediately lower the payments for the buyer.

If you plan to make an electric vehicle purchase, consult with a tax professional as there are income limits and disqualification for some high-cost electric vehicles.

Plan a Vacation at Your Short-Term Rental Property

Your short-term rental or vacation property gives you many benefits that you may be aware of, including a source of rental income and the ability to deduct rental losses. What you may be unaware of is that you are allowed to enjoy your investment property, too. You are entitled to the greater of 14 personal use days or 10% of the days the property was rented to spend at your short-term rental property. So, when planning your next family vacation, you can visit your property and take your family, too.

If you spent your “vacation” doing repairs or maintenance work on the property, those maintenance days do not count as personal use days. If you decide to do maintenance work, your travel costs are also deductible!

Keep Good Records and Maintain Your Books

Good record-keeping helps you identify all sources of your rental income and expenses, and overall, enables you to monitor the progress of your rental properties. Ready access to this information will help you prepare your financial statements and file tax returns smoothly.

It is essential to maintain supporting documents reported on your tax returns. The necessary supporting documentation for any deduction expenses includes receipts, canceled checks, or invoices. If you were ever audited, you would need this evidence to avoid additional taxes and penalties. If in doubt, make a copy and store the supporting documents electronically or have a specified cabinet for your financial and tax information.

As with anything tax-related, if the interpretation is unclear or you have questions about potential tax breaks or liabilities, you should seek guidance from a tax professional.

Johnson Le, CPA, is with Shwiff, Levy & Polo, LLP and can be reached at 415-291-8600.

Exit Stage Left

written by JUSTIN A. GOODMAN

The Ellis Act is commonly thought of as allowing landlords in rent-controlled jurisdictions to “go out of business.” More specifically, it does two things. First, it gives landlords the right to exit the residential rental market. In that respect, it commands public entities not to compel property owners to offer or continue to offer residential units for rent. To achieve this purpose, it permits local controls, consistent with its terms, for terminating a tenancy.

Second, it dictates how to re-enter the rental market during the ten-year period of constraints. During that period, former tenants displaced from a particular unit have a right of first refusal if the accommodations are returned to the rental market. And if this occurs during the first five years, the unit remains “vacancy controlled” at the former rental rate. Also, if the accommodations are demolished and re-rented within five years, owners cannot benefit from a new construction exemption from rent control.

The Ellis Act was enacted in 1985 in response to a Supreme Court decision that affirmed Santa Monica’s authority to compel a residential landlord to remain in business. The landlord wanted to demolish his rent-controlled property to escape regulations and sell the land at a profit. Santa Monica would only issue a demolition permit in a few cases (e.g., where the property was not habitable).

The Court found this to be a lawful exercise of local authority, noting that the landlord had many alternatives to remaining in business, including hiring a property manager, keeping vacant units vacant, or selling. The California legislature quickly responded by codifying property owners’ fundamental right to cease doing business as a landlord.

Since then, the Ellis Act has been amended several times, largely favoring tenant rights. The initial 60-day notice period was elongated to at least 120 days (and a full year for elderly/disabled tenants). The legislature responded to an appellate decision asserting the primacy of the Ellis Act over demolition controls by acknowledging local land use authority. The Ellis Act initially permitted relocation assistance to low-income tenants but was later amended to allow “reasonable” relocation assistance to any displaced tenant.

This puts the right to exit the rental market in a precarious position. The Ellis Act embodies a power struggle between rent-controlled cities and landlords’ exercise of state law. Early cases invalidated overt violations of state law (like requiring an additional six-month notice to tenants beyond what the Ellis Act requires). But contemporary legislation is more insidious. For instance, SFAA took on an amendment to the San Francisco Planning Code that imposed a ten-year limitation on merging units withdrawn

from the rental market. The Court found that this imposed a “prohibitive price” on exiting the rental market.

That same reasoning applied to a literal price tag—increasing relocation assistance from $4,500 per tenant (inflationadjusted from 2005) to a 24-month market rate rental subsidy for displaced tenants (potentially propelling the price to withdraw a single unit to six figures). While this kind of price tag caught headlines, a recent amendment to the relocation ordinance quietly increased the payment standard by several thousand dollars per tenant (to compensate, among other things, for five days of missed wages for a move), and only for evictions based on the Ellis Act. This amendment likely would have met the same fate but was just moderate enough that it didn’t provoke a challenge. Local governments get away with violating state law as long as they’re subtle.

And while courts generally seem willing to affirm the preemptive effect of the Ellis Act in the abstract, they are increasingly adulterating jurisprudence when an actual tenant is involved. In 2003, the Supreme Court established the architecture for litigating an Ellis Act unlawful detainer: a landlord could prevail if a tenant complained about defective conditions, so long as they had a good faith intent to exit the rental market. A 2017 appellate division decision departed from the high court’s reasoning by adding an “intent” requirement. Now, where a landlord could terminate a tenancy if housing services were eliminated and/ or the tenant complained about that fact,

Could the ability to go out of business prove crucial to staying in it?

it is inconsistent to rule that the landlord must fail if they intended these conditions.

Two cases in 2022 continued to erode longstanding Ellis jurisprudence. In one, a San Francisco landlord complied with all procedures dictated in the Ellis Act. The landlord had also paid all relocation assistance due to “tenants.” San Francisco, however, now requires payment to all “eligible tenants” (a term of art defined as “any authorized occupant regardless of age”), following a decision that found a landlord’s notice of termination valid, even though it did not also pay minor children at the property.

This broadened eligibility is problematic where a landlord is not necessarily aware of anyone at the property other than their tenant. A previous case invalidated a requirement that a landlord state the amount of relocation assistance they believed to be due, as this guesswork put a “prohibitive price” on the ability to exit the rental market. But without evaluating the propriety of the payment structure itself, the court conditioned a successful eviction upon notification of the city’s relocation ordinance. This suggests a city can interfere with the Ellis Act by exercising any authority the state law does not expressly take away and requiring notification of those regulations, whether or not they are valid. Hardly the appropriate deference to preemptive state law.

In the other case, a Santa Monica property owner had five contiguous lots with rentcontrolled properties (some of which were multi-unit buildings straddling two lots). He withdrew the five parcels from the rental market pursuant to the Ellis Act, obtained demolition approval, and then constructed one single-family home on each parcel. He re-rented one of these new construction homes within five years.

The Ellis Act states that property owners do not benefit from local new-construction exemptions if they demolish property, develop it, and re-rent within five years. On the other hand, Costa-Hawkins has several different “decontrol” provisions that operate to supersede local restrictions. One exempts new construction at the

state level, and this language, enacted over a decade later, would ostensibly supersede the Ellis Act’s deference to local, new construction exemptions. However, a 2009 decision held the opposite. It read the two laws together, given that they address the same subject matter, and noted that the Ellis Act had been amended more recently than Costa-Hawkins. Its elimination of the new construction exemption must therefore control. After all, it was the more specific statute on the subject. The singlefamily home was therefore not exempt as “new construction.”

But the single-family home presented a different situation. Costa-Hawkins also exempts dwellings that are “separately alienable from the title of any other dwelling unit” (i.e., single-family homes). The Ellis Act does not speak to this exemption at all. And, since the Ellis Act was amended more recently, its choice to leave Costa-Hawkins untouched must mean that Costa-Hawkins controls, as the more specific statute.

However, the court departed from existing jurisprudence. It wasn’t enough that the most recent statutory language would decontrol the single-family home whether or not it was new construction. Instead, the court looked to a precursor to CostaHawkins (sponsored by senator Jim Costa a decade before his eponymous bill). This bill tried to achieve the same decontrol provisions as Costa-Hawkins (for new construction and single-family homes), and the nascent Ellis Act language would have eliminated both exemptions in the present circumstance.

The analytical problem? The precursor to Costa-Hawkins was never enacted; the Ellis Act was. Costa-Hawkins was ultimately enacted, but neither law ever eliminated vacancy decontrol for single-family homes— even when Ellis Act was later amended. To the extent this was a loophole, it is up to the legislature to fix it, not the courts.

It’s getting more difficult for property owners to assert their Ellis Act rights against their tenants. But the Ellis Act remains more important than ever to property owners—even those who seek to

remain in the rental business. For instance, Costa-Hawkins allows cities to impose vacancy control following a non-fault eviction. The Ellis Act strictly limits vacancy control to five years, and so San Francisco follows suit for every other non-fault eviction. The City can prevent the conversion of illegally rented dwellings back to commercial space. It can also issue notices of violation for illegal construction or other code violations that apply to residential units, compelling the construction of code-compliant residential units. But arguably, the Ellis Act prevents the compelled reconfiguration of such property from meeting habitability requirements.

Proposition M (2022)—the Empty Homes Tax—seeks to increase housing supply by penalizing property owners who are not occupying or renting their units. While the Ellis Act generally affects property owners terminating tenancies, it may have an interesting application. Landlords may want to keep vacant units off the market when rental rates are down (for instance, during a global pandemic that caused renters to flee urban centers). If the Ellis Act sees “prohibitive prices” in laws that discriminate in exiting the rental market, this prejudice may apply equally in laws that compel owners to enter it, other than in their chosen circumstances. Thus, while the Ellis Act is generally used to help property owners cease being landlords, it can also serve as a firewall against overreaching local intrusion into private affairs.

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Justin A. Goodman is with Zacks, Freedman & Patterson, P.C. and can be reached at 415-956-8100.

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The Best Defense

written by VARIOUS AUTHORS

Q. After the tenant vacated, I found the bathroom full of mold and will need to have it professionally cleaned. I was not aware of this problem during the tenancy, and it appears as though the mold growth was caused by a lack of cleaning and ventilation during the tenancy. May I deduct the cleaning costs from the deposit?

A. First, let’s review the security deposit law found in Civil Code Section 1950.5. The security deposit may be used at the end of a tenancy to compensate the owner for unpaid rent accrued before move-out, to repair damages caused by the residents beyond normal wear and tear, and to clean the apartment to the same level of cleanliness that existed when the tenancy began.

Once the residents give notice of their intention to vacate, owners should issue a written notification informing them of their right to request a pre-move-out inspection. Please use the CAA/SFAA form (sfaa.org/resources). If the residents opt for this inspection, you should conduct it no earlier than two weeks before the move-out at a mutually acceptable date and time. The purpose of the inspection is for property owners to identify in a

written itemized statement of cleaning or repairs that may cause a security deposit deduction if not completed before the residents leave.

Also ensure that you are disseminating the latest mold brochure to new and existing tenants. Beginning in 2022, the State requires all rental housing operators to provide tenants with a mold disclosure before the lease is signed. The SFAA 2022 and 2023 leases now incorporate this disclosure within the body of the main lease. In other words, there is no longer a mold addendum, as the mold disclosure is part of the lease itself. The mold disclosure pamphlet may be downloaded from the California Department of Health’s website (cdph.ca.gov).

It is unclear if a pre-move-out inspection was sought or even offered in this instance. If you failed to offer an inspection, then no deductions should be made. If the inspection occurred, the question becomes whether or not this problem was identified on the itemized statement. If it was highlighted, or if the resident declined to have an inspection, then the removal and treatment of excessive mold growth would probably warrant a deposit deduction under both the “damage beyond normal wear and tear” and the “cost of cleaning” allowances of

Section 1950.5. Remember, proper mold remediation usually requires partial wall and ceiling replacement in addition to a thorough cleaning.

You must send out a deposit disposition statement within 21 days after the residents have left. You and your former tenants may agree to handle this communication via email. If the total amount deducted exceeds $125, make sure to include copies of the material receipts and vendor billing statements, and if you personally performed some or all of the work, you must submit your bills reflecting commercially reasonable charges for your labor. If the receipts/billing statements are not available within the 21-day period, provide an estimate and the contractor’s information. Once you obtain this documentation from your vendor, forward it to the departed residents within 14 days upon your receipt.

Lastly, photograph this contamination and try to have the remediation professional attest in writing that the mold outbreak was likely caused by the resident’s poor housekeeping. Mold lawsuits are increasingly common, and insurance oftentimes will not cover these claims. Therefore, you will want to document that the mold presence was not created by some building defect or the ownership’s failure to properly maintain this rental unit.

[For more information on the updated 2023 SFAA Lease Agreement, and how to download or request a copy, turn to page 8.]

—David Wasserman

Owners should issue a written notification informing vacating tenants of their right to request a pre-moveout inspection.

On the List.

HOW TO AVOID APARTMENT FRAUD

Arm staff with tech and strategic intelligence to flag bogus applications. Technology is great. But empowering your staff to fight fraud on the front lines of leasing goes beyond simply enabling digital tools.

While spotting bogus financial documents with the naked eye isn’t easy, there are common tells fraudsters sometimes leave behind and steps you can take to make it harder for them to get through the application process.

Training your staff to look out for these discrepancies while incentivizing them to get high-quality renters in the door in the first place—instead of just generating the maximum number of new leases each month—can help to stem the amount of fraud that makes it into your final sales funnel.

FIVE TIPS TO KEEP IN MIND:

• Set the bar higher for applicants by requiring two months of paystubs or bank statements with an application. Legitimate applicants will happily provide them, since they want to get in your building, while fraudsters will be forced to dig themselves a deeper hole in their attempted deception.

• Look for variable dates for when a paystub was issued, and when the deposit hit the applicant’s account. While weekends and holidays can shift deposits by one or two days, it’s rare for this to happen in consecutive months. This is an area where fraudsters often get sloppy. Train your staff to look for this tell first.

• Another common tripping point for fraudsters comes in the form of consistency within a single financial document. While there are multitudes of sample bank statements online identical to the legitimate forms banks use, fraudsters trip themselves up creating replicas. For example, an existing fraudulent Bank of America statement out there has the institution’s legitimate blue-and-red flag logo on one page, but on another, the logo is solid red. Train staff to look for these kinds of inconsistencies.

• Pick up the phone and call employers to confirm an applicant works where they claim. Use numbers from the company’s website, not what was provided on the application. (A difference between the two could be a fraud flag, as well.) While many firms won’t release specific salaries, it’s worth a shot to see if the applicant has a job where they say they do.

• Incentivize your team to prioritize legitimate applications by tying future bonuses to a property’s on-time rent payment score, not just the number of new leases staff generate in a given month. By awarding them for landing high-quality leases, you’re motivating them to root out questionable applications.

The surge of rental application fraud means property managers have to work harder to train and motivate staff to defend the front lines of legitimate leases at their communities. Giving staff the automated tools they need is a critical first step, while training them to spot the telltale signs of fraud upfront empowers them to succeed.

Daniel Berlind, CEO of Snappt

Check Out What’s New at SFAA!

1.

SFAA’s New and Improved Website Is Live!

Our new website makes it easier than ever to access the information, market surveys, education, and forms you need to manage your rental properties. The streamlined website allows SFAA members to quickly sign up for classes, access preferred vendors, and get legislative updates. Go to sfaa.org today!

2.

SF Apartment Magazine is Now Available Digitally!

The official publication of SFAA, SF Apartment Magazine reaches approximately 6,000 readers in print each month. Now that the publication is accessible digitally, members can access the invaluable content from anywhere—and advertisers have an even broader reach. Go to sfaa.org/magazine today!

Interested in advertising?

Your ad will appear in the feature-length magazine, alongside articles written by San Francisco’s top landlord attorneys, industry professionals, and small rental property owners. With a readership of rental property owners and industry professionals, your ad will reach the right targeted audience to grow your business.

Contact Vanessa Khaleel at vanessa@sfaa.org or Pam McElroy at pam@sfaa.org to learn more about advertising opportunities and special discounts. San Francisco Apartment Association I 265 Ivy Street I San Francisco, CA I 415.255.2288 I www.sfaa.org

The San Francisco Apartment Association is your rental housing resource. SFAA has been working round-the-clock educating, advocating for, and supporting the rental housing community so that its members operate ethically and fairly.

RENT BOARD REDUX

Lots of Hot Air

written by THE SAN FRANCISCO RENT BOARD

When the cold weather brings heated arguments.

Editor’s Note: The following San Francisco Rent Board cases are real, though they have been edited for space and clarity. They have been selected to highlight some of the more interesting cases that the board reviewed at its recent commission meetings. For full Rent Board agendas and minutes, please visit sfrb.org.

1600 Block of Clement Street

The tenant’s petition alleging decreased housing services was granted, and the landlords were found liable to the tenant in the amount of $3,200.00 for a lack of heat over a period of 32 months. On appeal, the landlords argue in part that a rent reduction should not have been granted for a 13-month period when the tenant made no complaints about the heating system.

The landlord also stated that the tenant prefers to walk around in a T-shirt and shorts all year around and expects the building’s heating system to adjust to his preferences. She stated that other tenants have complained that the building is too hot, and that the boiler is checked regularly and is working “fine.” She said that she offered to give the tenant a portable heater and also offered to install a wall heater in his unit, but he declined.

Decision: To deny the appeal (5-0).

1900 Block of Page Street

The tenants’ objection to the landlord’s Accessory Dwelling Unit (ADU) Declaration was granted. The Administrative Law Judge (ALJ) found that the

landlord’s proposed ADU construction project, resulting in a reduction of bike parking spaces, constitutes a substantial reduction in housing services pursuant to Rent Ordinance Section 37.2(r).

On appeal, the landlord argues in part that the landlord’s current construction plans will accommodate more bike parking spaces than previously proposed.

A tenant stated that she had not yet seen the landlord’s revised ADU construction plans and asked that the case be remanded for a supplemental hearing so that the tenants can review the new plans and raise any objections.

Another tenant stated that the sufficiency of bike storage in the building is an important issue and that both he and co-occupant keep bicycles on the premises that they use to commute to work each day. He stated that the revised ADU construction plans submitted by the landlord on appeal are confusing and contradictory, and that the tenants deserve a chance to review the landlord’s revised plans at a supplemental hearing.

A third tenant stated that the landlord’s revised ADU construction plans were not part of the original hearing and asked that the landlord’s appeal be denied or remanded for a supplemental hearing to allow the tenants to review the plans.

Decision: To deny the appeal (5-0).

Annual Rent Increase for 2023-2024 Announced

For rent-controlled units, annual allowable increase amount effective March 1, 2023, through February 29, 2024, is 3.6%.

This amount is based on 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 6% as posted in November 2022 by the Bureau of Labor Statistics.

To calculate the dollar amount of the 3.6% annual rent increase, multiply the tenant’s base rent by .036. For example, if the tenant’s base rent is $2,000.00, the annual increase would be calculated as follows: $2,000.00 x .036 = $72.00. The tenant’s new base rent would be $2,072.00 ($2,000.00 + $72.00).

To learn more about the San Francisco Rent Board, call 415-252-4602 or go to sfrb.org

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem.

Be On Your A Game.

Sign up for SFAA classes at www.sfaa.org or by calling 415-255-2288.

sfaa 2023 sfaa2023calendar

January

MONDAY, JANURY 9

Board of Directors Mtg. 11:30 a.m.

THURSDAY, JANUARY 19

Lunch & Learn

Documenting Screening Criteria and Rental Policy Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Members $45 Non Members $65

THURSDAY, JANUARY 12

Getting the Most Out of Your Technology with Intellirent Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m. Free for SFAA Members

THURSDAY, JANUARY 26

Lunch & Learn

Virtual Staging Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Members $45 Non Members $65

SFAA MEMBER MEETINGS ARE HELD VIRTUALLY DUE TO COVID-19. FOR TOPICS AND SCHEDULES, VISIT SFAA.ORG.

IN-PERSON MEETINGS WILL RESUME SEMI-ANNUALLY IN 2023. MARK YOUR CALENDARS FOR THE FIRST IN-PERSON MEETING: MARCH 15, 2023. w

THURSDAY, JANUARY 12

Lunch & Learn

Is Your Unit Ready? Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Members $45 Non Members $65

THURSDAY, JANUARY 26

California’s Domestic Violence Law Webinar Zoom Webinar System 10:00 a.m. to 11:00 a.m.

Members $45 Non Members $65

WEDNESDAY, JANUARY 18

Virtual Member Meeting Candidates and Issues

The SFAA office will be closed December 30th & January 2nd in observance of New Year’s Day.

RENT BOARD FEE

$29.50

Chapter 37A of San Francisco’s Administrative Code allows the city to collect a per-unit fee for each residential dwelling unit that is subject to the San Francisco Rent Ordinance. This fee defrays the entire cost of operation of the Rent Board. This fee is billed to the landlord each year on the property tax statement sent in November, but the law permits landlords to collect a portion of the Rent Board fee from those tenants in occupancy as of November 1 of each year. A landlord is allowed to collect 50% of the cost of the fee from the tenant. If you have not collected Rent Board fees in the past, you can collect back to 1999.

ALLOWABLE RENT BOARD FEE COLLECTABLE FROM TENANTS

2022-2023 $29.50 2021-2022 $29.50 2020-2021 $25.00 2019-2020 $25.00 2018-2019 $22.50 2017-2018 $22.50 2016-2017 $20.00 2015-2016 $18.50 2014-2015 $18.00 2013-2014 $14.50 2012-2013 $14.50 2011-2012 $14.50 2010-2011 $14.50 2009-2010 $14.50 2008-2009 $14.50 2007-2008 $13.00 2006-2007 $11.00

2005-2006 $10.00

2004-2005 $11.00

CONTACT THE SAN FRANCISCO RENT BOARD FOR MORE INFORMATION 415-252-4600 sfgov.org/rentboard

SFAA’S TENANT SCREENING SERVICE

THROUGH INTELLIRENT

STEP 1: Create a free account at sfaa. myintellirent.com/agent-signup

STEP 2: Invite an applicant to apply via an online application customized to SFAA’s criteria. You can also publish your available rental on Intellirent across mulitple ILSs.

RATES

Intellirent is your free, online rental application and property marketing tool, partnered with Transunion to instantly return complete credit reports and nationwide eviction notices. Renters pay the $40 application fee, which covers your costs.

For more information, simply create your free account or go to sfaa.org and choose the “Resources” tab. Then select “Tenant Screening.”

Please note that the maximum you can charge a tenant for screening services is $49.12.

CONTACT INTELLIRENT FOR MORE INFORMATION: 415-849-4400

join online at sfaa.org or call 415.255.2288

CAPITAL IMPROVEMENTS

The capital improvement interest rates for 3/1/22 through 2/28/23 are listed below:

AMORTIZATION INT. RATE MULTIPLIER

7 YEARS 1.1% .01237

10 YEARS 1.4% .00894

15 YEARS 1.7% .00630

20 YEARS 1.9% .00501

INTEREST ON DEPOSITS

Deposits include all tenant monies that the owner holds, regardless of what they are called. At the landlord’s option, the payment may be made directly to the tenant or by allowing the tenant to deduct the amount of interest due from the rental payment.

INTEREST ON DEPOSITS PERIOD AMOUNT

03/01/22 - 02/28/23 0.1%

03/01/21 - 02/28/22 0.6%

03/01/20 - 02/28/21 2.2%

03/01/19 - 02/29/20 2.2%

03/01/18 - 02/28/19 1.2%

03/01/17 - 02/28/18 0.6%

03/01/16 - 02/28/17 0.2%

03/01/15 - 02/29/16 0.1%

03/01/14 - 02/28/15 0.3%

03/01/13 - 02/28/14 0.4%

03/01/12 - 02/28/13 0.4%

03/01/11 - 02/29/12 0.4%

03/01/10 - 02/28/11 0.9%

03/01/09 - 02/28/10 3.1%

03/01/08 - 02/28/09 5.2%

03/01/07 - 02/29/08 5.2%

ALLOWABLE RENT INCREASES

2023 - 2024: 3.6%

Effective March 1, 2022, through February 28, 2023, the allowable annual rent increase is 2.3 %. This amount is based on 60% of the increase in the Consumer Price Index for all urban consumers in the Bay Area. A history of all allowable increases and their effective periods is provided.

ALLOWABLE RENT INCREASES PERIOD AMOUNT

03/01/23 - 02/29/24 3.6%

03/01/22 - 02/28/23 2.3%

03/01/21 - 02/28/22 .7%

03/01/20 - 02/28/21 1.8%

03/01/19 - 02/29/20 2.6%

03/01/18 - 02/28/19 1.6%

03/01/17 - 02/28/18 2.2%

03/01/16 - 02/29/17 1.6%

03/01/15 - 02/29/16 1.9%

03/01/14 - 02/28/15 1.0%

03/01/13 - 02/28/14 1.9% 03/01/12 - 02/28/13 1.9%

03/01/11 - 02/29/12 0.5%

03/01/10 - 02/28/11 0.1%

03/01/09 - 02/28/10 2.2%

03/01/08 - 02/28/09 2.0%

03/01/07 - 02/29/08 1.5% 03/01/06 - 02/28/07 1.7%

SAN FRANCISCO RENT BOARD

25 Van Ness Avenue #320 San Francisco, CA 94102 415-252-4600 www.sfgov.org/rentboard

SFAA Professional Services Directory

1031 TAX DEFERRED EXCHANGE SERVICES

LAWYERS EQUITY EXCHANGE

Brian Fogarty 415-701-1234 www.lex1031.com

SEQUENT

Eric Scaff 415-834-1031 sequent-rewm.com escaff@sequent-rewm.com

ACCOUNTANTS

SHWIFF, LEVY & POLO LLP

Elizabeth Shwiff 415-291-8600 x232 www.slpconsults.com

ALARM COMPANY

AEC ALARMS

Stephanie Chen 408-298-8888 Ext: 121 sc36@aec-alarms.com

ARCHITECTURE

OPENSCOPE STUDIO ARCHITECTS Mark Hogan 415-891-0954 www.openscopestudio.com

Q ARCHITECTURE

Dawn Ma 415-695-2700 www.que-arch.com

ASSOCIATIONS

PROFESSIONAL PROPERTY MANAGEMENT ASSOCIATION Renee A. Engelen www.ppmaofsf.org renee@hrhrealestate.com

ATTORNEYS

BARTH CALDERON, LLP

Paul Hitchcock 415-577-4685 Paul@barthattorneys.com

BORNSTEIN LAW

Daniel Bornstein, Esq. 415-409-7611 www.bornstein.law

CHONG LAW

Dolores Chong 415-437-7807 chongdolores@earthlink.net

DOWLING & MARQUEZ, LLP Jak S. Marquez 415-977-0444 x232 www.dowlingmarquez.com

FRANK KIM ESQ., EVICTION ASSISTANCE

Jo Biel 415-752-6070

KIMBALL, TIREY & ST. JOHN LLP Kelli Dodson 800-525-1690 kelli.dodson@kts-law.com www.kts-law.com

FRIED, WILLIAMS & GRICE CONNOR

Clifford E. Fried 415-421-0100 www.friedwilliams.com

HERZIG & BERLESE Barbara Herzig 415-861-8800 bherzig@hbcondolaw.com ILENE M. HOCHSTEIN, ATTORNEY AT LAW Ilene Hochstein 650-877-8288 ilene@hochsteinlaw.net

KAUFMAN, DOLOWICH, VOLUCK Ashley Klein 415-926-7612 aklein@kdvlaw.com

LAW OFFICES OF DENISE A. LEADBETTER Denise Leadbetter 415-713-8680 www.leadbetterlaw.com

LAW OFFICE OF MICHAEL HEATH Michael Heath 415-931-4207 Mheath_law@sbcglobal.net

LAW OFFICES OF SCOTT T. OKAMOTO Scott T. Okamoto 415-766-5871 www.scottokamotolaw.com

LAW OFFICES OF DANIEL PICCININI Daniel Piccinini 415-345-8610 danielpiccinini@att.net

LAW OFFICE OF JULIANA E. PISANI Juliana Pisani 415-800-7562 Juliana@jpisanilaw.com

LAW OFFICES OF LAWRENCE M. SCANCARELLI Lawrence M. Scancarelli 415-398-1644 www.sfrealestatelaw.com

THE LAW OFFICE OF ED SINGER Edward Singer 650-393-5862 www.edsinger.net

LORBER, GREENFIELD & POLITO, LLP Wakako Uritani 415-986-0688 wuritani@lorberlaw.com

MASTROMONACO REAL PROPERTY LAW GROUP Leonard Mastromonaco 415-354-2702 len@mastrolawgroup.com

MCLAUGHLIN SANCHEZ, LLP Michael McLaughlin 415-655-9753 www.msllp.law

NIVEN & SMITH Leo M. LaRocca 415-981-5451 leo@nivensmith.com

REUBEN, JUNIUS & ROSE, LLP Kevin Rose 415-567-9000 www.reubenlaw.com

SHEPPARD-UZIEL LAW FIRM

Jaime Uziel 415-296-0900 ju@sheppardlaw.com

STEVEN ADAIR MACDONALD & ASSOCIATES, PC Steven Adair MacDonald 415-956-6488 www.samlaw.net sam@samlaw.net

WASSERMAN

Dave Wasserman 415-567-9600 Dave@wassermanoffices.com www.davewassermansf.com

WIEGEL LAW GROUP Andrew J. Wiegel 415-552-8230 www.wiegellawgroup.com

ZACKS, FREEDMAN & PATTERSON, P.C. Andrew M. Zacks 415-956-8100 www.zfplaw.com

ZANGHI TORRES ARSHAWSKY, LLP John P. Zanghi 415-977-0444 www.zatlaw.com

BEDBUG DETECTION

CROWN & SHIELD PEST SOLUTIONS-PREMIER Aurora Garcia-Vidaca 415-893-9551 www.crownandshieldpestsolutions.com

PREMIER CANINE DETECTION Jordan Garcia 415-612-6645 www.premiercaninedectection.com

COMMERCIAL/RETAIL LEASING SERVICES

BLATTEIS REALTY CO. David Blatteis 415-981-2844 www.sfretail.net

CONSULTANTS: PERMITS & PLANNING

EDRINGTON AND ASSOCIATES Steven Edrington 510-749-4880 steve@edringtonandassociates.com

CONTRACTORS

DECK & BALCONY INSPECTIONS, INC. Dan Cronk 916-548-6943 dan@deckandbalconyinspections.com

CORPORATE RENTALS

AMSI

Robb Fleischer 415-447-2020 www.amsires.com

CREDIT REPORTING

INTELLIRENT

Cassandra Joachim 415-849-4400 www.myintellirent.com

DRAIN SERVICES

PRIBUSS ENGINEERING, INC. Selina Pribuss 650-588-0447 selina.p@pribuss.com www.pribuss.com

EMERGENCY SERVICES

THE GREENSPAN CO./

ADJUSTERS INTERNATIONAL Rebecca Holloway 707-540-5584 rebecca@greenspan-ai.com

ENERGY SERVICES

ARMADA POWER DavidMyers 614-918-7493 dmyers@armadapower.com

ENVIRONMENTAL CONSULTING

P.W. STEPHENS ENVIRONMENTAL Sheri Buenz 510-651-9506 sherib@pwsei.com

FIRE ESCAPE INSPECTION & MAINTENANCE

ESCAPE ARTISTS

Jabal Engelhard 415-279-6113 www.sfescapeartists.com

GREAT ESCAPE SERVICES

Rich Henderson 415-566-1479 www.greatescapeservice.com

FIRE PROTECTION CONTRACTORS

AEC ALARMS 408-298-8888 Ext: 121 SFfire@aec-alarms.com

BATTALION ONE FIRE PROTECTION Tim Morse 510-653-8075 www.battaliononefire.com

COMMERCIAL FIRE PROTECTION, INC. Laine Sims 925-300-9534 www.fireprotected.com

EMERGENCY SYSTEMS, INC. Eric Hagerman 415-564-0400 esmfire@earthlink.net

PRIBUSS ENGINEERING, INC. Selina Pribuss 650-588-0447 selina.p@pribuss.com www.pribuss.com

GARBAGE COLLECTION SERVICES

RECOLOGY GOLDEN GATE RECYCLING Minna Tao 415-575-2423 recologysf.com

RECOLOGY SUNSET SCAVENGER

Dan Negron 415-330-2911 recologysf.com

VALET LIVING

Briana Sellers 813-613-5073 briana.sellers@valetliving.com www.valetliving.com

INSURANCE COMPANIES

ARM MULTI INSURANCE SERVICES

Lisa Isom 866-913-6293 www.arm-i.com

BARBARY INSURANCE BROKERAGE Gerald Becerra 415-788-4700 www.barbaryinsurance.com

COMMERCIAL COVERAGE

INSURANCE AGENCY

Paul Tradelius 415-436-9800 www.comcov.com

GORDON ASSOCIATES INSURANCE SERVICES

Dave Gordon, CLU 650-654-5555x6972 David.gordon@gordoninsurance.com

INTERNET SERVICES PROVIDERS

COMCAST/XFINITY

Michael Juliano 925-495-9922 www.xfinity.com

LENDING / FINANCIAL SERVICES

FIRST FOUNDATION BANK Michelle Li 415-794-2176 www.ff-inc.com

LENDING / FULL SERVICE BANKS

LUTHER BURBANK SAVINGS

Gabriel Basso 510-601-2400 www.lutherburbanksavings.com

LENDING / INSTITUTIONS

CHASE COMMERCIAL TERM LENDING

Sharon Groenendyk 415-315-8464 www.chase.com/commercialbanking

LOCKSMITHS

CROWN LOCK & HARDWARE Joe Schoepp 415-221-9086

MAINTENANCE REPAIR SERVICE

MAVEN MAINTENANCE, INC. Craig Lipton 415-829-2207 www.mavenmaintenance.com

OGREENA

Christopher Sheilds 510-899-0238 jenniferbenassi@ogreena.com

WEST COAST PROPERTY MANAGEMENT Joseph Keng 415-885-6970 ext. 101 www.wcpm.com

MEDIATION

THE BAR ASSOCIATION OF SAN FRANCISCO CONFLICT INTERVENTION SERVICE

Scott Goering 415-782-8940 sgoering@sfbar.org

PACKAGE SERVICE

FETCH

Dan Beary 978-503-9540 dbeary@fetchpackage.com

PAINTING CONTRACTORS

KRUITPAINTING, INC. Pieter Kruit 415-254-7818 www.kruitpainting.com

PAC WEST PAINTING INC. Brian Beaulieu 415-457-0724 www.pacwestpaintinginc.com

PETERS PAINTING SERVICES

Peter Pantazelos 415-647-4722 www.peterspainting.com

TARA PRO PAINTING INC. Brian Layden 415-822-2011 www.tarapropainting.com

PAINTING SUPPLIES

DUNN-EDWARDS PAINTS

Daniela Franco 415-656-9951 daniela.franco@dunnedwards.com

PEST CONTROL

ATCO PEST & TERMITE CONTROL & HOME RESTORATION

Richard Estrada 415-898-2282 www.atcopestcontrol.com

CROWN & SHIELD PEST SOLUTIONS-PREMIER

Aurora Garcia-Vidaca 415-893-9551 www.crownandshieldpestsolutions.com

PLUMBING & HEATING

C.R. REICHEL ENGINEERING CO. INC. Tim Lordier 415-431-7100 www.crreichel.com

PRIBUSS ENGINEERING, INC. Selina Pribuss 650-588-0447 selina.p@pribuss.com www.pribuss.com

R & L PLUMBING

Larry Bustillos 415- 651-4977 larry@rl.plumbing www.rlplumbingsanfrancisco.com

URGENT ROOTER AND PLUMBING INC. Albert Lee 415-387-8163 urgentrtr@sbcglobal.net

PROJECT MANAGEMENT

MELGAR REAL ESTATE SERVICES Suzy Melgar 650-745-8186 info@mresbayareahomes.com

PROPERTY MANAGEMENT

2B LIVING Brooks Baskin 650-763-8552 brooks@twobliving.com www.twobliving.com

ABACUS PROPERTY MANAGEMENT

Timothy Cannon 415-841-2105 tim@sanfranrealestate.com www.abacuspropertymanagement.com

ADVENT PROPERTIES, INC. Benjamin Scott, CCRM 510-289-1184 www.adventpropertiesinc.com

ALEXANDERSON PROPERTIES Eric Alexanderson 415-285-3737 www.alexandersonproperties.com

AMORE REAL ESTATE, INC

Jerry Hsieh 415-567-4800 www.amoresf.com

ANCHOR REALTY Mark Campana 415-621-2700 mark@anchorealtyinc.com www.anchorealtyinc.com

ARTAL PROPERTIES

John Artal 415-647-4400 artalproperties@gmail.com www.artalproperties.com

BARBAGELATA REAL ESTATE COMPANY

Paul Barbagelata 415-566-1112 paulb@realestatesf.com adminteam@realestate.com

BAY PROPERTY GROUP Anna Katz 510-836-0110 anna@baypropertygroup.com www.baypropertygroup.com

BAYVIEW PROPERTY MANAGERS

James Blanding 415-822-8793 xt.4 bayview60@comcast.net www.bayviewpropertymanagers.com

BEAM PROPERTIES, INC.

Darius Chan 415-254-8679 darius@sfbeam.com

BLVD RESIDENTIAL Debbie Brackett 650-328-5050 dbrackett@blvdresidential.com www.blvdresidential.com

BROOKFIELD PROPERTY GROUPPRESIDIO LANDMARK Jon King 855-327-5376 jon.king@brookfieldproperties.com

CITYWIDE PROPERTY MANAGEMENT

Carol Cosgrove 415-552-7300 www.citywidesf.com

DEWOLF REALTY CO. INC. William A. Talmage 415-221-2032 www.dewolfsf.com

EBALDC

Felicia Scruggs 510-287-5353 FScruggs@ebaldc.org

EMBC

Nancy Wong 707-584-5123 www.ebmc.com nancywong@ebmc.com

EQUITY ONE

Brenda M. Obra 415-441-1200 www.equity1sf.com

GAETANI REAL ESTATE

Paul Gaetani 415-668-1202 www.gaetanirealestate.com

GEORGE GOODWIN REALTY, INC. Chris Galassi 415-681-1265 www.goodwin-realty.com

GREENTREE PROPERTY MANAGEMENT

Scott Moore 415-828-8757 www.greentreepmco.com

GM GREEN REAL ESTATE INC. George Green 415-608-6485 ggreen@gmgreen.com www.gmgreen.com

GORDON CLIFFORD PROPERTIES, INC. Patrick Clifford 415-613-7694 patrick@gcpropertiessf.com

HOGAN & VEST INC.

The following members are SFAA Property Management Members. They fully support the organization and are dedicated to SFAA’s goals. For more information about the benefits of becoming a Property Management Member, contact Maria Shea at maria@sfaa.org or 415-255-2288 x 10.

ADVENT PROPERTIES, INC. Benjamin Scott, CCRM 510-289-1184 www.adventpropertiesinc.com

AMSI Robb Fleischer 415-447-2020 www.amsires.com

CECCHINI REALTY CO. Dante Cecchini, CCRM 415-550-8855 www.cecchinirealty.com

CITYWIDE PROPERTY MANAGEMENT Carol Cosgrove 415-552-7300 www.citywidesf.com

DEWOLF William Talmage 415-221-2032 www.dewolfsf.com

GAETANI REAL ESTATE Paul Gaetani 415-668-1202 www.gaetanirealestate.com

GREENTREE PROPERTY MANAGEMENT 415-828-8757 www.greentreepmco.com

HRH REAL ESTATE SERVICES CORPORATION

Renee A. Engelen (415) 810-6020 www.hrhrealestate.com

J. WAVRO PROPERTY MANAGEMENT James Wavro 415-509-3456

LINGSCH REALTY Natalie M. Drees 415-648-1516 www.lingschrealty.com

PAUL LANGLEY COMPANY Misha Langley 415-431-9104 x 301 misha@plco.net

property management members

Simon Wong 415-421-7116 hoganvest.com

PONTAR REAL ESTATE

Merri Pontar 415-421-2877 www.pontarrealestate.com

PROGRESSIVE PROPERTY GROUP Dace Dislere & Joe Gillach 415-515-4329

PROPERTY MANAGEMENT SYSTEMS Michelle L. Horneff-Cohen 415-661-3860 www.propertymanagementsystems.net

REAL MANAGEMENT COMPANY J.J. Panzer 415-821-3167 www.RMCsf.com

S&L REALTY Robert Link 415-386-3111 www.slrealty-sf.com

STRUCTURE PROPERTIES Corey Eckert 415-794-0064 www.structureproperties.com

SUTRO PROPERTY MANAGEMENT, INC. Salman Shariat 415-341-8774 www.sutroproperties.com

VERTEX PROPERTY GROUP Craig Berendt 415-608-3050 vertexsf.com

WEST & PRASZKER REALTORS

Michael Klestoff 415-661-5300 www.wprealtors.com

WEST COAST PROPERTY MANAGEMENT Eric Andresen 415-885-6970 www.wcpm.com

VESTA ASSET MANAGEMENT Paul Griffiths 415-360-9292 x 1 paul@vesta-assetmanagement.com

HRH REAL ESTATE SERVICES CORPORATION Renee A. Engelen 415-810-6020 www.hrhrealestate.com

INCOME PROPERTY SPECIALISTS Clayton Llewellyn 408-446-0848 www.ipsmanagement.cc

JACKSON GROUP PROPERTY MANGEMENT, INC. Raymond Scarabosio 415-608-8300 ray@jacksongroup.net

JAMES D. MULLIN REAL ESTATE BROKER James D. Mullin 415-470-0450 jamesdmullinre@gmail.com

JD MANAGEMENT GROUP, INC. Jonathan Davis 510-387-7792 jonathan.davis@jdmginc.com

LINGSCH REALTY Natalie M. Dress 415-648-1516 www.lingschrealty.com

MERIDIAN MANAGEMENT GROUP

Randall Chapman 415-434-9700 www.mmgprop.com

MLCSPACES, INC.

Naeem Farhokhnia 415-273-9861 naeem@mlcspaces.com

MYND MANAGEMENT, INC.

Stacy Winship 510-306-4440 www.mynd.co

NEW GENERATION INVESTMENTS

Jonathan Ng 415-735-8233 jtng.ngi@gmail.com

OPEN WORLD PROPERTIES Jonathan Daryl Fleming 510-250-0946 jonathan@openworldproperties.com www.Openworldproperties.Com

PAUL LANGLEY COMPANY

Misha Langley 415-431-9104 x 301 misha@plco.net

PILLAR CAPITAL REAL ESTATE

Jonathan Ng 415-885-9584 jonathan@thepillarcapital.com

PONTAR REAL ESTATE

Merri Pontar 415-421-2877 www.pontarrealestate.com

PRIME METROPOLIS PROPERTIES, INC. Tom Chan 415-731-0303 tomchan@pmp1988.com

PROEQUITYAM

Frank Bumbalo 415-531-2669 frank@proequityam.com

PROGRESSIVE PROPERTY GROUP

Dace Dislere 415-794-9727 www.progressivesf.com

PROPERTY MANAGEMENT SYSTEMS

Michelle L. Horneff-Cohen, Broker, CCRM, MPM®, RMP® 415-661-3860 www.propertymanagementsystems.net

RAMSEY PROPERTIES

Brian E. Ramsey 415-474-5175 Brian@RamseyPropertiesSF.com

REAL MANAGEMENT COMPANY

J.J. Panzer 415-821-3167 www.RMCsf.com

ROCKAWAY RESIDENTIAL MANAGEMENT Kristine Abbey 650-290-3084 www.rockawayresidential.com

ROCKWELL PROPERTIES

Mark Kaplan 415-398-2400 propertymanagement@rockwellproperties.com

RNB PROPERTY MANAGEMENTGOLDEN GATE

Kaveh Gorgani 415-413-3827 kaveh@rnbemail.com www.rnbgoldengate.com

SAN FRANCISCO RENTAL CONCIERGE Danielle Mahoney 415-532-0041 danielle@sfrentalconcierge.com www.sfrentalconcierge.com

SHAREVEST PROPERTY MANAGEMENT, LLC Timothy D. Gilmartin 650-347-2020 tim@thegilmartins.com

SIGNATURE REALTY PROPERTY MANAGEMENT

Paul Montalvo 650-364-3167 paul@paulmontalvo.com

SIERRA PROPERTY PROFESSIONALS Sonali Herrera sierrappinc@gmail.com

SKYLINE PMG, INC. Nicholas Bowers 415-968-9903 Nicholas@skylinepmg.com

STRUCTURE PROPERTIES

Corey Eckert 415-794-0064 www.structureproperties.com

SUTRO PROPERTY MANAGEMENT, INC. Salman Shariat 415-341-8774 www.SutroProperties.com

W. PROPERTY MANAGEMENT

Gary Petrison 707-545-6187 gary@wpropertymanagement.com

WEST COAST PROPERTY MANAGEMENT

Eric Andresen 415-885-6970 www.wcpm.com

WEST & PRASZKER REALTORS Michael Klestoff 415-699-3266 www.wprealtors.com

VERTEX PROPERTIESS

Craig Berendt 415-608-3050 craig.berendt@gmail.com

YMPG

Yelena Gelzer 415-260-6325 yglezer@ympg-management.com

PROPERTY MANAGEMENT SOFTWARE

HEMLANE, INC. Dana Dunford 385-355-4361 dana@hemlane.com

PROPERTY ATLAS Serina Calhoun 415-922-0200 serina@mypropertyatlas.com

YARDI

Kelly Krier 805-699-2040 kelly.krier@yardi.com

REAL ESTATE APPRAISALS

MARK WATTS COMMERCIAL APPRAISAL Mark Watts 415-990-0025 www.markwattscommercialappraisal.com

REAL ESTATE BROKERS & AGENTS

ALAIN PINEL INVESTMENT GROUP Mirella Webb 415-814-6699 mwebb@apr.com

BERKSHIRE HATHAWAY FRANCISCAN PROPERTIES Edward Milestone 415-994-5969 MilestoneRealEstateSF@gmail.com

CHUCK & ASSOCIATES

Kevin Chuck 415-595-5832 chuckassoc@gmail.com

COLDWELL BANKER COMMERCIAL NRT Steven Caravelli 415-229-1367 steven.caravelli@cbnorcal.com

COLLIERS INTERNATIONAL- JAMES DEVINCENTI James Devincenti 415-288-7848 www.THEDLTEAM.com

COLLIERS INTERNATIONAL Payam Nejad 415-288-7872 www.colliers.com/payam.nejad

COMPASS COMMERCIAL BROKERAGE John Antonini 415-794-9510 john@antoninisf.com

COMPASS COMMERCIAL BROKERAGE Chris J. Connor chris.oconnor@compass.com

COMPASS COMMERCIAL BROKERAGE Adam Filly 415-516-9843 adam@adamfilly.com

COMPASS COMMERCIAL BROKERAGE John Kirkpatrick 425-412-0559 john.kirkpatrick@compass.com www.johnkirkpatrick.com

COMPASS COMMERCIAL BROKERAGE Jay Greenberg 415-378-6755 jay@jayhgreenberg.com

CORCORAN GLOBAL LIVING COMMERCIAL Terrence Jones 415-786-2216 terrence@terrencejonesSF.com www.terrencejones.com

FERRIGNO REAL ESTATE

Chris Ferrigno 415-641-0661 www.ferrignorealestate.com

HRH REAL ESTATE SERVICES CORPORATION Renee A. Engelen 415-810-6020 www.hrhrealestate.com

ICON REAL ESTATE INC. Jason Quashnofsky 415-370-7077 jason@iconsf.com

JHG415, INC. Jay Greenberg 415-378-6755 jay@jayhgreenberg.com

KENNEY & EVEREST REAL ESTATE, INC. Everest Mwamba 415-902-3411 maureen@kenneyrealestate.com

KILBY STENKAMP-VANGUARD PROPERTIES Kilby Stenkamp 415-370-7582

LESLIE BURNLEY

Leslie Burnley 415-717-8709 leslie.j.burnley@gmail.com leslieburnley.com

MARCUS & MILLICHAP

Sanford Skeie 415-625-2153 www.marcusmillichap.com

MAVEN PROPERTIES

Matthew Sheridan matt@mavenproperties.com

MORGAN REAL ESTATE ADVISORS, INC. Laurence Morgan 415-300-6503 laurence@morganrealestateadvisor.com www.morganrealestateadvisor.com

S&L REALTY Robert Link 415-386-3111 www.slrealty-sf.com

STEELE PROPERTIES Ryan Steele 415-881-7762 ryan@steeleproperties.com www.steeleproperties.com

WEST & PRASZKER REALTORS

Michael Klestoff 415-312-2245 klestoffmre@aol.com

VANGUARD COMMERCIAL Allison Chapleau 415-516-0648 allison@allisonchapleau.com www.allisonchapleau.com

ZEPHYR REAL ESTATE Dawn Cusulos 415-678-8854 dawncusulos@zephyrre.com

REAL ESTATE INVESTMENTS

CITY REAL ESTATE

Arthur Tom 415-987-6788 art@cityrealestatesf.com cityrealestatesf.com

COMPASS COMMERCIAL BROKERAGE

Trigg Splenda 415-593-8616

KENNEY & EVEREST REAL ESTATE, INC. Everest Mwamba 415-902-3411 maureen@kenneyrealestate.com

MARCUS MILLICHAP Clinton C. Textor III 415-425-9123 www.marcusmillichap.com

REFINISHING / RESURFACING SERVICE

MIRACLE METHOD OF SAN FRANCISCO Claire Gray 415-673-4211 www.miraclemethod.com

RENT BOARD PETITIONS

PROPERTY MANAGEMENT SYSTEMS

Michelle L. Horneff-Cohen 415-661-3860 www.propertymanagementsystems.net

REAL MANAGEMENT COMPANY Melinda Greene 415-230-8895 www.RMCsf.com

RENT BOARD PASSTHROUGHS Kim Boyd Bermingham 415-333-8005 www.rentboardpass.com

RENTAL LISTING SERVICES

COSTAR

Aj Herlitz 844-459-1495 www.costargroup.com aherlitz@costar.com

HRH REAL ESTATE SERVICES CORPORATION Renee A. Engelen 415-810-6020 www.hrhrealestate.com

REALPAGE Stacey Blackwell 972-820-3015 stacey.blackwell@realpage.com www.realpage.com

ZUMPER, INC. Connor Hodges 949-702-1508 connor@zumper.com www.zumper.com

RESIDENTIAL LEASING

GORDON CLIFFORD PROPERTIES, INC. PatrickClifford 415-613-7694 patrick@gcpropertiessf.com

HAMILTON FAMILY CENTER Mayo Lunt 510-763-8540 x230 www.hamiltonfamiles.org

HRH REAL ESTATE SERVICES CORPORATION Renee A. Engelen 415-810-6020 www.hrhrealestate.com

J. WAVRO ASSOCIATES James Wavro 415-509-3456 www.jwavro.com

KENNEY AND EVEREST REAL ESTATE, INC. Maureen Kenney 415-929-0717 maureen@kenneyrealestate.com

LINGSCH REALTY

Natalie M. Drees 415-648-1516 www.lingschrealty.com

RELISTO

Eric Baird 415-236-6116, x101 www.relisto.com eric@relisto.com

RENTALS IN S.F. Jackie Tom 415-409-3263 www.rentalsinsf.com

RENTSFNOW Claussen 415-762-0213 kclaussen@veritasinv.com

STRUCTURE PROPERTIES

Corey Eckert 415-794-0064 www.structureproperties.com

VERTEX PROPERTIES Craig Berendt 415-608-3050 www.berendtproperties.com

ROOFING

AGUILERA CONSTRUCTION & ROOFING Javier Aguilera 707-495-3932 javier@aguileraco.com

SECURITY

ADT SECURITY MULTIFAMILY Jeanette Mendez 817-776-0301 jjmendez@adt.com

SEISMIC RETROFIT & STRUCTURAL ENGINEERING

BAI CONSTRUCTION

Behnam Afshar 510-595-1994, x101 www.baiconstruction.com

W. CHARLES PERRY

Charles Perry 650-638-9546 www.wcharlesperry.com

WEST COAST PREMIER CONSTRUCTION, INC.

Homy Sikaroudi, PhD, PE 510-271-0950 www.wcpc-inc.com

STAFFING

BG MULTI-FAMILY Shannon Valentino 714-654-9498 svalentino@bgmultifamily.com

SUBMETERS

LIVABLE

Daniel Sharabi 415-937-7283 www.livable.com

TENANT PLACEMENT & LISTING

CAZERIA, INC

Julia D’Antonio 415-754-5373 julia@cazeira.com

STRUCTURE PROPERTIES

Corey Eckert 415-794-0064 www.structureproperties.com

WATER CONSERVATION SERVICE

SF PUBLIC UTILITIES COMMISSION

Chandra Johnson 415-554-0704 www.conserve.sfwater.org

WATER DAMAGE SERVICE

FIRE AND WATER DAMAGE RECOVERY

Maria Neumann 800-886-1801 www.waterdamagerecovery.net

WATERPROOFING

KELLEY PAINTING AND WATERPROOFING

Mitchell Kelley 415-847-7883 www.kelleypaintingandwaterproofing.com

Please note that acceptance of associate membership does not necessarily constitute any endorsement or recommendation, express or implied, of the associate member or any goods or services offered.

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NEED A PROFESSIONAL CONTRACTOR OR VENDOR?

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ALARM COMPANIES

AEC Alarms 27

ARCHITECTURE & DESIGN SERVICES Openscope Studio 39

ATTORNEYS

Fried, Williams & Grice Conner LLP 43 Koster & Leadbetter, LLP 39 Zacks, Freedman & Patterson, PC 59

CONTRACTORS

Pribuss Engineering, Inc. 53

FIRE ESCAPE CONTRACTORS Great Escape Fire Escape 53

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Colores Painting 53 Kruit Painting 52 Pac West Painting 60

PETITION SERVICES Rent Board Passthroughs 58

PROPERTY MANAGEMENT & MAINTENANCE & RESIDENTIAL LEASING

Gaetani Real Estate, Inc. 64 Maven Maintenance 31

MLC Spaces 37

Real Management Company 59 Rentals in SF 54 Vertex Properties 6 West Coast Property Management 54

PROPERTY MANAGEMENT SOFTWARE Yardi Breeze 19

REAL ESTATE BROKERS

Amore Real Estate 52

Coldwell Banker Commercial / Caravelli 35

Coldwell Banker Commercial / McGue 13

Colliers / Devincenti 2

Compass / Antonini 63

Compass / Bonn & Webb 17

Compass / Filly 11

Compass / Greenberg & Splenda 3

Compass 29

HRH Real Estate 55

Kay Properties 15

Marcus & Millichap 32-33

Maven Multifamily 23

Vanguard Commercial / Chapleau 9 Vanguard Properties / Stack 36

UTILITIES BILLING SERVICES Livable 43

Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by SFAA, express or implied, of the advertiser or any goods or services offered.

Ellis Act Limitations

AB 2050 by Assemblymember Alex Lee (D-San Jose) would have prevented many rental housing providers from using the Ellis Act to terminate tenancies to exit the rental market until all owners of the property have owned their interest for at least five years.

A second Ellis Act bill took aim at “tenancies in common” (TICs). After using the Ellis Act and taking the units off the rental market, some owners convert their properties into TICs. This option allows the owners to move in, along with other family members or individuals, with each party occupying a unit as their own. AB 2386 by Assemblymember Richard Bloom (DSanta Monica) sought to restrict this type of housing by allowing cities and counties to regulate how owners hold former rental properties after converting them to ownership housing.

Summary

CAA prevented a myriad of damaging proposals from becoming law in 2022. However, we anticipate that legislators will again introduce these proposals in 2023.

Visit caanet.org to stay on top of legislative developments affecting the rental housing industry and how you can assist in defeating these measures in 2023.

While this article covers some of the most controversial landlord-tenant bills, many pro-housing bills supported by CAA were also signed into law. For a complete list of rental-housing-related legislation taking effect next year, visit caanet.org and go to the Advocacy section.

Debra L. Carlton is the California Apartment Association’s Vice President of State Public Affairs.

Landlord & Leasing Agent, A Winning Combo.

Having over 25 rental units of her own, Jackie brings rst-hand experience as a landlord to all of our Rentals In S.F. clients.

Every day, our team endeavors to nd quali ed tenants for our clients. With an expert understanding of the ever changing San Francisco rental market, we have made it our priority to ll your vacant unit quickly, e ortlessly, at market rent and with your ideal tenant!

With just one phone call, Jackie will come over to access your needs, appraise your unit, and do all the marketing, prospecting and screening. We then present you with a quali ed tenant ready to move in.

Call Jackie at Rentals In S.F. to ll your vacancy. It will be one of the best calls you’ll ever make. Just ask all our clients!

Former SFAA winner

* Leasing Agent of the Year

* Landlord of the Year

C

Ways to Connect.

Email SFAA at MemberQuestions@sfaa.org to have your questions and concerns promptly addressed, or call the office at 415-255-2288. You can also follow the happenings of your fellow SFAA members and find out the latest in the industry by connecting with SFAA on Facebook. Search “San Francisco Apartment Association” and “Like” it to add it to your news feed. Follow SFAA on Twitter at twitter.com/SFAptAssoc

• New sfaa.org website launched!

• Email SFAA at MemberQuestions@sfaa.org

• Connect with SFAA on Facebook

• Follow SFAA on Twitter at twitter.com/SFAptAssoc

Air Quality Element

Policy 3.3: Continue existing city policies that require housing development in conjunction with office development and expand this requirement to other types of commercial and large institutional developments.

The intent is to require large institutional employers that aren’t currently subject to the City’s Jobs-Housing Linkage Fee to conduct an analysis of the housing demand of their employees and then show how they will meet that demand in their Institutional Master Plans (IMP). It could also pave the path for extending the JHLF to large noninstitutional uses that are not currently subject to it (hospitals/schools/etc.).

In a bit of revisionist history, the Planning Department notes that the IMP caused colleges to realize the housing needs of their students, and credits that as causing many private non-profit colleges to build student housing. In fact, IMPs had nothing to do with colleges building housing.

The need was obvious; in reality, inclusionary housing requirements were too expensive for them to shoulder. It was only when the City exempted student housing from inclusionary requirements that several private schools embarked on ambitious housing construction programs. Non-profit colleges and healthcare providers will find it difficult to grow in San Francisco if the Jobs-Housing Linkage Fee—currently ranging from $26 – $76 per square foot for other uses—is extended to them.

Commerce & Industry Element

Policy 4.5: Control encroachment of incompatible land uses on viable industrial activity. Production, Distribution, and Repair (PDR) areas offer economic opportunity for adjacent neighborhoods, especially for low-income communities and communities of color. PDR businesses can provide stable job opportunities, good wages, and diversity in types of activities and jobs Restrict incompatible land uses, such as housing and office, and the conversion of industrial buildings to

other building types in PDR districts and in areas of concentrated PDR, construction, or utility activities.

In mixed-use districts or areas adjacent to PDR districts, avoid the displacement of existing businesses, protect the affordability of PDR space, and, if displacement is unavoidable, replace some or all the PDR use with viable, affordable industrial space on-site or off-site in a PDR district.

This revised language paves the way for the City to adopt additional restrictions on the types of uses permitted in PDR districts—specifically the conversion or new construction of laboratory uses that frequently complement PDR. Engineering labs, for example, often need PDR to supply parts for prototyping, testing, and may well grow into small-scale manufacturing (PDR) uses themselves. This flexibility has served both PDR and lab uses well. How is a policy that replaces synergy with inflexibility good for the City? Why is industrial protection in districts where housing is not even permitted a “conforming” amendment to the General Plan?

Even more ironically, this policy amendment sets the stage to say “no” to housing in the very areas that have been most successful at producing it: rezoned PDR areas accounted for roughly three-fourths of housing production by striking a balance between preserving space for industry and allowing much higher residential density. Proposition X made it harder to build housing in certain districts by requiring replacement space. However, this policy could reach much further and set up yet another restriction on housing in favor of preserving industrial space. The Update is supposed to remove barriers to housing. This one fails that test.

A full list of the General Plan updates proposed in connection with the Housing Element Update is available on the Planning Department’s: sfhousingelement.org

The full Housing Element Update is anticipated for adoption by the Planning Commission on December 15, 2022, and Board of Supervisors in January 2023.

Prevent Fires.

Tape and Bag Lithium Batteries

What should you do with old lithium batteries? A big part of the answer is clear tape. Old lithium batteries may no longer have the power to run devices, but they can still release energy though their contact points. Lithium batteries that are not taped can cause fires in collection trucks and recycling facilities, and harm workers.

• Place clear tape over the contact points of used lithium batteries.

• Put taped lithium batteries in a clear plastic bag, and seal it shut.

• Place the bag on top of your landfill bin. Recology will collect the bag, sort the batteries, and safely ship them to companies that specialize in battery recycling.

What

Need to Know

sfaa sfaa 2023

The above content was written by Reuben, Junius & Rose Attorneys Melinda Sarjapur and Daniel Frattin and reprinted with permission.

SFAA Updates

SFAA Office Reopening Status: As the SFAA pivots to a hybrid in-office work model, members are welcome to make an appointment to visit the office with questions. However, please refrain from coming in person if you have tested positive for, were exposed to, or have symptoms of COVID-19.

UPCOMING CLASSES

During the pandemic, the monthly SFAA member meetings and classes will be held virtually. For member meeting topics and schedules, go to www.sfaa.org. For a list of virtual SFAA classes, turn to the calendar on page 44.

SFAA OFFICE CLOSURE

As the SFAA continues a hybrid in-office work model, members are welcome to make an appointment. However, please refrain from coming in person if you have tested positive for, were exposed to, or have symptoms of COVID-19. The best way to have your questions answered is through email at MemberQuestions@sfaa.org

The best way to have your questions answered is through email: MemberQuestions@sfaa.org. And just a friendly reminder, timely payment of membership dues is the best way to help the association help you.

SFAA Member Meetings: The first in-person member meeting since the 2020 shelterin-place is scheduled! Mark your calendars for March 15, 2023.

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Robert Little’s practice focuses on real estate litigation, including challenges to local ordinances and administrative decisions, landlord/tenant disputes, property rights, and land use. Robert received a J.D. and M.B.A. dual degree from the University of Wyoming, where he focused on environmental and business law.

601 Montgomery Street, Suite 400, San Francisco, CA 94111 www.zfplaw.com

Zacks, Freedman & Patterson, PC – one of the Bay Area’s leading real estate law firms – is proud to announce the addition of three new attorneys to our team.

Laura Strazzo Attorney at Law California Coastal subdivisions, commercial and residential fore planning commissions, city councils,

Brian O’Neill Attorney at Law

Robert Little Attorney at Law

Q. Our doorman did not allow a tenant’s guest to enter the building with a dog. The tenant’s guest has filed a fair housing complaint against me. Is this legal?

A. These days, we hear a lot of stories of people both in public and private spaces relying on fair housing and disability protection laws to bring their pets into accommodations. While the federal Fair Housing Act (FHA) and California Fair Employment and Housing Act (FEHA) afford very broad rights to animal owners, these rights are not unlimited. On the assumption that: your building has a no-pets policy; that the tenant’s guest’s dog was not a service animal (like a seeing-eye dog); and that the tenant’s guest is claiming they should have been allowed to deviate from the no pets policy, the short answer is that you can enforce the no-pets policy, subject to certain exclusions for reasonable accommodations.

A disabled tenant, prospective tenant, or even a family member or friend of a tenant or prospective tenant may request a reasonable accommodation of a landlord’s rules, regulations, or policies at any time. Disability is defined very broadly as a physical or mental impairment that substantially limits one or more major life activities. A request can be made in any form. You may only ask for verification of the disability if it is not obvious or visible and you do not have prior knowledge of the disability. Verification does not need to be from a doctor—a therapist, nurse, or social worker is sufficient. If it is not obvious, you can also ask how the requested accommodation would alleviate the person’s particular disability.

A request can only be denied if the request was not made by or on behalf of a person with a disability; if there is no disabilityrelated need for the accommodation; or if the accommodation requested is not reasonable. You are required to either grant or deny the request in a reasonable amount of time, and failure to respond constitutes a denial of the request. However, a requestor is not entitled to an immediate response.

In general, courts are very liberal when it comes to allowing comfort or companion animals. It is nearly impossible to deny a request for a companion animal without risking liability for housing discrimination.

But, landlords are not responsible for granting accommodations not requested, and they are not required to grant accommodations not requested for the tenant’s or applicant’s benefit. If the dog were brought to the property for the tenant’s benefit— say, for therapy—then you’d be required to permit the dog, and if the tenant also requested a reasonable accommodation to permit the dog, you’d risk liability for refusal to allow the dog in the building. You are required by law to accommodate your tenants’ disabilities, when requested—however, you are not required to accommodate a tenant’s guest’s disability.

—Shoshana Raphael

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Dave Wasserman is with Wasserman Offices and can be reached at 415567-9600. Shoshana Raphael is with SJR Law Corporation and can be reached at 415-408-6044.

info@yoursrvc com www.slpconsults.com

NERT

Virtual Staging & Tours

So your unit is ready for market and you want to offer a virtual showing. What’s the first step? How do you make a virtual tour good enough to attract tenants? Come learn the best industry practices for virtual tours.

The instructor is Michelle Horneff-Cohen of Property Management Systems.

DATE & TIME: Thursday January 26, 2023 10:00am – 11:00am

COST

Members: $45 Nonmembers: $65

REGISTRATION:

Contact Stephanie Alonzo at 415.255.2288 x113 or stephanie@sfaa.org

WEBINAR

Once you complete registration you will be sent a separate link to register for the Zoom system.

Webinar

NEIGHBORHOOD EMERGENCY RESPONSE TEAM (NERT)

Get prepared and be involved. NERT is a communitybased training program that takes a neighbor-helping-neighbor approach, creating lifelines between families, neighbors, and San Francisco’s emergency responders.

NERT is a free training program for individuals, neighborhood groups, and community-based organizations in San Francisco. Individuals learn the basics of personal preparedness and prevention. Participants learn hands-on disaster skills that will help them as members of an emergency response team and/or as a leader directing untrained volunteers during an emergency, allowing them to act independently or as an adjunct to City emergency services.

Enrollment is easy! Want to host a NERT training in your San Francisco building or neighborhood? Classes will be scheduled based on program need and location. To request a class, you must have thirty sign-ups and an ADA compliant space able to accommodate at least eighty people.

Neighborhood Emergency Response Team (NERT) (415) 970-2022

SFFDNERT@sfgov.org

NERT Class Sign-Up Hotline (415) 970-2024

PMR100 Introduction to Ethical

Management 1/12/2023 12PM-3PM $85.00 $100.00

PMR101 Renting the Property 1/19/2023 12PM-3PM $85.00 $100.00

PMR102 Beginning and Maintaining the Tenancy 1/26/2023 12PM-3PM $85.00 $100.00

PMR103 Renewal of Tenancy and Ending the Tenancy 2/2/2023 12PM-3PM $85.00 $100.00

PMR104 Maintenance Management: Maintaining the Property 2/9/2023 12PM-3PM $85.00 $100.00

PMR105 Liability & Risk Management 2/16/2023 12PM-3PM $85.00 $100.00

PMR106 Budget Development and Implementation 2/23/2023 12PM-3PM $85.00 $100.00

PMR107 Fair Housing: It’s the Law 3/2/2023 12PM-3PM $85.00 $100.00

PMR108 Professional Skills for Supervisors 3/9/2023 12PM-3PM $85.00 $100.00

EXAM CCRM Final Exam 3/16/2023 12PM-3PM FREE FREE

Class Location

Zoom Webinar System

Upon registration the Zoom link will be emailed to the student Class is every Thursday

To Register Online: www.sfaa.org Call: 415-255-2288 x.113 Email: stephanie@sfaa.org

Total Due:

(includes 9th Edition Managing Rental Housing textbook, CCRM binder and Welcome Packet; does not include the $75 CCRM application fee)