March 2021 by sfaa1917

SF APARTMENT magazine

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San Francisco Apartment Association March 2021 / $7.00

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Compass is a real estate broker licensed by the State of California and abides by Equal Housing Opportunity laws. License Number 01527235. All materials presented herein is intended for informational Purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any descriptions. This is not intended to solicit property already listed.

TRIGG SPLENDA SENIOR SALES ASSOCIATE COMPASS COMMERCIAL

415.308.6560 TRIGG@TRIGGSPLENDA.COM LICENSE: 01484698

SF APA magazine

SF APARTMENT

contents

Features

Between the Property Lines BY DANIEL J. TURNER

Moving House BY VIVIAN PO

Retain Your Gains BY AUSTIN BOWLIN

22 4

MARCH 2021 | SF APARTMENT MAGAZINE

PARTM Columns

Membership

Bailout Bill

Collect With Effect

The News

Planning Ahead

Court Talk

BY CLIFFORD E. FRIED

Lay of the Land Use

Mighty Small

BY M. BRETT GLADSTONE, ESQ.

Bound for Rebound

Legal Q&A

BY KILBY STENKAMP

Paid in Part

Market View

BY VARIOUS AUTHORS

Better Days Ahead

Calendar

Professional Services Directory

Membership Application

BY JAY GREENBERG

SF APARTMENT MAGAZINE | MARCH 2021

ANYONE CAN MANAGE YOUR PROPERTY. WE’D RATHER PROTECT YOUR INVESTMENT. Berendt Properties is a team of experts—in leasing, maintenance, and city property regulations. So when you choose us, you get people who understand the priority: your bottom line. BERENDT PROPERTIES

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MARCH 2021 | SF APARTMENT MAGAZINE

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SF APARTMENT

San Francisco Apartment Association Office 265 Ivy Street San Francisco, CA 94102 Tel 415-255-2288 Fax 415-255-1112 Email sfaa@sfaa.org Web www.sfaa.org

SFAA Staff Executive Director Janan New

Deputy Director Vanessa Khaleel

Education Specialist Stephanie Alonzo Marketing Lara Kisich

Member Services Manager Maria Shea

Government and Community Affairs Charley Goss

Accountant Crystal Wang

SFAA Officers President Chris Bricker

Vice President Robert Link Treasurer Jim Hurley

Secretary Mark Henderson

SFAA Directors Eric Andresen, Honor Bulkley, Andre Ferrigno, David Gruber, Kent Mar, Neveo Mosser, J.J. Panzer,

VOLUME XXXIV, NUMBER 3 MARCH 2021 Published by San Francisco Apartment Association Publisher Vanessa Khaleel Editor Pam McElroy

Art Director Jéna Safai

Production Manager Cameron Shaw Tel 415-392-3770 or 415-255-2288 Web www.sfaa.org

SF Apartment Magazine (ISSN 1539-8161) Periodicals Postage Paid at San Francisco, California. POSTMASTER: Send address changes to the SF APARTMENT MAGAZINE, 265 Ivy Street, San Francisco, CA 94102. The SF Apartment Magazine is published monthly for $65 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 Jostens Printing Co. Copyright @2021 by SFAA.

Bert Polacci, James Sangiacomo Dave Wasserman

SF APARTMENT MAGAZINE | MARCH 2021

COLUMN

THE NEWS President Biden extended the country’s COVID-19 eviction moratorium as well. The original order was set to expire on January 31, but it will now run through March 31. The federal moratorium has been in effect since September 1, 2020.

Impact Fees Update On January 11, 2021, San Francisco issued the 2021 Impact Fee Schedule. One change of note is the calculation of the San Francisco Unified School District Fee (“School Fee”) as applied to

Bailout Bill

multi-unit residential developments. The

Funds from Senate Bill 91 will pay up to 80% of tenant back rent.

change would increase the fee on such developments by increasing the space in the building subject to the fee. The School Fee applies to new residen-

Editor’s Note: State and federal guide-

The administration must work quickly

tial developments and additions to exist-

lines and legislation are constantly

to get dollars to landlords at the rate

ing residential properties of greater than

changing regarding COVID-19. For the

promised: 80% of the past rent owed by

500 square feet. Although the School Fee

latest information, resources, financial

the tenant,” said Debra Carlton, Califor-

is collected upon issuance of the first

aid, and forms, visit www.sfaa.org or

nia Apartment Association’s executive

construction document along with the

www.caanet.org/coronavirus.

vice president of state public affairs.

fees paid to the City and County of San

Bill Allots $2.6 Billion for Unpaid Rent

The bill will provide additional funds

own calculation rules under California

to incentivize local jurisdictions to fol-

Government Code Section 65995(b)(1).

Governor Gavin Newsom signed SB

low the new rules of SB 91. If a local

91 into law, which will use $2.6 billion

government implements its own meth-

in federal funds to pay rental property

ods for distributing funds allotted to

owners who are owed rent by tenants

them through SB 91, it will not receive

facing COVID-19 financial hardships.

additional relief.

Francisco, the School Fee is subject to its

This bill was signed to replace the state’s COVID-19 Tenant Relief Act (AB 3088),

Renters must pay at least 25% of back

which expired earlier this year.

rent owed by June 30, whether through their own resources or with the federal

Specifically, the funds will pay up to

funds granted through SB 91.

80% of tenant back rent that has accumulated between April, 1 2020 – March

For more information, including FAQs

31, 2021. Once a rental property owner

and required forms, visit caanet.org.

accepts this payment, the remaining 20% of unpaid rent must be forgiven.

Eviction Moratorium Extended

If the property owner does not forgive

Governor Newsom ordered a five-

the unpaid balance, the relief benefit

month extention on the state’s

will drop from 80% to 25%.

COVID-19 eviction moratorium. The original order was set to expire

“Getting dollars to landlords is impera-

January 31, and it has been extended

tive. Many landlords have not received

through June. This extension was

rent in over a year, and some owners

signed to work in accordance with

are on the brink of losing their homes.

SB 91 noted above.

MARCH 2021 | SF APARTMENT MAGAZINE

ANNUAL ALLOWABLE RENT INCREASE Effective March 1, 2021 through February 28, 2022, the allowable annual rent increase amount will be .7%. To calculate the allowable rent increase, multiply the tenant’s base rent by .007. Annual increases must be calculated only on the tenant’s base rent, which does not include capital improvement passthroughs, utility passthroughs, or bond measure passthroughs. Rent increases cannot be “rounded up” to the nearest dollar. For more information, visit the San Francisco Rent Board website at sfrb.org or call them at (415) 252-4600.

437 HYDE STREET, SAN FRANCISCO

183-185 VILLA TERRACE, SAN FRANCISCO

12 units the Tenderloin

2 Units in Clarendon Heights

$1,995,000

$1,695,000 1701-1711 GREENWICH ST, SAN FRANCISCO

6 Units in Cow Hollow

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371-381 SAN JOSE AVE, SAN FRANCISCO

1678 GROVE ST, SAN FRANCISCO

8 Units in Noe Valley

6 Units in NOPA

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$2,295,000 383-391 SAN JOSE AVE, SAN FRANCISCO

9 Units in Noe Valley

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155 HARRIET STREET #3, SAN FRANCISCO

2 Units in Lower Pacific Heights

Live/Work Loft in SOMA

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$795,000 30 GRAND VIEW TERRACE, SAN FRANCISCO

3 Units in Eureka Valley

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35-39 PROSPER ST, SAN FRANCISCO

136-138 BAKER ST, SAN FRANCISCO

3 Units in Eureka Valley

2 Units in the Upper Haight

$1,695,000

$1,850,000 130 GRAND VIEW AVE, SAN FRANCISCO

3 Units in Eureka Valley

$1,995,000

Considering Buying or Selling a Multi-Unit Property? Allison’s focus is on the sale of multi-unit, mixed-use and commercial properties in San Francisco. With over 18 years of experience selling investment real estate, Allison uses her industry expertise to help sellers maximize the value of their properties.

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SF APARTMENT MAGAZINE | MARCH 2021

Currently, San Francisco applies the School

development. Developers have expressed

housing law.” This is the 10th edition of the

Fee to “total habitable space,” defined as

concern that higher impact fees could stifle

publication, which was produced to help

space in a structure used for living, sleep-

further development.

rental property owners operate “efficiently, ethically, and profitably” in California.

ing, eating, or cooking. The calculation excludes bathrooms, toilet compartments,

Officials and advocates are also looking

closets, halls, storage or utility space, and

at other aspects of the implementation of

Both print and online versions of the publi-

similar areas.

affordable housing requirements. Dis-

cation are available at caanet.org.

cussion is underway about how afford-

SFAA Updates

Effective February 1, 2021, the assessable

able housing is best produced, whether

space for calculation of the School Fee

through construction of on-site affordable

2021 SFAA Lease: The SFAA 2021 lease

for any new residential development will

units or through funding construction of

is now available in print and online. Visit

include all of the square footage within

affordable units with impact fees. Also un-

www.sfaa.org to access the lease, which

the perimeter of the structure. Space still

der review is the policy of collecting 50%

is available to SFAA members for $25 for

excluded from the fee calculation includes

of the affordable housing fee at permit

a single copy and $225 for a pack of ten

any carport, covered or uncovered walk-

(plus shipping and handling). You can

way, garage, overhang, patio, enclosed

Governor Newsom ordered a five-month extention on the state’s COVID-19 eviction moratorium. The original order was set to expire January 31, and it has been extended through June.

read about the specific lease updates in the

mandatory five-year review of its impact

issuance and 50% only after a certificate of

SFAA staff is working round-the-clock to

fee program. The focus of the review for

occupancy is issued.

keep the nonprofit running. Timely pay-

patio, detached accessory structure, or similar area. The change is based on a 2018 appeals court decision that settled the long-contested question of whether school district fees should be assessed on interior common areas. 901 First Street Owner, LLC v. Tustin Unified School District held that interior space outside of individual units, such as interior hallways, storage rooms, mechanical rooms, fitness centers, lounges, and other interior common areas should be included in the fee calculation under the language of Government Code Section 65995(b)(1). Based on this, the School Fee was expanded, which could lead to a significant increase in fees for projects anticipating paying the fee on the square footage of the units only. Oakland is currently undertaking a

many is impact fees for affordable hous-

February issue of SF Apartment Magazine (issue archives are on SFAA’s website). Rent Board Fee: The Rent Board fee is billed to the landlord each year on the property tax statement, and the law permits the landlord to collect a portion of the Rent Board fee from those tenants in occupancy as of November 1 of each year. For the 2020-2021 tax year, the rental unit fee is $50.00 per apartment unit and $25.00 per residential hotel room. The landlord may collect 50% of the fee from tenants, which is $25.00 per apartment unit and $12.50 per residential hotel room. As SFAA pivots to provide you services during the pandemic, there is a new way to connect with SFAA. You can email MemberQuestions@sfaa.org to have your questions and concerns promptly addressed. While the SFAA office is closed,

ment of membership dues is necessary to

ing. Currently, affordable housing fees are

We will continue to watch the Oakland

tiered depending on the type of housing

impact fee review process as it unfolds in

proposed, and the location of the property

2021. We will also watch for earlier changes

SFAA classes will be available online dur-

in one of three regions of the city based

to fees spurred by the current debate.

ing shelter-in-place. The San Francisco

on the level of demand for development in

help the association help you.

Apartment Association is happy to an-

that region. There is debate about whether

The above content was written by Reuben,

nounce that current CCRM students can

the tiered system should be eliminated, as

Junius & Rose Attorney Jody Knight and

continue their education during the pan-

well as whether fees should be increased

was reprinted with permission.

demic right from home. We understand

over the tiers.

keeping up education is crucial and want to assist our members to stay up to date.

Affordable housing advocates believe that

New Edition of Managing Rental Housing Available

fees should already have been increased

The California Apartment Association

in the future. See the calendar on page 48

to fund construction of affordable hous-

updated Managing Rental Housing, the

for a full list of classes.

ing during the last several years of strong

association’s “encyclopedia of state rental

MARCH 2021 | SF APARTMENT MAGAZINE

Thus we will be setting up more webinars

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Adam Filly Senior Vice President | m: 415.516.9843 | adam@adamfilly.com DRE 01354775 | www.AdamFilly.com Compass is a real estate broker licensed by the State of California and abides by Equal Housing Opportunity laws. License Number 01527235. All material presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed.

SF APARTMENT MAGAZINE | MARCH 2021

COLUMN

PLANNING AHEAD

Lay of the Land Use w r i t t e n b y M . B R E T T GL A D S T O N E , E S Q.

Read on for a summary of new and revised laws that will affect local building owners.

the first right to make an offer. COPA also applies to vacant land that could be developed into three or more units. A sale of an individual TIC share in a residential building will not be considered

uring the year 2020, the

located in communities of lower income

a building sale subject to COPA unless

City and State enacted

residents. Many kinds of units or build-

the transfer is connected with a series of

new laws affecting build-

ings will not qualify, including: (1)

transactions to sell the entire building.

ing and unit owners in

buildings of 1-3 units; (2) buildings that

Prudence dictates that sellers comply

San Francisco, including the Interme-

are currently subject to Notices of Viola-

with certain COPA Notice of Sale rules

diate Length Occupancy Law (ILO),

tion; (3) units that are rent controlled;

before listing and marketing their prop-

Community Opportunity to Purchase

(4) units in buildings built after June 22,

erties for sale. Real estate agent listing

Act (COPA), the relaxation of many

2020; and (5) units that are designated as

agreements should address the possibil-

Accessory Dwelling Unit (ADU) regula-

Below Market Rate Units.

ity of a COPA-related sale.

Planning Code, which can force an

In 4-9-unit buildings, the Planning Staff

Qualified Non-Profits have five (5) days

owner to legalize illegal units.

alone can approve ILO units, but in

to notify the seller if they are interested

tions, and certain amendments to the

buildings of 10 or more units, the Plan-

in making an offer to buy the property.

The first two of these reflect a more ac-

ning Commission must approve. The

Upon receipt of such notification, the

tive pro-tenant Board of Supervisors,

Commission or Staff will not approve

seller must provide further disclosures

and the latter two reflect the continu-

ILO units under certain circumstances,

to the interested nonprofit(s), including

ing need to create more sound housing,

including the circumstance where in a

the name and contact info for each ten-

particularly units that are smaller and

building of 10 or more units, more than

ant, which triggers an additional 25-day

less expensive to create. This article

20% of the units in the building are al-

period, during which the Qualified Non-

will summarize related laws or regula-

ready classified as ILOs; or in a building

Profit(s) may submit an actual Offer to

tions that either the State or the City

of 4-9 units, more than 25% of the units

Purchase the property.

enacted during the last year.

are already classified as ILOs. There are no grandfather provisions, meaning

If none of the Qualified Non-Profits on

Intermediate Length Occupancy Housing (ILO Housing)

units that are today rented for more than

the City’s list of same express an inter-

a month but less than a year will have

est in making an offer within the initial

These are units that are rented for more

to register. The process of legalization

five-day period, the seller may proceed

than 30 days but less than one year. The

of existing rentals (or building new ILO

in marketing the property for sale and

City requires that before June 22, 2022,

units) is started by filing an alteration

may solicit third-party offers for pur-

owners must apply for permission to

or building permit with the Building

chase, with no Rights of First Refusal. If

rent such units and, with exceptions

Department, which then starts the Plan-

a Qualified Non-Profit makes an Offer

discussed below, permission will be

ning Department review process.

to Purchase the property, the seller is

granted until the number of such units

The Community Opportunity to Purchase Act (COPA)

one exception: any Qualified Non-Profit

be aware that only the first 1,000 qualified units to apply will be approved. The

COPA is a new local law that requires

seller acquires a Right of First Refusal to

City will require that two-thirds or more

that whenever most residential proper-

purchase the property by matching the

of the 1,000 ILO units be in the “down-

ties of three or more units are offered

terms and conditions of a subsequent

town core,” and no more than one-third

for sale, “Qualified Non-Profits” have

third-party sale. Under the Right of First

in the City reaches 1,000. Owners should

not required to accept the Offer, with

MARCH 2021 | SF APARTMENT MAGAZINE

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Refusal, the seller must provide notice to

allowed more ADUs to be built per lot than

two formulas. First, the Commission will

any Qualified Non-Profit whose initial Of-

ever before. New State law allows each city

compare the cost to legalize the unit to

fer was declined, setting forth the terms

to enact variations of the State law, as long

the added value that legalizing the unit

and conditions the seller has received

as the variations are not more restrictive.

would provide to the property. Legaliza-

from any third-party purchase offer the

San Francisco has recently created interim

tion would be deemed financially feasible

seller intends to accept.

policies affecting the State rules.

if gain in the value of the property is equal

Also, in the event a seller has not provided

For the first time, two ADU units may

illegal unit. Second, the Commission will

the initial five-day Notice of Sale before ac-

be built in the rear yard of a lot already

look at whether the cost to legalize the il-

cepting an offer, perhaps unsolicited, all of

containing two or more units, without a

legal unit under applicable local codes is

the Qualified Non-Profits are still entitled

rear yard variance, as long as the units are

reasonable, based on how such cost com-

to receive notification of their Right of

1,000 or less square feet and are set back

pares to the average cost of legalization a

First Offer, followed by a 30-day offer sub-

four or more feet from property lines. The

unit, derived from the cost of projects on

mittal period. Qualified Non-Profits have

distance between the new structure and

the Planning Department’s Master List of

five days to exercise their Right of First

any existing structure is not regulated.

Additional Dwelling Units Approved.

Refusal (30 days if the seller is responding

ADUs which do not require waivers of

to an unsolicited offer). A Qualified Non-

local codes are exempt from subjective

Finally, the Commission is permitted to

Profit can be required to include the same

design review, have a shortened approval

consider whether the cost would constitute

closing date and contingency removal

period of 60 days, and are exempt from

a financial hardship if no City funds are

dates as the third party offer it is matching.

local developer impact fees under certain

available to assist the property owner with

COPA regulations state that a Qualified

circumstances. There is now no limit on

the cost of legalization.

Nonprofit must be given a minimum of 60

the number of ADUs that can be created

days to release any contingencies. Material

within an existing structure of two or

changes to the terms and conditions of a

more dwelling units, as long as the num-

third party sale may be considered a new

ber of ADUs created does not exceed 25%

offer, which the seller must then present to

of the number of existing legal dwelling

all Qualified Non-Profits that declined the

units. State law has now created a new

original offer, and the Right of First Refusal

type of ADU for existing and proposed

process starts over again.

single family dwellings, called a Junior

to or greater than the cost to legalize the

ADU ( JADU), which is limited to 500 COPA rules expressly authorize “con-

square feet. There must be owner occu-

ditional” third-party sales agreements.

pancy in either the primary unit or in the

If a seller receives a third-party offer to

JADU. With the exception of JADU units,

purchase that the seller wishes to ac-

any local laws that require an owner to

cept, or if the seller makes an offer to

reside in either a primary residence or the

sell that a third party wishes to accept,

ADU are disallowed until January 1, 2025.

the respective offer to purchase and/or

ADUs cannot be sold apart from other

offer of sale may be accepted contingent

units on the property and, in certain

upon no Qualified Non-Profits exercising

circumstances, an ADU will be subject to

their Right of First Refusal. COPA rules

local rent control.

expressly authorize “conditional” thirda third-party offer to purchase that the

New Limits on Removing Illegal Dwelling Units

seller wishes to accept, or if the seller

There are now very few exceptions to

makes an offer to sell that a third party

the requirement that the Planning Com-

wishes to accept, the respective offer

mission (and no longer its staff) must

to purchase and/or offer of sale may be

approve the removal of illegal units. An

accepted contingent upon no Qualified

owner may no longer avoid a Commis-

Non-Profits exercising their Right of

sion hearing by showing that the value of

First Refusal.

the unit or home is at the very top of the

party sales agreements. If a seller receives

Relaxation of Accessory Dwelling Unit (ADU) Regulations

range of values. In deciding, the Commission will con-

While ADUs have been allowed for several

sider whether the unit being removed

years, 2020 saw changes in State law that

costs too much money to legalize, using

MARCH 2021 | SF APARTMENT MAGAZINE

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. M. Brett Gladstone, Esq. is a partner in the Land Use Group of Hanson Bridgett.

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TerrenceJonesSF.com | 415.786.2216

415.596.0659

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SF APARTMENT MAGAZINE | MARCH 2021

COLUMN

LEGAL Q&A

Paid in Part w r i t t e n b y VA R IOU S AU T HOR S

Does accepting partial rent during conditions. (The difficulty with COVID-19 is that it affects both.) the pandemic change the base rent going forward? —Justin A. Goodman & Maddy Zacks Q. I received partial rent from But even if a defaulting tenant pays their Q. A long-time tenant got mar-

a tenant who cited a COVID-19 hardship. If I accept this payment, am I acknowledging that this is rent in full and that I will not recover the remaining balance? How should I move forward?

A. Accepting less than the full amount of rent, by itself, will not credit your ten-

25% for the “Transition Time Period”

from September through January, they still owe you the other 75%—you just can’t evict them while you get it. Instead, landlords can file lawsuits for breach of contract (and the CTRA even expands the jurisdiction of small claims court to

A. The basic answer is “probably not.”

avoid the transaction costs of us expen-

We always urge members to refrain

sive and irritating lawyers).

from any course of action or inaction that could be deemed to recognize a

ant for payment in full or eliminate your ability to collect the difference, but there

Different rules will apply if you made

subsequent occupant as a co-tenant,

are some things you should be cautious

any compromise agreements with your

even if that new resident is the original

of, especially during the pandemic.

tenant. California can’t outright elimi-

tenant’s spouse. For example, (i) never

nate a party’s contractual obligations,

accept rent from a subtenant; (ii) never

A rental agreement can arise by writ-

but the other party can always waive

add subtenants onto the lease agree-

ten contract, oral agreement, or even

them or propose modifications. For

ment or create a separate rental contract

conduct, but most modern, urban tenan-

instance, many landlords are offering

with them; (iii) never include subtenants

cies involve a specific monthly rental

to forgive a portion of the total rent, if

on communications, including manage-

payment. Thus, if your tenant paid you

their tenant timely pays at a discount.

ment-related emails, notices of entry,

half of his total rent in 2019, you’d serve

(To put it another way, at 25%, the

rent adjustments, or assistive animal

a three-day notice for the other half, and

landlord can’t evict; at 100%, the ten-

informational packets; and (iv) never

recover possession and the rent default

ant isn’t in breach, but anything in the

engage in any action or line of com-

in an unlawful detainer lawsuit.

middle might justify a compromise on

munication that could lead subtenants

the landlord’s claims.)

to believe that there is a direct relationship, or what is known as contractual

Last year’s AB 3088 (i.e., the COVID-19

ried this year and now has a joint bank account with his wife. If I cash a check from this joint account, would I be acknowledging his partner as a tenant?

Tenant Relief Act) was the first California

If your building is rent controlled, you

privity, between you and them. In sum,

law to consider a percentage of the total

do need to be cautious of the effect

while there is no reason for rudeness,

rent to be “payment in full” (giving rise

of a compromise on the base rent. In

maintaining a healthy distance is key to

to your concern), but only insofar as it

considering whether a past rental rate

preserving a scenario where the original

prevents eviction for non-payment of

decrease has permanently lowered the

tenants remain “original” and the subse-

rent. (SFAA challenged a San Francisco

lawful base rent, the rent board dis-

quent occupants stay as “subsequent.”

predecessor that entirely eliminated rent

tinguishes between temporary reduc-

default as a basis for eviction, but Cali-

tions due to genuine financial hardship

Why are these classifications impor-

fornia passed the CTRA last September,

specific to the tenant, versus agreements

tant? Under the Costa-Hawkins Rental

mooting the challenge.)

to lower the rent due to overall market

Housing Act, an owner of residential

MARCH 2021 | SF APARTMENT MAGAZINE

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This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/ operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services member FINRA, SIPC Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300,SFSan Francisco, CA 94104. APARTMENT MAGAZINE | MARCH 2021 17

31.com

rental property may impose an unlimited

to novel issues. As anxiety over COVID-19

common areas of the property, implement

rent increase when the last original oc-

continues to grow, landlords have had to

policies and practices for social distanc-

cupant no longer permanently resides at

come up with practical solutions to protect

ing such as no more than two persons

the apartment and the folks left behind are

themselves and the residents in their build-

from different households permitted in an

subsequent occupants that did not have a

ings. There are things a landlord should do

elevator at a time, shut down common use

direct owner-tenant relationship with the

when a tenant in a multi-unit dwelling tests

rooms to minimize public gathering, and

property owner. At Rent Board hearings

positive for COVID-19.

post signage in frequently used areas (like a laundry room) to encourage and ensure

where these rent adjustments are often

social distancing.

contested and decided, the Administrative

It is important to communicate to all

Law Judge (ALJ) will consider such evi-

residents in the building when a tenant

dence as whether management accepted

has been diagnosed with COVID-19. The

Informing tenants that you are taking

rent from the subtenant, the subtenant

coronavirus spreads quickly and is highly

active precautions could help reduce

was named on communication or became

contagious. The other tenants should be

anxiety. The San Francisco’s Department

a signatory to a lease agreement with the

informed of this as soon as possible so

of Public Health has created guidelines

owner, or the subtenant was otherwise

they can take necessary precautions.

for multifamily residential buildings that could be used as a good resource.

directly involved with the owner-tenant relationship prior to the original tenant’s

Shortly after being notified of a tenant’s

departure. If so, then the proposed rent

positive results, the landlord should

adjustment may not be approved, and the

clean and disinfect common areas of the

subtenant will be allowed to remain at the

building. This can be done by following

unadjusted rent.

recommended cleaning and disinfecting protocols as outlined by the Centers for

In this case, the owner is obviously aware

Disease Control (CDC).

of the cautions required to preserve the ability to adjust rent under Costa-Hawkins.

When communicating this information

While it is impossible to predict with cer-

to residents, be mindful of legal and

tainty the outcome of any particular case,

privacy concerns. Do not disclose the

this author believes that an ALJ would not

identity of the tenant who has been diag-

penalize the owner if (i) the check was

nosed. Instead, send a general letter to

submitted by the original occupant; and

all residents saying:

(ii) the original occupant was the signatory as opposed to the partner. Simply because

“[O]ne of the residents in this building

the funds may have originated from a

has tested positive for COVID-19. Recom-

jointly held account should not create con-

mended cleaning and disinfecting proto-

tractual privity between the owner and the

col will be done to common areas. Please

tenant’s new spouse. Indeed, with more

engage in appropriate safety practices

and more payments being made electroni-

recommended by the Centers for Disease

cally, the actual source of the funds is of-

Control’s (CDC) website (cdc.gov) and from

ten unknown and impossible to ascertain.

the San Francisco Department of Public

In sum, maintain heightened diligence, but

Health’s website (sfcdcp.org/covid19).”

employ common sense as well. If there is no direct interaction with the subtenant,

Even before a tenant notifies a landlord

you should be fine.

that they have been diagnosed, a general letter can be sent to all tenants to remind —Dave Wasserman

Q. How can I prepare for the

possibility of a tenant testing positive for COVID-19 in my building? Is it my responsibility to inform the other tenants?

A. The coronavirus has thrust our com-

everyone to practice safety protocols as recommended by the CDC. Some landlords have increased cleaning in areas such as lobbies, stairwells, laundry rooms, mailrooms, and reception areas. Such cleaning includes wiping down with disinfectant surfaces that are frequently touched, such as door handles, mailboxes,

munity into unprecedented times. It has

and elevator buttons. Landlords can

caused landlords to come up with solutions

also choose to provide hand sanitizer in

MARCH 2021 | SF APARTMENT MAGAZINE

—Angelica Sandoval The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Justin A. Goodman and Maddy Zacks are with Zacks, Freedman & Patterson, P.C. and can be reached at 415-956-8100. Dave Wasserman can be reached at 415-567-9600. Angelica Sandoval is with Fried & Williams and can be reached at 415-421-0100.

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FOR SALE

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FOR SALE

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In association with Dan McGivern

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PENDING

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MARCH 2021 | SF APARTMENT MAGAZINE

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www.MarcusMillichap.com

SF APARTMENT MAGAZINE | MARCH 2021

Between the Property Lines written by

DA N I E L J . T U R N E R

With Prop. 19 slated to remove transfer exemptions for rental properties, the taxes on inherited rental properties will see a surge as assessments rise to meet market value. Despite San Francisco’s reputation as a high-rent city, it maintains a substantial inventory of older, lower-rent units that primarily cater to working- and middle-class renters. The prevalence of these units arises from a combination of factors: strong rent-control laws and eviction protections, combined with favorable tax treatment under Proposition 13, and subsequent parent-child transfer exemptions passed in the 1980s. These transfer exemptions guaranteed Prop. 13’s low property taxes over multiple generations, creating an incentive to preserve rather than sell, upgrade, or redevelop low-cost rental inventory. On November 3, 2020, California voters narrowly approved Prop. 19, or The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, which amends Article XIIIA of the California Constitution and will remove all transfer exemptions for rental properties. Without these exemptions, the coming decades will see increased taxes on inherited rental properties, which will likely force many small property owners out of this lower-cost niche and lead to the gradual erosion of this segment of the rental market.

History of Property Tax and Transfer Exemptions (Props. 13 and 58) In 1978, Prop. 13 set a uniform property tax in California at a rate of 1% on a property’s assessed value. The value of a property is assessed on the date of transfer and is limited to a 2% yearly increase unless there is another transfer (or substantial rehabilitation). No matter how high a property’s value climbs, the tax rate will grow at a slow, predictable pace. In 1986, Prop. 58 added transfer exemptions, including an exemption for parent-child transfers. This allowed parents to transfer rental properties that were assessed at up to $1,000,000 in value to their children (or up to $2,000,000 if the property was being transferred to a married couple) before a reassessment was triggered on the overage. This gave families the ability to sustain the advantages of tax rates secured by decades-old purchases.

Effects of Prop. 13 on the Rental Market In high demand rental markets, lost profit opportunities on older or rent-controlled units generally drive owners to redevelop or sell their properties to take advantage of rising demand and rental rates. Prop. 13, however, offers a counterbalance for longstanding owners by assuring a steady tax bill and predictable operating costs, which guarantees ongoing stability for these owners.

MARCH 2021 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2021

ABOUT PROPOSITION 19: In November 2020, California voters passed Proposition 19, which makes changes to property tax benefits for families, seniors, severely disabled persons, and victims of natural disaster in our state. In response, San Francisco’s Assessor has developed a new webpage, SFAssessor.org/Prop19, to help consolidate resources—including video tutorials, frequently asked questions, forms and reference links—to help you understand and prepare for the upcoming changes. WHAT IS PROP. 19?

Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act, is constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their primary residence; but it also allows homeowners who are over 55 years of age, disabled, or victims of a wildfire or natural disaster to transfer their assessed value of their primary home to a newly purchased or newly constructed replacement primary residence up to three times.

Even in a market like San Francisco’s, the effects of Prop. 13 can be seen in the durable collection of older and rent controlled buildings that make up large swaths of the city’s rental offerings. Incremental tax increases and predictable operating costs allow these buildings to generate a consistent level of profit, even when rents are low due to rent control or aged facilities. This consistent income with minimal intervention persuades many owners to forgo chasing the market and risk endangering their investment. The long-term preservation of these buildings at low rates results in a consistent stock of housing for lower-income renters. Under

The new law will make important changes to two existing statewide property tax saving programs:

the parent-child transfer exemption, fami-

Replace Proposition 58 (1986) and Proposition 193 (1996) by limiting parent-to-child transfer and grandparent-to-grandchild transfer exclusions—Effective 2/16/2021

without impacting their consistent invest-

Replace Proposition 60 (1986) and Proposition 90 (1988) programs for home transfer by seniors and severely disabled persons—Effective 4/1/2021

the owner and the continued availability

lies could pass down their rental properties ment income. This security protects both of these units by disincentivizing drastic changes to these family investments.

CHANGES TO SENIOR AND DISASTER VICTIM REPLACEMENT HOME TRANSFERS

Current laws allow seniors over 55 years old and severely disabled persons to transfer the taxable value of their existing home to their new replacement home, so long as the market value of the new home is equal to or less than the existing home’s value. The program was limited to once in a lifetime, with additional restrictions as to where the replacement home was located (usually within the same county or within some counties that allow for reciprocity). Starting April 1, 2021, Proposition 19 will make these programs more flexible in three main ways:

Location of Replacement Home: Expand from the same county and county with intercounty ordinance (10 counties passed Proposition 90) to all counties in California, which means you can move to any county in California and still qualify for this tax benefit.

Value Limit: Expand from “equal or less value” (market value of replacement home

Prop. 19 and the Erosion of Affordable Rentals With Prop. 19 slated to remove transfer exemptions for rental properties, the taxes on inherited rental properties will see an immediate surge as assessments rise to meet market value. In a real estate market that has seen forty years of unprecedented growth, these increases could easily be tenfold or more. With tax increases cutting deeply into the

must be equal or less than market value of old home) to any value, as long as the amount above 100% is added to transferred value. In other words, you can purchase your replacement home at any amount but the difference in market value between the replacement home and the original home will be added to transferred assessed value (old value).

already below-market profits of these build-

Number of Eligible Transfers: Expand from once in a lifetime to three times.

develops over the coming years. For in-

For more information on the current programs and updates on questions to be clarified, please visit www.boe.ca.gov/prop19/.

stance, an inherited older building may be

Disclaimer: This information is intended to provide general and summary infor-

a low tax basis. These owners would be un-

mation about Proposition 19. It is not intended to be a legal interpretation or official guidance, or relied upon for any purpose, but is instead a presentation of summary information. Prop. 19 is a constitutional amendment, so additional legislation, regulations, and statewide guidance are expected to clarify its implementation. If there is a conflict between the information provided and the proposition or any legal authorities implementing or interpreting the proposition, the text of the proposition and the other implementing or interpretive authorities will prevail. Consult an attorney for advice on your specific situation.

ings, inheriting owners will see little of the stability that convinced their parents to maintain these properties. Prop. 19’s effects will reveal numerous issues as the situation

unable to sustain a profit at the market rate for comparable buildings which still retain able to compete and be forced to upgrade or sell their units, speeding up the loss of vital rental inventory. Another issue that could arise is disparate taxes on comparable buildings, depending on when in the boom-bust cycle they were reassessed, leading to potentially different

MARCH 2021 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2021

tax bills. Further, the recent rental impacts of Covid-19, with high vacancies, rent reductions, and non-paying tenants, alert us to numerous situations where high taxes on historically low-profit units will threaten viability and drive owners to sell or redevelop. San Francisco has a large population dependent on older units, with more than 62% of renters living in rent controlled buildings. Many of these buildings are only profitable because Prop. 13 has protected owners and their tenants from market forces for decades and allowed them to stay afloat. With the loss of these protections, Prop. 19 will accelerate the loss of this housing as desperate owners seek ways to maintain viability. The above content was reprinted with permission from www.reubenlaw.com. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Daniel J. Turner is an attorney at Reuben, Junius & Rose, LLP.

PASSTHROUGH TO-DOS While it still takes several months to get capital improvement petitions through the Rent Board’s process, the more complete your petition is, the faster it will get approved. The following are a few insider tips:

• Be sure to keep copies of all contracts, invoices, change orders, cancelled checks, and competitive bids. • If you are doing multiple projects (mandatory seismic and ADU, for example, or if you add on voluntary work on to a mandatory seismic project), make sure the contractors do separate contracts and separate invoices for each project. It’s also best to pay for the projects separately.

DOCUMENTATION REQUIREMENTS: • Proof of cost in the form of an invoice or contract. Make sure the invoice or contract clearly states the scope of the work and the property address. • Proof of payment in the form of copies of cancelled checks (copies from your online banking or bank statement are acceptable) or credit card receipts plus statements. • Ask contactors to issue separate invoices for different projects and keep payments separate when at all possible. • Identify the building, project, or invoice numbers on the memo line of your checks. • For mandatory seismic work, you will also need: permit application, certificate of final completion, and permit invoice. It’s also good to have a PDF of the plans and the job card.

ONE STOP MAINTENANCE AND PROPERTY SERVICE

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MARCH 2021 | SF APARTMENT MAGAZINE

• To avoid the estimator fee, have either a competitive bid or an invoice that is broken down by labor and materials for each project and every dollar you spend. If you have a competitive bid for the initial phase of the project, you will also need to have any change orders broken down by labor and materials. Make sure the labor and materials billing includes both the number of hours and the hourly rate charged. • Take a few photos before, during, and after the project, because they will help clarify the scope of the work. Kim Boyd Bermingham has been working in the area of landlord-tenant law for more than 25 years. She started Rent Board Passthroughs in 1999. She can be reached at 415-333-8005.

Why is DST Real Estate a Popular 1031 Exchange Option? Just Ask a Few California Landlords. A 1031 Exchange into DST real estate helped these landlords meet their objectives. By selling their rental property and investing in three institutional-grade DST properties, they avoided paying 42.1% in gains tax while increasing income potential, diversifying risk, and eliminating active property management.

Before 1031: Landlords

After 1031: DST Property Investors

Sold Rental Property. Performed a 1031 Exchange. Deferred $423K in gains tax.

Invested in 3 passive management 1031 DST properties with monthly income potential.

Whole Ownership Rental Property

Fractional Ownership in Institutional DST Properties

Example and pictures are for illustrative purposes only and are intended to show types of institutional properties that DST Sponsors seek to own. It does not constitute open or closed offerings. Individual results may vary.

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About Real Estate Transition Solutions

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For over 20 years, Real Estate Transition Solutions has helped investment property owners perform successful 1031 Exchanges by developing and implementing well-planned, tax-efficient transition strategies that seek to meet both their financial and lifestyle objectives. To learn more about 1031 DST property investments and fractional real estate ownership, call Real Estate Transition Solutions at 415-691-6525. This is for informational purposes only, does not constitute as investment advice, and is not legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney. Real Estate Transition Solutions offers securities through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Management, LLC (CAM), an SEC-registered investment adviser. Real Estate Transition Solutions is independent of CIS and CAM. The company depicted in SF APARTMENT MAGAZINE | MARCH 2021 the photographs herein may have proprietary interests in their name and trademark. Nothing herein shall be considered an endorsement, authorization or approval of RETS, CIS, and CAM or the investment vehicles they may offer, of the aforementioned company. Further, none of the aforementioned company is affiliated with RETS, CIS, and CAM in any manner.

MOVING HOUSE written by

V IV IA N PO

Carmen Chu has served San Francisco for 16 years, and has now become the first Asian American woman to serve as city administrator.

Once known as the “Money Lady of City Hall,” generating over $3 billion in annual revenues for vital city services and public education, Carmen Chu has started a new journey to lead an organization that is responsible for the operations of the entire city, overseeing 25 departments, a 2,700-person workforce, and an annual budget of nearly three-quarters of a billion dollars.

Vivian Po: Looking back at your time as the San Francisco Assessor, did you accomplished everything you wanted?

Carmen Chu: As public servants, we may never feel that our work is complete, but I leave the department knowing that the Assessor’s Office has made a meaningful impact on the day-to-day lives of San Franciscans. Over the last eight years, my team and I have reversed a decades-old backlog of assessments and appeals, cut down on wait times for current assessments, and have increased access to services and data online at every turn, earning us the prestigious 2020 Good Government Award, an honor recognizing excellence in public sector management and stewardship. As a result, total assessments increased 74% from $173 billion to $302 billion, in-progress lien date value rose to $11 billion in 2018 compared to $500 million in 2014, and roughly $40 million in underreported transfer taxes was recovered from our audit initiative focused on high value transactions. Collectively, these actions have resulted in over half a billion dollars in property tax revenues above forecasts, $2.6 billion in increased bonding capacity for road repairs and needed public infrastructure improvements and $545 million in Educational Revenue Augmentation Funds (ERAF) dollars returned to San Francisco by the State in 2018 and 2019.

MARCH 2021 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2021

Po: What is your greatest achievement in

taxation professionals, the Family Wealth

programs, including the Department of

the past eight years?

Forum has provided direct one-on-one

Technology, 311 Customer Service Call

financial counseling or assistance for over

Center, Office of Contract Administra-

3,000 families! In addition, a redesigned

tion/Purchasing, Real Estate, County

we get the job done. In late January, before

public website, multilingual factsheets

Clerk, Fleet Management, Convention Fa-

I left the role of Assessor, we went live

and videos, and a re-imagined public

cilities, Animal Care and Control, Medical

with the first phase of SMART, a multi-year,

service lobby with multilingual kiosks

Examiner, and Treasure Island. Because

multi-departmental initiative to overhaul

demonstrate our commitment to serve

of our broad reach, we have played a

the City’s legacy property tax system to

everyone coming through our doors. We

central role in the COVID-19 response

improve resilience, reduce inefficiencies

have achieved all this together as a team,

and we will focus on strengthening and

and revenue risk and provide critical audit

and I cannot wait to see what the Asses-

expanding this role as we move on to the

controls and safeguards.

sor’s team can continue to achieve under

vaccine distribution and recovery phase.

Chu: Investing in our staff! Together,

new leadership. Our track record of progress also includes

This past year has been incredibly diffi-

creating a standards division to ensure uni-

Po: You mentioned your family during

form practices, training and data, providing

your inauguration speech as City Admin-

what it has been like to lose their jobs

professional career growth opportunities

istrator. How will your personal experi-

and their businesses. So many people

through appraiser trainees programs, de-

ence guide your strategy in leading this

are barely hanging on. The pandemic has

ploying automated real-time data reports to

new department?

exposed and exacerbated inequities and

increase transparency and improve man-

cult. So many San Franciscans have shared

vulnerabilities in our current economic

agement, launching a centralized property

Chu: As this past year has taught us,

records system that improves security of vi-

the push for equity must be constant.

immigrants, low-income families, com-

tal records and efficiency for staff, revamp-

I am a daughter of hard-working Chi-

munities of color, and seniors, are dispro-

ing our mapping functions and advancing

nese immigrants, who did not have very

portionately impacted by the crisis. For

towards GIS spatial mapping capabilities,

much when they first came here. They

example, over 40% of the cases that tested

implementing a new public records system

went to adult school every night to learn

positive are among the Latinx population

that improves access and reduces costs for

English so they could become citizens.

and over 35% of the deaths have come

taxpayers, and providing secure electronic

They saved every penny they had to start

from the Asian American population.

recording and filing services.

a small family restaurant. They almost

Po: From Assessor to Administrator, what have you left behind?

Chu: The transition was fast. I was

system. Vulnerable populations, such as

never took a day off work and I was that

Co-chairing the Economic Recovery Task

kid who helped at the restaurant on every

Force allowed me the opportunity to

weekend and did homework in between

develop actionable recommendations

waiting on tables.

(released last October) with more than 100 business, labor union, non-profit, academia,

nominated by Mayor London Breed on

Growing up, we were at the epicenter of

faith-based and other community leaders.

January 14, confirmed by the Board of

the 1992 Los Angeles Riots, following the

The recommendations focused on sup-

Supervisors unanimously the following

excessive beating of Rodney King. To this

porting existing businesses, expanding the

week, and was sworn in on February 2

day, I remember the fear and helpless-

workforce, narrowing the digital divide,

to take on the new job. But I leave the

ness I felt when my parents were held up

and re-imagining shared public spaces.

role of Assessor knowing that the office

at gunpoint near our family restaurant

is in a better place. During my term, I

in South Central Los Angeles. Sixty-three

We know that the pandemic has dramati-

hope I have instilled a strong sense of

people died and more than 2,000 were

cally changed our lives. Working remotely

confidence in the Assessor team be-

injured in this historic civic unrest fight-

has become the new normal; some indus-

cause embedded in all these operational

ing for racial equity. It made me realize

tries, especially small businesses, may face

improvements is an unrelenting commit-

how government could play a much big-

losses that would never return; and essen-

ment from all of us to serving the public

ger role in creating real changes through

tial workers need to establish new proto-

good, and to ensuring that government

inclusive and representative policies and

cols to work. True recovery is more than

services are accessible, especially to low-

programs, and I am committed to be a

just reopening. I will continue to support

income and marginalized communities.

part of it.

and advocate on implementing the most

Among our community outreach efforts,

Po: Can you tell us what the City Adminis-

tions as the City Administrator.

I am most proud of our signature event—

trator does? What will you focus on?

the Family Wealth Forum launched in 2017. Bringing together non-profit part-

Chu: The City Administrator’s Office

ners, attorneys, and estate planning and

oversees 25 departments, divisions, and

MARCH 2021 | SF APARTMENT MAGAZINE

prominent and impactful recommenda-

SF APARTMENT MAGAZINE | MARCH 2021

RETAIN your GAINS written by

AU S T I N B OW L I N

Understand gains tax liability and how to calculate it. Even in the most robust seller's market, there is one thing that gives an investment property owner pause: capital gains taxes. And as a California investment property owner, your tax liability on the sale of investment property can be substantial—as much as 42.1% —which drives many investors to explore tax-deferral strategies like a 1031 Exchange.

Understanding Tax Liability As licensed 1031 Exchange advisors, one of the first things we do when working with a client is to help them understand their tax liability. A tax liability from the sale of investment real estate is not just about federal capital gains tax—it is the total aggregate amount of tax owed when an investment property is sold. Not only are you responsible for federal capital gains tax (15% – 20%), but you may also have to pay state capital gains tax (zero – 13.3%), depreciation recapture tax (25%), and net investment income tax (3.8%).

Five Steps to Calculate Your Tax Liability Federal and state tax authorities calculate the amount you owe based on the taxable gain—not the gross proceeds from the sale of the property. To estimate the total tax liability after the sale of an asset, follow these five steps:

Step 1: Estimate the Net Sales Proceeds Start by determining the fair market value of the investment property, or the list price if you brought the property to market. There are several ways to calculate the sales

MARCH 2021 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2021

price, but the most popular are the income

increase your investment in the property

sale of the property are $3,250,000, your

method and the comparable sale method.

and are deducted from the net sales pro-

taxable gain is $2,200,000. The second

With the income method, divide the cur-

ceeds at the time of the sale to arrive at the

part of the tax liability is calculated based

rent or estimated net operating income

property’s gain.

off the amount of depreciation available to take over the period of ownership –

(NOI) by the target capitalization rate (cap rate). With the comparable sales method,

While some of these costs are intrinsic to

referred to as accumulated depreciation.

an investor determines a value based on

real estate investment, like escrow fees,

Based off the above scenario, this amount

recent sales of local comparable properties,

others are flexible. A new roof, an upgrade

is $750,000.

both in terms of size and quality. Smaller

to the kitchen, or adding a pool are capital

properties and single-family rentals typi-

improvements that have a wide range of

Step 4: Determine Your Filing Status

cally rely on the comparable sales method,

costs, giving the owner some flexibility in

Your income, your tax filing status, the state

while larger properties rely on net operat-

the amount they can increase the tax basis

where you pay income taxes, and the loca-

ing income to determine value. Most inves-

of the asset versus deduct in the current

tion of the property will determine your

tors work with an experienced broker to

year as an operating expense.

capital gains tax rate. The IRS, most state

set a supportable sales price. For example,

governments, and some local governments

let’s assume a comparison of similar local

Decreasing the Tax Basis: Owners of

collect a capital gains tax on the sale of an

properties indicates a property may sell for

investment real estate, which includes a

investment property, compounding the rate

$3,500,000 with $250,000 in deductible sell-

building or structure must also decrease

and increasing your tax bill.

ing costs, such as brokerage costs, title, es-

the property’s tax basis, ultimately increas-

crow, and excise tax (if applicable). In this

ing the figure used to calculate the second

At the federal level, the capital gains tax

scenario, the net sales proceeds would be

form of gain referred to as “depreciation

rate is zero for investors with an annual

$3,250,000. Importantly, the net sales pro-

recapture.” The most common way to de-

income (including the gain resulting from

ceeds do not consider any loan balances

crease the tax basis is through an annual

asset sales) less than $40,000 per year;

paid off at closing.

depreciation deduction. The deduction

15% for investors with an annual income

is subtracted from the tax basis on an an-

Step 2: Estimate the Tax Basis

from $40,001 to $441,450; and 20% for

nual basis to be treated as a tax expense

investors with an annual income above

Tax basis, also known as remaining basis, is

offsetting income, which is then recaptured

$440,451. Most state tax authorities collect

the total capital that an owner has invested

at the time of sale. While it might seem

a capital gains tax as well. The state tax

and capitalized in the asset, including the

unexpected to decrease your tax basis and

rate ranges from zero to 13.3%. California

purchase price, closing costs, and capital-

eventually increase your tax costs, the de-

is at the top of the list with a 13.3% capital

ized improvements, less the accumulated

preciation deduction reduces an investor’s

gains tax rate, while some states, like

depreciation. For example, if you pur-

annual taxable income and thus income tax

Texas, Washington, and Florida do not

chased the property for $850,000, invested

due during the years of ownership. Note

collect state capital gains taxes.

$200,000 in capital improvements, and

that annual depreciation is not optional.

have $750,000 in depreciation, your re-

Investors will be charged for depreciation

Step 5: Calculate Capital Gains Tax

maining basis is $300,000. There are some

recapture on the aggregate amount of avail-

Capital gains taxes are applied to the

limitations to the items that you can include

able depreciation throughout the period

taxable gain based on the tax rate deter-

in the tax basis. Mortgage insurance pre-

of ownership regardless of whether they

mined by your income and filing status,

miums and routine maintenance costs are

recorded depreciation expense. Easements,

and the bill can be significant. There

examples of items that are not included.

some insurance reimbursements, and other

are four property tax categories: federal

A tax advisor can help to determine your

tax deductions, like personal property de-

capital gains taxes, state and local capital

property’s current remaining basis, which

ductions, can also decrease your tax basis.

gains tax, depreciation recapture, and

can be adjusted based on capital improvements and tax deductions.

Step 3: Calculate Taxable Gain

net investment tax.

The taxable gain is the realized return or

The federal and state capital gains taxes are

Increasing the Tax Basis: Property own-

profit from the sale of an asset, or, in other

calculated at the investor's tax rate on the

ers will increase their tax basis anytime

words, it is the net sales proceeds less the

taxable gain. In our example above, a Cali-

they invest money into the property with

original tax basis, pre-depreciation. Tax

fornia property owner with a taxable gain

capitalized improvements—such as a new

authorities like the IRS and Franchise Tax

of $2,200,000 would owe 20% in federal

kitchen, roof, or even an addition, as well as

Board use the taxable gain figure to de-

capital gains tax and 13.3% in state capital

financing expenses. Expenses paid to oper-

termine the capital gains tax. To calculate

gains tax amounting to $732,600 in total

ate the property, like legal fees, manage-

the taxable gain, subtract the original tax

capital gains taxes. Individuals with sig-

ment expenses, and small repairs are not

basis from the net sale proceeds. Using the

nificant investment and rental income may

capitalized and instead treated as operat-

earlier example, if your original tax basis is

ing expenses. Capitalized improvements

$1,050,000 and the net proceeds from the

MARCH 2021 | SF APARTMENT MAGAZINE

Retain Your Gains… continued on page 62

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COLUMN

COURT TALK

Collect With Effect w r i t t e n b y C L I F F OR D E . F R I E D

If you haven’t received rent during the pandemic, consider going to Small Claims Court as an alternative to eviction.

The rules in SCC were written so that non-lawyers could represent themselves without having to hire expensive lawyers in nice clothes. The rules are simple and informal and there is free information available on the internet to help you

our tenant owes you rent.

residential evictions during the pan-

navigate the SCC system. The county of-

You have already decided

demic. Even the sheriff will not carry out

fers the services of small claims advisors

not to evict. More precisely,

a residential eviction.

free of charge, and the courts offer free forms for filing.

various eviction moratoria

stop you from evicting your tenant. One

When the California Legislature

option for you is to sue your tenant in

passed AB 3088 last year and SB 91 on

Suing in regular court can cost thou-

small claims court (SCC).

January 28, 2021, it included a provi-

sands of dollars in court costs (filing

sion that would allow landlords to sue

fees, court reporters, jury fees) but fees

The COVID-19 pandemic has caused

their tenants in SCC for unpaid rent

for filing in SCC range from $30 to $70,

many changes in the residential housing

that was due during the pandemic.

depending on the amount in dispute.

market. Some tenants vacated and left

The rules of small claims court were

And while it can take several years for

empty units. Others moved before their

relaxed to allow a landlord to easily

a case to resolve in regular court, a SCC

leases expired leaving unpaid rent.

sue for back rent.

matter is resolved within several weeks

Other tenants remained in place but

While there is a hold on suing for CO-

have not paid rent for many months.

VID-19 evictions or rental debt until July

Where Is Small Claims Court?

Some haven’t paid because of pandemic-

1, 2021 (in regular court), no moratorium

SCC is a special court within the Supe-

related reasons such as illness or loss

prevents a landlord from simply suing

rior Court. It is a court where tradition-

of work. Others haven’t paid because

to collect unpaid rent. The start date for

ally small amounts of money in dispute

they know various eviction moratoria

suing in SCC is August 1, 2021.

are fought over without the parties hav-

after filing.

protect them from displacement. There

ing to hire attorneys. In SCC, you may

are cases where tenants owe more than

If you have not received rent during the

ask a lawyer for advice before you go to

$50,000 in rent! Why pay rent when you

pandemic, consider suing your tenant in

trial, but you cannot have a lawyer repre-

don’t have to and the law protects you?

SCC as an alternative to eviction. Until

sent you at trial.

the pandemic eases and the political will Landlords have waited patiently for

returns to permit some evictions, you

In San Francisco, the SCC and clerk’s

either their rent, or the ability to evict to

may not have a choice but to sue in SCC.

office is located at 400 McAllister Street.

get their units back if the tenants failed

Check before you go to the office be-

to pay. There were a few who could not

Why Use Small Claims Court?

hold on and lost their properties. Others

The law has always permitted land-

the pandemic. Also, trial of your case

lost their rents forever.

lords to sue for rent in SCC, but the

may be conducted remotely via Zoom or

unlawful detainer remedy was faster,

a similar online service.

cause hours may be restricted during

At the time this article is being written,

better, easier, and landlords didn’t

our State lawmakers extended Califor-

want to retain nonpaying tenants in a

Traditionally, a person could not sue in

nia’s eviction moratorium for COVID-19

market where rents were rising rapidly.

SCC for more than $10,000 or file more

rental debts from January 31 through

But AB 3088 changes the rules so that

than two cases in a calendar year for

June 30, 2021. The fact of the matter is

SCC is an attractive option for land-

more than $2,500. AB 3088 changes

our lawmakers do not want to see any

lords who are owed rent.

these jurisdictional restrictions. There is

MARCH 2021 | SF APARTMENT MAGAZINE

sf.0219.rentals-in-sf.pdf

2/6/19

7:16 AM

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sfaa sfaa 2021 What You Need to Know 2021 SFAA UPDATES

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 48.

VIRTUAL MEMBER MEETINGS WEDNESDAY, MARCH 24 1:00 pm WEDNESDAY, APRIL 21 1:00 pm

no dollar limit to the amount of back rent you can sue for. And you can sue more than two tenants in a calendar year. You would sue a defendant in the county where the defendant lives or where a contract was signed or carried out. In the case of unpaid rent, the county is where the rental unit is located.

When May I File? SB 91 (COVID-19 Tenant Relief Act) permits a landlord to seek payment of all unpaid rent from between March 1, 2020 and June 30, 2021 in SCC. The original date for filing these claims was March 1, 2021 but has been extended to August 1, 2021. There could be further extensions depending on politics and whether the pandemic eases. You may file in SCC even if the tenant claims a COVID-19-related inability to pay, provides you with a Declaration, or pays 25% of their unpaid rent.

Who May File? A person who sues in SCC must first make a demand for the unpaid rent, if possible. This is easily done by asking for your rent.

SFAA 2021 LEASE UPDATE

If the tenant refuses, you may file a claim in

The SFAA 2021 lease is now available in print and online. To access the lease, visit www.sfaa.org. For details on how this new lease was updated, check out the February issue of SF Apartment Magazine at www.sfaa.org.

entity, you must personally file and appear

SCC. Unless you are a corporation or other at trial. If a corporation files the claim, an employee, an officer, or a director must act on its behalf.

SFAA OFFICE CLOSURE The SFFA office will remain closed during the shelter-in-place mandate. However, SFAA staff is working round-the-clock to keep the nonprofit running. Timely payment of membership dues is necessary to help the association help you. Email MemberQuestions@sfaa.org to have your questions and concerns promptly addressed.

Who May I Sue for Rent? You, of course, may sue the tenants who promised to pay you rent. This would be the people who signed the lease or rental agreement. But it may also include other occupants who resided in the unit and to whom you provided rental services. It is a good idea to name all occupants who reside at the unit as defendants. You never know who you might be able to collect from.

What Is the First Step? Assuming you made a demand for rent and the tenant refused to pay, your next step is

San Francisco Apartment Association

to complete and file a Plaintiff’s Claim and Order to go to SCC. You may obtain this

265 IVY STREET | SAN FRANCISCO, CA | 94102 | PHONE 415-255-2288 | FAX 415-255-1112 Court Talk… continued on page 56

MARCH 2021 | SF APARTMENT MAGAZINE

2021 Winter CCRM Webinar Series Schedule & Registration Course Course Name #

Date

PRICE

Time

Member

# of NonTotal Member Attendees

Series

Full CCRM Series (Value Savings)

PMR100

Introduction to Ethical Property Management

1/6/2021

2PM-5PM

$85.00

$100.00

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Beginning and Maintaining the Tenancy

1/20/2021

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Renewal of Tenancy and Ending the Tenancy

1/27/2021

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2/3/2021

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2/10/2021

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Budget Development and Implementation

2/17/2021

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Fair Housing: It’s the Law

2/24/2021

2PM-5PM

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Professional Skills for Supervisors

3/3/2021

2PM-5PM

$85.00

$100.00

EXAM

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3/10/2021

2PM-5PM

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SF APARTMENT MAGAZINE | MARCH 2021

COLUMN

MIGHTY SMALL

Bound for Rebound w r i t t e n b y K I L BY S T E N K A M P

With sales prices slowly rebounding, things may be looking up for the 2-4unit market.

erty Management was filling 10 to 20

ry as I might, there are some

though not without frustration, and

vacancies, which has now turned into

days that it’s just hard to be

often acquiesced to lower rental rates.

30 to 40 vacancies. They are doing video walk-throughs and have a new

positive. I know we all share The second round of pandemic-related

pre-screened self-tour program with

wasn’t for the family dog, who gets me

change was citywide internal move-

a lock box system—something they’ve

out of the house every morning, I’d be

ment, tenants leaving one apartment

never done before. For the most part,

completely nuts. We share a healthy

for another in a better location, with

it’s been successful.

walk, a cup of coffee, and, lately, a one-

better amenities, often for less rent.

sided conversation. It’s nice to have a

Many of today’s renters are asking

Gordon Property Management also rec-

great listener around. Through most of

for move-in incentives, which can be

ommends that to stay competitive in the

the pandemic, I’ve scrambled to keep

a real challenge in a rent-controlled

market, owners make upgrades to their

rental units from vacating, and if that

environment. The recent San Francisco

properties that today’s renters want to

fails, it’s back to the drawing board fill-

Apartment Association virtual member-

see. There is big demand now for in-unit

ing those vacancies.

ship meeting touched on the potential

or on-site laundry—tenants no longer

issues that could come with incentives

feel safe at a laundromat. In my own ex-

down the line.

perience, we had tenants demand Blue-

the same sentiments. If it

So far, we’ve managed to stay afloat, but

tooth laundry systems (there was a short

not without challenges. With the pandemic, sheltering in place, constant dis-

If you haven’t had a chance to watch that

period where it was tough to get quar-

tractions, the Zoom learning curve (and

presentation, I highly encourage you to

ters). Some of our machines are leased

so on and so on), it’s been a tumultuous

do so. Staying on top of shifting market

and still in contract. In order to switch to

year for multi-unit housing. I’ve learned

nuances is very important.

Bluetooth, the vendor wanted new extended contracts. If you own your own

to adapt and, most importantly, to have a lot of patience.

A busy workload for Gordon Prop-

Today I had the opportunity to speak

machines, you can look into a Bluetooth

with Gordon Property Management.

retrofit that still takes quarters.

The first round of changes brought on

They have dropped rental rates, as

by the the pandemic was the wave of un-

opposed to offering incentives that

Many owners are moving away from

expected vacancies, which hit quickly.

could come back to haunt them down

carpet to hardwood floors. Hardwood

We lost tenants who moved back in with

the road. A fellow property owner

flooring has better longevity, but it’s also

family or to other parts of the country,

commented that one of the most com-

more in line with what today’s rent-

taking their now-remote jobs with them.

mon obstacles he faces is prospective

ers prefer. Upgrades to kitchens and

tenants who don’t want to pay over-

baths are also important. If your budget

We did our best to keep tenants when

lapping rent. He is offering to pay the

doesn’t allow for a full-on remodel,

we were approached with rent nego-

other landlord rent for the overlap, as

make less expensive cosmetic upgrades,

tiations, and sometimes we held our

opposed to giving a move-in incen-

like new appliances and replacing coun-

ground. We pulled out the stops and

tive. This is a clever approach, however

ter tops or hardware. However, the big-

made upgrades where necessary, re-

there is the potential of some risk and

gest bang for the buck is fresh paint.

thought marketing, and learned to take

therefore a strategy like this should be

walk-through videos. We had success,

handled with caution.

MARCH 2021 | SF APARTMENT MAGAZINE

Mighty Small… continued on page 58

sfaa’s 2021

Lease Review Webinar The SFAA Residential Tenancy Agreement is one of the commonly used leases in San Francisco. Many landlords utilize this lease and this course will enable you to complete the lease details correctly, outline your obligations as an owner, and explain your responsibilities to tenants. This lease is written and updated every year by leading residential real estate attorneys. The instructors are Dave Wasserman and Curtis Dowling of Dowling & Marquez, LLP.

DATE & TIME:

REGISTRATION:

Friday March 19, 2021 10:00 a.m. -11:00 a.m.

For more information contact: Stephanie Alonzo at 415.255.2288 x113 or stephanie@sfaa.org

COSTS:

Members: $65 Non-Members:$95

*Credit Card payment required for Non-Members

sfaa’s

Habitability Issues During the COVID-19 Pandemic HABITABILITY ISSUES DURING THE COVID-19 PANDEMIC

California Civil Code Sections 1941 and 1942 define a landlord’s responsibilities for repairs. Find out what your responsibilities are for providing a safe, sanitary and livable unit for your tenants during the COVID-19 pandemic. Once you complete the registration you will be sent a separate link to register for the Zoom webinar systems. Upon completion you will be sent the event access ID. The instructor is David Semel, Fried & Williams. DATE & TIME:

REGISTRATION:

Tuesday March 16, 2021 1:00 p.m. to 2:00 p.m.

For more information contact Maria Shea at: 415.255.2288 x110 or maria@sfaa.org

COSTS:

Members: $65 Non-Members: $95

*Credit Card payment required for Non-Members

Webinar SF APARTMENT MAGAZINE | MARCH 2021

MARCH 2021 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2021

COLUMN

MARKET VIEW

Better Days Ahead w r i t t e n b y JAY GR E E N B E RG

Last year was a constant battle of trying to fill vacancies and keeping existing tenants, but this columnist is hopeful for a better 2021.

occurred in 2008; however, this year we have a significant decline in dollar volume. Our year end volume was $298 million in 2017, $317 million in 2018, and $349 million in 2019. In 2020, the yearend volume dropped significantly to

020—a year that was beyond

The following are 2020 year-end sta-

$236 million, which translates to a 32%

all our imaginations. After a

tistics for the 5-9-unit-sector and the

decrease in a year-over-year comparison.

brief recap of 2020 highs and

10-plus unit sector versus the same time

lows, this article contains year-

period for 2017, 2018, and 2019.

end value indicators and sales volume

Transaction levels had been very steady over the past three years and, as you can

compared to previous years. While dol-

5-9 Units

guess, they fell off in 2020. We recorded

lar volume and transaction levels were

The average price per square foot has

105 transactions in 2017, 104 transac-

greatly impacted in 2020, value indica-

bounced around since 2017, without any

tions in 2018, and 107 transactions in

tors have held up remarkably well, con-

peaks or valleys. The cost per foot was

2019. This year we recorded 78 trans-

sidering the circumstances. However,

$535 in 2017, $561 in 2018, and $554 for

actions, our lowest level over the past

there has been a significant loss of value

both 2019 and 2020. Gross rent multipli-

decade and a 27% decrease in a year-

due to the flood of vacancies that hit in

ers have been on the decline since 2016,

over-year comparison.

the second half of the year. It has been a

following our peak rental market that

difficult and confusing year for all, and

same year, with the exception of 2018,

10-Plus Units

hopefully the apartment industry and

which was a record-breaking year for

When reading the below data, keep in

we the people will start to see some

sales and value indicators. The average

mind that 2018 was an amazing record-

positive news this year.

multiplier was 17.79 times gross in 2017,

breaking year for value indicators and

18.32 times gross in 2018, and 16.97 in

transaction levels.

Borrowing a line from our recent Com-

2019. In 2020 the trend continued, with

pass San Francisco Apartment Building

the year-end average dropping to 15.71

In 2017, the average price per square

Report that I believe sums up the past

times gross, the lowest level we have

foot was $555. In 2018, there was a sig-

year: “Pandemic, shelter in place, soar-

seen since 2012.

nificant jump to $621 per square foot,

ing unemployment, financial hardship

before retreating to $598 per square foot

for residents and small businesses, new

Similar to the cost per square foot, the

in 2019. In 2020, the price per square

ways of working, office buildings empty,

average price per unit has bounced up

foot dropped again to $544, which is

people move, vacancies skyrocket, rents

and down since 2017, without any peaks

approximately a 9% decrease in a year-

plunge, sales drop, rigorous limits on

or valleys. The average price per unit

over-year comparison.

evictions, courts closed, new landlord–

was $457,000 in 2017, $496,000 in 2018,

tenant laws, dreadful fires, civil unrest,

and $489,000 in 2019. We ended 2020

In a similar pattern, the average GRM

an anxious presidential election and

with the average price per unit coming

went from 16.85 times gross in 2017

transition, interest rates to historic lows,

in at $484,000, which is a nominal de-

to 18.33 times gross in 2018 to 16.56 in

stock market highs, and IPO mania

crease in a year-over-year comparison.

2019. In 2020, GRMs dropped again to a

breaks out again. A year of extremes and

except one since the financial meltdown

year-end multiplier of 15.54 times gross.

a challenging year for the residential

Dollar volume in the 5-9 unit sector had

The average price per unit was $404,000

income market.”

been very strong, increasing every year

in 2017, $471,000 in 2018, and $466,000

MARCH 2021 | SF APARTMENT MAGAZINE

Speak Up!! about SFAA Tell SFAA what you think of the services that it offers. You’ll be helping SFAA reach new members by telling prospective members about your firsthand experience! Please take a few moments to answer the questions below (please be as specific as possible): • Would you recommend SFAA services and products? • What is the biggest benefit that SFAA provides? • How has SFAA helped you with your rental property? • What do you like most about SFAA?

Email your answers to Maria Shea at maria@sfaa.org with the subject line, “Speak Up!” Be sure to include your member name and SFAA ID number. Also, let us know if we may use your testimonial in future SFAA marketing materials.

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read all about it In San Francisco, managing and owning rental property can be a tough business. Keep your manager up to date with the latest news, legislation, trends and analysis of the industry. SFAA members can now send their managers or friends SF Apartment Magazine for only $65 a year.

Subscriptions must be registered and billed to an SFAA member. Sign up today! Online: www.sfaa.org/membership Phone: 415-255-2288

sf.0611.subscription.filler.indd 1

SF APARTMENT MAGAZINE | MARCH 2021

5/20/11 1:16 PM

19 19 18 18 17 17 16 16 15 15 14

in 2019. The price per unit dropped ap-

GRMs

proximately 9% in 2020 to $425,000. 5-9 Units 10+ Units

Dollar volume in the 10-plus-unit sector, as mentioned above, was off the charts in 2018, reaching $1,153,000,000 by year end (that’s one billion one hundred fifty-three million) in sales volume. The previous high came in 2013, when dollar volume reached

2016

2017

2018

2019

2020

Source: CoStar Comps

$703 million. The year-end volume was $624 million in 2017, more than $1.1 billion in 2018, and $572 million in 2019. In 2020, we had a new low for the past decade, with dollar volume coming in at $377 million.

Price Per Sq. Ft.

Transaction levels were very low in 2015

$650

and 2016, but then they picked up again in

$625

5-9 Units

$600

2017. We recorded 88 transactions in 2017,

10+ Units

103 transactions in 2018, and 65 closings in

$575

2019. In 2020, we saw another decade-low

$550

with 46 transactions closing.

$525

The source of the numbers reported come

$500 $475

from Jay Greenberg & Trigg Splenda, San 2016

2017

2018

2019

2020

Francisco Multiple Listing Service, and Costar Comps.

Source: CoStar Comps

My biggest takeaway when reviewing the stats above is that transaction levels have

Price Per Unit

dropped significantly. The 5-9-unit sector

$600,000

had a 27% decrease in closings and a 32% decrease in sales volume. The 10-plus-unit

$500,000

sector had a 29% decrease in closings and

$400,000

a 34% decrease in sales volume. The closing and sales volume are the lowest figures

$300,000

we have seen in a decade for the 10-plus-

5-9 Units

$200,000

unit sector.

10+ Units

$100,000

2016

2017

2018

2019

2020

Source: CoStar Comps

When we look at value indicators in the 5-9unit sector, values have held up with price per foot and price per unit indicators decreasing in the .5% to 1% percent range. The GRM had a decrease of 8%. In the 10-plus-

120 110 100 90 80 70 60 50 40 30 20 10 0

Transactions

unit sector, we have price per foot and price per unit indicators dropping approxiYTD 5-9 Units YTD 10+ Units

6%. While the percentage drop in value indicators seems to be relatively small, the overall decrease in value is significant. To give an example, I have a 16-unit building on the north side of town and the cur-

2016

2017

Source: CoStar Comps

mately 9%, and GRMs dropping a little over

MARCH 2021 | SF APARTMENT MAGAZINE

2018

2019

2020

rent rent roll is $75,000 less annually than it was a year ago due to current market conditions. If I were to assign the 2019 year-end

average GRM to my 2019 income versus the 2020 year-end GRM to my current rent roll, there is a loss in value of approximately $2 million dollars. Additionally, If I were to sell today, the transfer tax would cost $660,000 while a year ago the transfer tax would have been $330,000. Transfer tax for all sales over $10 million has doubled from 2.75% to 5.5%. Based on the figures above, the value of the building has dropped around 17%. Of course, the figures will vary from building to building and most likely total percentage loss in value is probably higher than the percentage loss in any of the value indicators reported above. The second half of 2020 was a constant battle trying to fill vacancies and keep existing tenants. Meanwhile, maintenance and repair expenses were constant. In the past, most of my tenants would wake up, shower, leave for work, and then return in the eve-

Ways to Connect.

ning and go to bed. Most days during the work week, the building was empty. Now, people are home all day, eating three meals a day at home, and the difference in wear and tear is significant. I am grateful for the rents that I am still able to obtain in this market, even though they are much lower than a year ago. When I calculate new rent,

During the pandemic, email SFAA at MemberQuestions@ sfaa.org to have your questions and concerns promptly addressed, or call the office at 415-255-2288. You can

loss of rent from vacancy, and free rent or other concessions, there is a decrease in rent of approximately 20-25%. The good news is I filled all my vacancies with high

also follow the happenings of your fellow SFAA members and find out the latest in the industry by connecting with

quality upwardly mobile tenants and I cur-

SFAA on Facebook. Search San Francisco Apartment

rently have no empty units. Zumper has reported that San Francisco still has the highest median rent price in

Association and “Like” it to add it to your news feed. Follow SFAA on Twitter at www.twitter.com/SFAptAssoc.

the country for a one-bedroom unit at $2,700. The following cities fill out the top

•

Email SFAA at MemberQuestions@sfaa.org

and Oakland.

•

Connect with SFAA on Facebook.

At this point, we all must weather the storm.

•

Follow SFAA on Twitter at www.twitter.com/SFAptAssoc.

five highest median one-bedroom rents in the country: New York, Boston, San Jose,

I do not see desperation from sellers in the sales market and we are hopeful to see improvement in the coming year. For additional information related to any data points and/or market news, please contact Jay Greenberg at jaygreenberg@apr.com.

SF APARTMENT MAGAZINE | MARCH 2021

sfaa 2 2021calendar

sfaa

March

MONDAY, MARCH 1 Board of Directors Mtg. 11:30 a.m.

WEDNESDAY, MARCH 3 Lunch & Learn Move-In Checklist Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

WEDNESDAY, MARCH 10 Lunch & Learn Rent Collection Checklist Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

WEDNESDAY, MARCH 17 Lunch & Learn Annual Increases Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

FRIDAY, MARCH 19 SFAA 2021 Lease Review Webinar Zoom Webinar System 10:00 a.m. to 11:00 a.m. Members $65 Non Members $95

TUESDAY, MARCH 23 SFAA Online Lease Demonstration Webinar Zoom Webinar System 10:00 a.m. to 11:00 a.m. FREE SFAA Members Only

WEDNESDAY, MARCH 24 Virtual Member Mtg. 1:00 p.m.

FRIDAY, MARCH 26 Intellirent Tenant Screening Demonstration Webinar Zoom Webinar System 10:00 a.m. to 11:00 a.m. FREE SFAA Members Only

WEDNESDAY, MARCH 31 Lunch & Learn Approved Vendors Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

TUESDAY, MARCH 16 Habitability Issues During Covid-19 Webinar Zoom Webinar System 1:00 p.m. to 2:00 p.m. Members $65 Non Members $95

WEDNESDAY, MARCH 24 Lunch & Learn Capital Improvement Petitions Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

April MONDAY, APRIL 5 Board of Directors Mtg. 11:30 a.m.

WEDNESDAY, APRIL 7 Lunch & Learn Maintenance Requests Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

WEDNESDAY, APRIL 14 Lunch & Learn Complaints Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

WEDNESDAY, APRIL 21 Virtual Member Meeting 1:00 p.m.

WEDNESDAY, APRIL 28 Lunch & Learn ESA v.s. Pets Webinar Zoom Webinar System 12:00 p.m. to 1:00 p.m. Members $40 Non Members $75

SFAA MEMBER MEETINGS WILL BE HELD VIRTUALLY UNTIL FURTHER NOTICE DUE TO COVID-19. FOR TOPICS AND SCHEDULES, VISIT SFAA.ORG.

MARCH 2021 | SF APARTMENT MAGAZINE

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join online at sfaa.org or call 415.255.2288

2021 join online at sfaa.org or call 415.255.2288

SAN FRANCISCO’S

RENT BOARD FEE

$25.00

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 2019-2020

$25.00

2018-2019

$22.50

2017-2018

$22.50

2016-2017

$20.00

2015-2016

$18.50

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

CAPITAL IMPROVEMENTS

The capital improvement interest rates for 3/1/21 through 2/28/22 are listed below: AMORTIZATION

INT. RATE

MULTIPLIER

7 YEARS

0.8%

.01225

10 YEARS

1.0%

.00876

15 YEARS

1.2%

.00607

20 YEARS

1.4%

.00478

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

03/01/21 - 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%

2014-2015

$18.00

2013-2014

$14.50

03/01/16 - 02/28/17

0.2%

2012-2013

$14.50

03/01/15 - 02/29/16

0.1%

2011-2012

$14.50

03/01/14 - 02/28/15

0.3%

2010-2011

$14.50

03/01/13 - 02/28/14

0.4%

2009-2010

$14.50

03/01/12 - 02/28/13

0.4%

2008-2009

$14.50

03/01/11 - 02/29/12

0.4%

2007-2008

$13.00

2006-2007

$11.00

2005-2006

03/01/10 - 02/28/11

0.9%

03/01/09 - 02/28/10

3.1%

03/01/08 - 02/28/09

5.2%

$10.00

03/01/07 - 02/29/08

5.2%

2004-2005

$11.00

03/01/06 - 02/28/07

3.7%

2003-2004

$21.50

2002-2003

$21.50

CONTACT THE SAN FRANCISCO RENT BOARD FOR MORE INFORMATION

ALLOWABLE RENT INCREASES

2021 – 2022: .7%

Effective March 1, 2021, through February 28, 2022, the allowable annual rent increase is .7%. 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

03/01/21 - 02/28/22

.7%

03/01/20 - 02/29/21

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

CONTACT THE SAN FRANCISCO RENT BOARD FOR MORE INFORMATION

415-252-4600 sfgov.org/rentboard

415-252-4600

& information

sfgov.org/rentboard

SF APARTMENT MAGAZINE | MARCH 2021

sfaa professional

services directory 1031 TAX DEFERRED EXCHANGE SERVICES

FIRST AMERICAN EXCHANGE COMPANY 415-244-1339 www./firstexchange.com/ HERITAGE CAPITAL ADVISORS Eric Scaff 415-834-1031 www.heritagecap.com LAWYERS EQUITY EXCHANGE Brian Fogarty 415-701-1234 www.lex1031.com REAL ESTATE TRANSITION SOLUTIONS Austin Bowlin (206) 686-2211 aabowlin@re-transition.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 www.que-arch.com

415-695-2700

ASSOCIATIONS

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

ATTORNEYS

BARTH CALDERON, LLP Paul Hitchcock Paul@barthattorneys.com

415-577-4685

BORNSTEIN LAW Daniel Bornstein, Esq. www.bornstein.law

415-409-7611

CHONG LAW Dolores Chong

415-438-7807

MARCH 2021 | SF APARTMENT MAGAZINE

DENNIS C. HYDE Dennis C. Hyde hydelaw@pacbell.net

415-753-3811

DOWLING & MARQUEZ, LLP Jak S. Marquez 415-977-0444 x232 www.dowlingmarquez.com FRANK KIM ESQ., EVICTION ASSISTANCE Jo Biel 415-752-6070 FISHER & PHILLIPS, LLP Jason Gellar www.fisherphillips.com

415-490-9020

FRIED & WILLIAMS LLP Clifford E. Fried www.friedwilliams.com

415-421-0100

GOLDFARB & LIPMAN LLP Erica Williams 510-836-6336 eorcharton@goldfarblipman.com goldfarblipman.com GOLDSTEIN, GELLMAN, ET AL, LLP Brett Gladstone 415-673-5600 x 238 www.g3mh.com HERZIG & BERLESE Barbara Herzig bherzig@hbcondolaw.com

415-861-8800

ILENE M. HOCHSTEIN, ATTORNEY AT LAW Ilene Hochstein (650) 877-8288 ilene@hochsteinlaw.net JACOBSON LAW PC Isaac@jacobsonlawsf.com 415-421-0100 KAUFMAN, DOLOWICH, VOLUCK Ashley Klein 415-926-7612 aklein@kdvlaw.com LAW OFFICES OF FRANCISCO GUTIERREZ Francisco Gutierrez 415-805-6508 francisco@gtzlegal.com LAW OFFICE OF MICHAEL HEATH Michael Heath 415-931-4207 Mheath_law@sbcglobal.net LAW OFFICES OF DENISE A. LEADBETTER Denise Leadbetter 415-713-8680 www.leadbetterlaw.com 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

LAW OFFICE OF KEVIN P. GREENQUIST Kevin Greenquist 415-977-0444x234 www.ztalaw.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 MILLAR AND ASSOCIATES, APLC James Millar 415-981-8100 x101 Millar-law.com NICHOLAS GOLDMAN LAW Nicholas Goldman 415-350-8740 nicholas@nicholasgoldmanlaw.com O’GRADY LAW GROUP John O’Grady john@ogradylaw.com www.ogradylaw.com

415-986-8500

REUBEN, JUNIUS & ROSE, LLP Kevin Rose 415-567-9000 www.reubenlaw.com TOUR-SARKISSIAN LAW OFFICES Christine Tour-Sarkissian 415-626-7744 www.tslo.com TRN LAW ASSOCIATES Tiffany Norman tiffany@trnlaw.com

415-823-4566

DAVE WASSERMAN Dave Wasserman 415-567-9600 dwasserman@wassermanstern.com WIEGEL LAW GROUP Andrew J. Wiegel www.wiegellawgroup.com

415-552-8230

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 SOLUTIONSPREMIER Aurora Vidaca 888-970-1927 aurora@crownandshieldpestsolutions.com www.crownandshieldpestsolutions.com SCENT TEK Brent & Kevin Youngblood 415-933-0879 www.scent-tek.com

CLEANING SERVICES

BIO-ONE EAST BAY Sandy Magan info@biooneeastbay.com

510-274-1548

OPTIMUS BUILDING SERVICES Claudia Giraldo 650-290-4607 optimusbuildingservices.com

CONSULTANTS: PERMITS & PLANNING

CENTER FOR SUSTAINABLE ENERGY Sarah Bliss 858-633-8099 sarah.bliss@energycenter.org EDRINGTON AND ASSOCIATES Steven Edrington 510-749-4880 steve@edringtonandassociates.com

CONTRACTORS

AGUILEAR CONSTRUCTION COMPANY Javier Aguilear 707-495-3932 javier@aguileraco.com SKYLIGHT REMODLING Josh Levitan contact@skylight.com www.skylight.com

800-961-2580

CORPORATE RENTALS AMSI Robb Fleischer www.amsires.com

415-447-2020

GOROVERGO Laura Ericson 832-977-6830 laura.ericson@echemail.com www.gorovergo.com

CREDIT REPORTING

INTELLIRENT Cassandra Joachim www.myintellirent.com

415-849-4400

ENERGY SERVICES / GAS & ELECTRIC

PACIFIC GAS & ELECTRIC COMPANY Sebastian Conn 415-972-5201 www.pge.com

ENVIRONMENTAL CONSULTING

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

FIRE ESCAPE INSPECTION & MAINTENANCE ESCAPE ARTISTS Jabal Engelhard www.sfescapeartists.com

415-279-6113

LENDING / FINANCIAL SERVICES

COUNTERPOINTE SRE David Snow 855-431-4000 www.counterpointeSRE.com

GREAT ESCAPE SERVICES Rich Henderson 415-566-1479 www.greatescapeservice.com

FIRST FOUNDATION BANK Michelle Li www.ff-inc.com

FIRE PROTECTION CONTRACTORS

LENDING / FULL SERVICE BANKS

415-794-2176

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

LUTHER BURBANK SAVINGS Gabriel Basso 510-601-2400 www.lutherburbanksavings.com

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

LENDING / INSTITUTIONS

BELL FIRE AND LIFE SAFETY Marc Belluomin 650-580-5306 bellfire365@gmail.com COMMERCIAL FIRE PROTECTION, INC. Laine Sims 925-300-9534 www.fireprotected.com EMERGENCY SYSTEMS, INC. Eric Hagerman (415) 564-0400 esmfire@earthlink.net MAZZY’S FIRE PROTECTION Scott Mazzarella 415-665-5553 www.mazzysfire.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

INSURANCE COMPANIES

CHASE APARTMENT LENDING Andre C. Ferrigno 415-644-2171 CHASE COMMERCIAL TERM LENDING Sharon Groenendyk 415-315-8464 www.chase.com/commercialbanking CHASE COMMERCIAL LENDING Ingrid Marlow 650-737-6212

LOCKSMITHS

CROWN LOCK & HARDWARE Joe Schoepp 415-221-9086 WARMAN SECURITY Peter Badertscher www.warmansecurity.com

415-775-8513

MAINTENANCE REPAIR SERVICE

CITY REPAIR SERVICES Fernando Fonesca 415-602-6524 contact@citycarerepair.com MAVEN MAINTENANCE, INC. Craig Lipton 415-829-2207 www.mavenmaintenance.com

ARM MULTI INSURANCE SERVICES Lisa Isom 866-913-6293 www.arm-i.com

ONE STOP MAINTENANCE & PROPERTY SERVICES Lupe Villaloblos 408-829-0727 www.sf1stop.com

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

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

BIDDLE-SHAW INSURANCE SERVICES, INC Greg Holl 415-586-7200 www.biddleshaw.com

MEDIATION

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 www.xfinity.com

925-495-9922

THE BAR ASSOCIATION OF SAN FRANCISCO CONFLICT INTERVENTION SERVICE Matthew Tom 415-782-8940 mtom@sfbar.org

ORGANIC WASTE SOLUTIONS

ECOSAFE ZERO WASTE, INC. Daniel Redick 310-569-0624 ecosafezerowaste.com Daniel@EcoSafeZeroWaste.com

PAINTING CONTRACTORS KRUITPAINTING, INC. Pieter Kruit www.kruitpainting.com

415-254-7818

SF APARTMENT MAGAZINE | MARCH 2021

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 www.tarapropainting.com

415-334-3277

PEST CONTROL

ATCO PEST & TERMITE CONTROL & HOME RESTORATION Richard Estrada 415-898-2282 www.atcopestcontrol.com

CROWN & SHIELD PEST SOLUTIONS-PREMIER Aurora Vidaca 888-970-1927 aurora@crownandshieldpestsolutions.com

PLUMBING SERVICES

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

R & L PLUMBING Larry Bustillos 415- 651-4977 larry@rl.plumbing www.rlplumbingsanfrancisco.com

AMORE REAL ESTATE, INC Jerry Hsieh 415-567-4800 www.amoresf.com

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

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

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

AMERICAN MARKETING SYSTEMS INC. Robb Fleischer 415-447-2020 www.amsires.com

PONTAR REAL ESTATE Merri Pontar 415-421-2877 www.pontarrealestate.com

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

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

DEWOLF William Talmage www.dewolfsf.com

415-221-2032

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 www.lingschrealty.com

415-648-1516

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 www.slrealty-sf.com

415-386-3111

STRUCTURE PROPERTIES Corey Eckert 415-794-0064 www.structureproperties.com SUTRO PROPERTY MANAGEMENT, INC. Salman Shariat 415-341-8774 www.sutroproperties.com WEST & PRASZKER REALTORS Michael Klestoff 415-661-5300 www.wprealtors.com WEST COAST PROPERTY MANAGEMENT Eric Andresen 415-885-6970 www.wcpm.com

members

MARCH 2021 | SF APARTMENT MAGAZINE

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

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

property management

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

PROPERTY MANAGEMENT

BORN PROPERTY MANAGEMENT Jason Born 650-271-7048 x 111 Jason@bornpm.com BERENDT PROPERTIES Craig Berendt craig.berendt@gmail.com

415-608-3050

BROOKFIELD PROPERTY GROUPPRESIDIO LANDMARK Jon King 855-327-5376 jon.king@brookfieldproperties.com CHANDLER PROPERTIES Carolyn Chandler 415-921-5733 www.chandlerproperties.com CITYWIDE PROPERTY MANAGEMENT Carol Cosgrove 415-552-7300 www.citywidesf.com DEWOLF REALTY CO. INC. William A. Talmage www.dewolfsf.com

415-221-2032

EBALDC Felicia Scruggs FScruggs@ebaldc.org

510-287-5353

EQUITY ONE Brenda M. Obra www.equity1sf.com

415-441-1200

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 Mike McCamish 415-828-8757 www.greentreepmco.com GM GREEN REAL ESTATE INC. George Green 415-608-6485 ggreen@gmgreen.com www.gmgreen.com HANFORD•FREUND & CO. J. Timothy Falvey www.hanfordfreund.com

415-981-5780

HOGAN & VEST INC. Simon Wong hoganvest.com

415-421-7116

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

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

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

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

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

LINGSCH REALTY Natalie M. Dress www.lingschrealty.com

415-648-1516

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

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

MERIDIAN MANAGEMENT GROUP Randall Chapman 415-434-9700 www.mmgprop.com

THRIVE PROPERTY MANAGEMENT, INC. Giovani Franco 650-296-3880 www.thrivecommunities.com/

MW PROPERTY GROUP Marc Wilson 415-640-5807 marc@mwpropertygroupco.com

W. PROPERTY MANAGEMENT Gary Petrison 707-545-6187 gary@wpropertymanagement.com

MYND MANAGEMENT, INC. Stacy Winship 510-306-4440 www.mynd.co

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

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

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

PACIFIC UNION INTERNATIONAL PROPERTY MANAGEMENT Susan Lucas 415-722-4724 www.pacunionpm.com

WOOD PARTNERS Melissa Rankin 628-251-1101 melissa.rankin@woodpartners.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 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 KristineAbbey 650-290-3084 www.rockawayresidential.com ROCKWELL PROPERTIES Mark Kaplan 415-398-2400 propertymanagement@rockwellproperties.com SC PROPERTY MANAGEMENT Robert Guglielmi 650-342-3030 bob.guglielmi@scpropsm.com SHARVEST PROPERTY MANAGEMENT, LLC Timothy D. Gilmartin 650-347-2020 tim@thegilmartins.com SIERRA PROPERTY PROFESSIONALS Sonali Herrera sierrappinc@gmail.com

PROPERTY MANAGEMENT SOFTWARE

COLLIERS INTERNATIONAL Payam Nejad 415-288-7872 www.colliers.com/payam.nejad COMPASS COMMERCIAL BROKERAGE Adam Filly 415-516-9843 adam@adamfilly.com COMPASS COMMERCIAL BROKERAGE Chris J. Connor chris.oconnor@compass.com COMPASS COMMERCIAL BROKERAGE John Antonini 415-794-9510 john@antoninisf.com CORCORAN COMMERCIAL Jeremy Williams (415) 932-9846 jeremy@jeremywilliams.com jeremywilliams.com CORCORAN GLOBAL LIVING COMMERCIAL Terrence Jones 415-786-2216 terrence@terrencejonesSF.com www.terrencejones.com

APPFOLIO Mindy Sorenson 805-364-6098 mindy.sorenson@appfolio.com

FERRIGNO REAL ESTATE Chris Ferrigno 415-641-0661 www.ferrignorealestate.com

HEMLANE, INC. Dana Dunford dana@hemlane.com

385-355-4361

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

STESSA Victor Perez www.stessa.com

626-524-4931

ICON REAL ESTATE INC. Jason Quashnofsky jason@iconsf.com

YARDI Kelly Krier kelly.krier@yardi.com

805-699-2040

YMPG MANAGEMENT Yelena Glezer 415-260-6325 yglezer@ympg-management.com

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

REAL ESTATE BROKERS & AGENTS

ALAIN PINEL INVESTMENT GROUP Mark Bonn 415-614-4354 mbonn@apr.com ALAIN PINEL INVESTMENT GROUP Jay Greenberg 415-593-8615 www.aprinvestmentgroup.com ALAIN PINEL INVESTMENT GROUP Mirella Webb 415-814-6699 mwebb@apr.com BAY AREA PREMIER PROPERTIES Peter Fisler 415-606-6621 www.bayareapremierproperties.com BIG TREE PROPERTIES Evan Matteo 415-305-4931 evan@bigtreeproperties.com

(415) 370-7077

KILBY STENKAMP-VANGUARD PROPERTIES Kilby Stenkamp 415-370-7582 LESLIE BURNLEY Leslie Burnley leslie.j.burnley@gmail.com leslieburnley.com

415-717-8709

MARCUS & MILLICHAP David Nelson 415-312-2245 dnelson@MarcusMillichap.com MARCUS & MILLICHAP Sanford Skeie 415-625-2153 www.marcusmillichap.com NEWMARK KNIGHT FRANK Matthew C. Sheridan 415-273-2179 aptgroupsf.com PACIFIC UNION COMMERCIAL Stephen Pugh spugh@pacunion.com S&L REALTY Robert Link www.slrealty-sf.com

415-386-3111

SHAMROCK REAL ESTATE COMPANY Trent Moore 415-359-2400 www.shamrocksf.com STEELE PROPERTIES Ryan Steele 415-881-7762 www.steeleproperties.com WEST & PRASZKER REALTORS Michael Klestoff 415-312-2245 klestoffmre@aol.com

SF APARTMENT MAGAZINE | MARCH 2021

sfaa sfaa 2021 membership application

Thank you for joining the San Francisco Apartment Association. SFAA is dedicated to educating, advocating for and supporting the Rental Housing Community so that its members operate ethically, fairly and profitably. Please consult a tax preparer in advance to determine deductibility for your tax situation. Membership fees are subject to change. MEMBERSHIP LEVEL & COST

Units

Base Fee

Units Fee

$420 +

$6.50 per unit =

23 +

$375 +

$8.50 per unit =

TOTAL UNIT AMOUNT:

Base Fee

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

$520 +

$4.00 per unit = $6.00 per unit =

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

TOTAL AMOUNT:

ASSOCIATE MEMBER DUES: $495

RENTAL LISTING SERVICES

CONTACT INFORMATION

APARTMENT LIST Alex Mashburn 678-467-0411 amashburn@apartmentlist.com

Contact Person Company/Title

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

Address State

Zip

MAZAL55 PROPERTIES Oren S. Bordo orenb55@gmail.com

Mobile Phone Email Address

Website PAYMENT METHOD Amex

Visa

3 Digit Security Code

Card #

Expiration Date

Cardholder Name

Billing Zip Code

Authorized Signature

Date HOW DID YOU HEAR ABOUT US?

Referral From

Postcard/Mailer

Magazine

Website

Rent Board

Other

San Francisco Apartment Association 265 IVY STREET | SAN FRANCISCO, CA | 94102 | PHONE 415-255-2288 | FAX 415-255-1112

REFINISHING / RESURFACING SERVICE

Unit Fee

$475 +

Check

URBAN GROUP REAL ESTATE Louis Cornejo 415-863-1775 louis@urbangroupsf.com

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

1-22

City

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

TOTAL AMOUNT:

23 + TOTAL UNIT AMOUNT:

ALAIN PINEL INVESTMENT GROUP Trigg Splenda 415-593-8616

RENT BOARD PETITIONS

MANAGEMENT COMPANY DUES Units

REAL ESTATE INVESTMENTS

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

REGULAR MEMBER DUES

1-22

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

MARCH 2021 | SF APARTMENT MAGAZINE

415-279-2791

RESIDENTIAL LEASING

BERENDT PROPERTIES Craig Berendt 415-608-3050 www.berendtproperties.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 www.jwavro.com

415-509-3456

LINGSCH REALTY Natalie M. Drees www.lingschrealty.com

415-648-1516

RELISTO Eric Baird www.relisto.com

415-236-6116

RENTALS IN S.F. Jackie Tom www.rentalsinsf.com

415-409-3263

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

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

SECURITY

ADT-MULTI FAMILY Jeanette Mendez jjmendez@adt.com www.adt.com/smart-

562-712-7504

SEISMIC RETROFIT & STRUCTURAL ENGINEERING BAI CONSTRUCTION Behnam Afshar www.baiconstruction.com

510-595-1994

CONTRACTOR OR VENDOR?

ACCOUNTANTS

Shwiff, Levy & Po

SGDM, LLC George Mak www.sgdmllc.com

415-462-0619

W. CHARLES PERRY Charles Perry www.wcharlesperry.com

650-638-9546

WEST COAST PREMIER CONSTRUCTION, INC. Homy Sikaroudi, PhD, PE 510-271-0950 www.wcpc-inc.com

SUBMETERS

ALARM COMPANIES

AEC Alarms Emergency Systems ARCHITECTURE & DESIGN SERVICES

Openscope Studio ATTORNEYS

Fried & Williams, LLP

415-937-7283

TENANT PLACEMENT & LISTING 972-820-3015

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

59 19 42 37 42

CONSTRUCTION & RENOVATION SERVICES

One Stop Maintenance West Coast Premier Construction

LIVABLE Daniel Sharabi www.livable.com

REALPAGE Stacy Blackwell www.realpage.com

ad index NEED A PROFESSIONAL

FIRE ESCAPE SERVICE

Great Escape Fire Escape Services LOCKSMITHS

Crown Lock & Safe Warman Security PAINTING CONTRACTORS

Kruit Painting, Inc. Pac West Painting Tara Pro Painting PETITION SERVICES

Rent Board Passthroughs

26 61

59 59 61 61 18 59 14

PROPERTY MANAGEMENT & MAINTENANCE & RESIDENTIAL LEASING

Berendt Properties 6 Gaetani Real Estate, Inc. 64 Maven Maintenance 35 Real Management Company 43 Rentals in SF 37 Structure Properties 26 Yardi 13 REAL ESTATE BROKERS

Amore Real Estate 58 Colliers / DeVincenti 2 Compass / Antonini 63 Compass / Filly 11 Compass / Greenberg & Splenda 3 Compass / Pugh 31 Corcoran / The Jones Team 15 Kay Properties & Investments, LLC 17 Kenney & Everest 58 Marcus & Millichap 20-21 Real Estate Transition Solutions 27 Vanguard Commercial / Chapleau 9 Vanguard Properties / Stack 61 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. Advertisers in red are Associate Members of SFAA.

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. SF APARTMENT MAGAZINE | MARCH 2021

Court Talk… continued from page 38

Substituted service is possible where some-

to the money. This paper is called a “judg-

one other than your tenant answers the

ment.” If you prevail, you are a judgment

form (Form SC-100) online. Claims must

door. Using this method, the person who

creditor and the tenant is the judgment

be made under penalty of perjury. Stick to

comes to the door at the tenant’s residence

debtor. Your tenant may or may not have

the truth or risk losing credibility. Any at-

or place of work is given a copy of the claim

your money in the bank or under the mat-

tachments in the form of evidence must be

and another copy is mailed to the tenant

tress. You will have to wait until the time

under penalty of perjury.

at the place where the claim form was left.

for appeal ends or the appeal is decided

Service is complete ten days after the copy

in your favor. A judgment creditor cannot

of the claim is mailed.

collect the money judgment until after this

One attachment that will be required under newly enacted SB 91 is documenta-

period expires.

tion showing that the landlord has made

What Happens Next?

a good faith effort to investigate whether

It is possible that at this point, your tenant

What Appeal?!

rental assistance is available to the tenant,

knows you mean business. Maybe you’ll

There is one big negative to suing in SCC.

seek assistance for the tenant, or coop-

get a check or a phone call about settling

While the tenant can file an appeal of the

erate with the tenant’s efforts to retain

up. Most tenants want to avoid a negative

judgment for rent owed, the landlord has

assistance. This requirement is bound to

mark on their credit. There is nothing like

no right to appeal. But it is likely that if the

create a controversy because it arguably

a lawsuit, even one in SCC, to prompt pay-

landlord won at trial, he or she will also win

turns landlords into social workers for

ment. If you are going to negotiate a buyout

on appeal.

their tenants.

at this point, check to see if there is a local

The Court will stamp your claim form

move-out ordinance that restricts how you

On appeal, the case is tried all over again.

commence and negotiate a deal to leave.

Different judge. Probably, but not neces-

with a case number and assign a trial

sarily, the same evidence. And lawyers are

date, time, and place when you file. When

But it is also possible that your tenant will

permitted to represent parties at the ap-

you file, you will be asked to pay a filing

want to stay and fight. Your tenant may

peal hearing. Usually the result on appeal

fee. Checks are payable to the “Clerk,

even file a claim against you! This is called

matches the judgment in SCC. The differ-

Superior Court.” Credit card payments are

a “Defendant’s Claim.” The purpose of a

ence is someone may have paid an attorney

taken in person only and not by phone.

Defendant’s Claim is to resolve all disagree-

for the appeal.

ments between the parties at the same After you file the claim, you will need to

time. This claim would be mailed to you

What Advice Can You Give Me?

serve your tenants so they find out about

and you would have time to think about a

I can’t give you legal advice in this article.

the lawsuit. If you fail to serve your ten-

defense before the assigned trial date.

If you want advice on your particular situ-

ants, or fail to serve them properly, you

ation, consult with an attorney. One fact

can be dismissed or delayed. Serving

What Happens at Trial?

simply means giving a copy of the claim

SCC is informal. In some counties, Zoom-

of your SCC trial, and I don’t know the facts

to your tenants. The law only permits ser-

type services may be used instead of live

of your case. If you are suing for a lot of

vice using approved methods. You may

appearances. Many trials have been post-

money in SCC, it would be worth it to hire

not serve the claim yourself.

poned due to the pandemic, and we don’t

an attorney for an hour or so to advise you

know exactly how trials will be conducted

on how to prepare and present your case.

can make a big difference in the outcome

You may ask a federal marshal or county

going forward. You will be notified ahead

sheriff to serve the tenant. A nominal fee

of time if your trial will be conducted on-

Go to the court website and look up any

will be charged. You may use any person

line or if you have to come to court with

recent announcements about SCC and

who is not a party to your case and who is

your mask and sanitizer.

changes in rules and hours of service.

tered process server will charge a fee for

You must have with you at trial all wit-

If you really want to do this on your own

service. You could ask a friend or family

nesses, leases, rent ledgers, receipts, letters,

without getting legal advice, watch some-

member to serve it for free. You will need

and other documents to prove that your

one else’s trial in SCC and learn from their

the person serving to give you a written

tenant owes rent. Because of the nature of

mistakes or good habits. Or, sign up for any

proof of service to file with the court.

a claim for back rent, you shouldn’t need a

class SFAA may offer on preparing your

witness other than yourself, the lease, and

rent case for SCC. For a schedule of upcom-

your testimony that rent was not paid.

ing classes, turn to the calendar on page 48

at least 18 years of age or older. A regis-

It is also possible to have the court clerk serve your tenants by certified mail. This

or email Maria Shea at maria@sfaa.org.

is done for a small fee. You may check

Where Is My Rent?

with the court before the trial to see if

The judge in SCC will not give you your

your tenant returned a signed receipt for

rent money. All the judge can do is give you

the claim.

a piece of paper that says you are entitled

MARCH 2021 | SF APARTMENT MAGAZINE

The information contained in this column is general in nature. Consult the advice of an attorney for any specific problem. Clifford E. Fried is with Fried & Williams, LLP and can be contacted at 415-421-0100.

2021 Winter CCRM Webinar Series Schedule & Registration Course Course Name #

Date

PRICE

Time

Member

# of NonTotal Member Attendees

Series

Full CCRM Series (Value Savings)

PMR100

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1/12/2021

6PM-9PM

$85.00

$100.00

PMR101

Renting the Property

1/19/2021

6PM-9PM

$85.00

$100.00

PMR102

Beginning and Maintaining the Tenancy

1/26/2021

6PM-9PM

$85.00

$100.00

PMR103

Renewal of Tenancy and Ending the Tenancy

2/2/2021

6PM-9PM

$85.00

$100.00

PMR104

Maintenance Management: Maintaining the Property

2/9/2021

6PM-9PM

$85.00

$100.00

PMR105

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2/16/2021

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$85.00

$100.00

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$85.00

$100.00

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Fair Housing: It’s the Law

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Class Location Zoom Webinar System Upon registration the Zoom link will be emailed to the student Class is every Tuesday

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Online: www.sfaa.org Call: 415-255-2288 x.110 Email: maria@sfaa.org

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

Attendee Information: o Member

Attendee Name: Title:

Company Name:

Address

City:

Phone:

Fax:

E-Mail:

Local Association ID Number:

Payment Information: o Credit Card

Zip:

o Mailing Check o Series Invoicing (members only benefit)

Credit card number: Signature:

o Non Member

Exp. Date Name printed:

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SF APARTMENT MAGAZINE | MARCH 2021

Mighty Small… continued from page 40

We recently rented a flat with gorgeous views; unfortunately, it has classic purpleand-pink tiles in the bathroom, which was something we had to work with. The concept of keeping something long enough that it will eventually come back in style just doesn’t work with pink tile. We’ve had so much turnover in the building that we really don’t have the budget to do a full re-

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ings that sold was down 28.2% from 2019. The median sale price ticked down a little over 1%, though the price per square foot and price per unit increased by about 2%.

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ing the same from colleagues. The below month-over-month comparison in sales shows the same. In the past month, sales prices are up close to 3%.

Everest Mwamba, Realtor® DRE #01717299 (415) 377-2177 cell everest@everestmwamba.com

In closing: stay positive, stay informed, and reach out to peers, friends, and colleagues for support. Most of the people I talk to are happy to share information. Lastly, rely on SFAA. They are a great re-

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MARCH 2021 | SF APARTMENT MAGAZINE

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source for up-to-date information. Kilby Stenkamp is a realtor at Vanguard Properties. She can be reached at kilby@vanguardsf.com or 415-370-7582.

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2021 sfaa rental forms

Member Name Member # Email

BEGINNING OF TENANCY FORMS

MEMBER PRICE

NON-MEMBER PRICE

Application to Rent

$15 per 25

$40 per 25

SFAA Residental Rental Agreement- 2020

$25 each

$100 each

SFAA Residental Rental Agreement- 10 Pack

$225 pack

N/A

CAA Lease Agreement

$15 per 25

$40 per 25

CAA Rental Agreement- Month to Month

$15 per 25

$40 per 25

Guarantee of Rental Agreement

$15 per 25

$40 per 25

Holding Deposit

$15 per 25

$40 per 25

Lead Pamphlet - Protect your Family- 25 pack

$25 per 25

$40 per 25

Addendum to Rental Agreement

$15 per 25

$40 per 25

Parking Agreement

$15 per 25

$40 per 25

Pet Agreement

$15 per 25

$40 per 25

Storage Agreement

$15 per 25

$40 per 25

Assistive Animal Request & Documentation Packet

$15 per 25

$40 per 25

Move In/Move Out

$15 per 25

$40 per 25

Fire Safety Disclosure - SF

$15 per 25

$40 per 25

24 Hour Notice to Enter

$15 per 25

$40 per 25

AB 1482 - Notice of Exemption

$15 per 25

$40 per 25

AB 1482 - Properties Subject to

$15 per 25

$40 per 25

Emergency Procedure Info for Tenants

$15 per 25

$40 per 25

3 Day notice - Pay Rent or Quit

$15 per 25

$40 per 25

3 Day Notice - Perform Covenants or Quit

$15 per 25

$40 per 25

30 Day Notice - Change of Monthly Rent - SF

$15 per 25

$40 per 25

30 Day Change of Monthly Rent under AB-1482

$15 per 25

$40 per 25

90 Day Notice - Change of Monthly Rent- SF

$15 per 25

$40 per 25

Proof of Service

$15 per 25

$40 per 25

Security Deposit Interest & RB Fee - SF Only

$15 per 25

$40 per 25

Acknowledgement of Residents Intent to Vacate

$15 per 25

$40 per 25

Notice of Resident Option for Initial Inspection

$15 per 25

$40 per 25

Notice of Intial Inspection to Residents

$15 per 25

$40 per 25

Itemized Disposition of Security Deposit

$15 per 25

$40 per 25

Notice of Belief of Abandonment

$15 per 25

$40 per 25

On-Site Resident Mgr. Employee Agreement (set)

$15 per 25

$40 per 25

Estoppel Certifcation

$15 per 25

$40 per 25

Prop 65 Sign - Plastic

$10 each

$25 each

Prop 65 Warning Addendum

$15 per 25

$40 per 25

QUANITY

COST

DURING TENANCY FORMS

END OF TENANCY FORMS

MISCELLANEOUS FORMS

SFAA Members can download and access forms directly from the SFAA and CAA websites. Please log in to account, go to Resources and click Downloadable Forms.

Internal Order Date: Use Only

Taken by: Credit Card

Cash

Prices listed are for SFAA members

Sub-Total: 8.75% Tax: Postage Flat Rate:

•

Check

Invoice

Prices differ for non-members

•

All sales are final

San Francisco Apartment Association

MARCH 2021 | SF APARTMENT MAGAZINE 265 IVY STREET

TOTAL:

• SAN FRANCISCO, CA • 94102 • PHONE 415-255-2288 • FAX 415-255-1112 • WWW.SFAA.ORG

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9/18/13 2021 12:32 61 PM SF APARTMENT MAGAZINE | MARCH

Retain Your Gains… continued from page 34

investment real estate asset—not a per-

cashflow and appreciation by allowing

sonal residence—for another investment

the proceeds to be reinvested. In our

also have an additional 3.8% net investment

real estate asset. For more information

example, the investor’s total tax liability

tax—included as part of the Affordable

on 1031 Exchanges, download our free

would be $1,131,950. If the post-tax pro-

Care Act—added on top of the capital gains

guide, “Understanding 1031 Exchanges,”

ceeds of $2,118,050 were reinvested and

rate. This brings the total capital gains bill

by visiting www.re-transition.com/sfaa.

earning a 5% return, this would generate

in California to 37.1% or $816,200 on the

$105,903 in annual income. However, by

example above. This example is unique to

The Rules for 1031 Exchange

properties and taxpayers located in Califor-

A 1031 Exchange can be an excellent tool to

tor would have $3,250,000 to reinvest.

nia, which has the highest capital gains tax

defer capital gains, depreciation recapture,

At the same return of 5%, the exchange

rate in the country.

and net investment income taxes following

proceeds would generate annual cash

the sale of an asset, but it can also be a com-

flow of $162,500. The difference in cash

In addition to capital gains taxes, inves-

plicated transaction. While 1031 Exchanges

flow potential of over $56,500 represents

tors will also pay depreciation recapture.

are flexible in the number of strategies that

one of the primary benefits of 1031 Ex-

Investors take a depreciation deduction on

can be implemented, the rules put forward

changes—the ability to keep all your eq-

their annual taxes to offset rental income.

by the IRS are not flexible. Failure to adhere

uity working for you to generate income

The depreciation deduction not only de-

to IRS rules can result in either a failed

and appreciation.

creases the investor’s annual tax liability, it

Exchange, in which the entire tax liability is

also decreases the remaining tax basis for

due, or a Partial Exchange, in which a por-

If you are considering a 1031 Exchange and

the property. Once you sell the asset for

tion of the tax liability is due (generally the

would like to understand your tax liability,

a profit, you must pay back those deduc-

most expensive portion). Prior to the sale

contact Real Estate Transition Solutions to

tions. This is depreciation recapture. The

of investment property, investors consider-

schedule a complimentary consultation

rate of tax on depreciation recapture is

ing an exchange should become familiar

with one of our licensed 1031 Exchange Ad-

a flat rate of 25% at the federal level, can

with how 1031 Exchanges work, and with

visors. Our consultations can be done over

also include up to 13.3% state income

the following primary rules:

the phone, via web meeting, or in person at one of our offices. To schedule your free

tax, and can be subject to net investment income tax for an additional 3.8%. While capital gains tax is based on the taxable

• The exchange must be set up before a sale occurs

during the investor’s ownership. Based off

could be as high as $315,750.

re-transition.com, or visit www.re-transi-

• The exchange must be for like-kind property

*Potential cash flows/returns/appreciation are not guaranteed and could be lower

$750,000 of accumulated depreciation, the depreciation recapture tax in this scenario

consultation, call 415-691-6525, email info@ tion.com/sfaa.

gain, depreciation recapture is calculated based on the accumulated depreciation

performing a 1031 Exchange, the inves-

• The exchange property must be of

than anticipated.

equal or greater value This is for informational purposes only,

Deferring Capital Gains Tax With a 1031 Exchange Real estate investors have the opportu-

• The property owner must pay capital gains and/or depreciation recapture

ment advice, and should not be relied upon

tax on “boot”

as tax or legal advice. Please consult the appropriate professional regarding your

nity to defer, reduce, and even eliminate paying capital gains taxes by performing

does not constitute as individual invest-

• The taxpayer that sold and

individual circumstance. Because investor

a 1031 Exchange, also known as a “like-

acquired the exchange property

situations and objectives vary this informa-

kind” exchange. A 1031 Exchange, named

must be the same

tion is not intended to indicate suitability for any individual investor.

for Section 1031 of the U.S. Internal Revenue Code, is a transaction approved by

• The property owner has 45 days

the IRS, which allows real estate inves-

following the sale to identify

Austin Bowlin, CPA is a Partner at Real

tors to defer the tax liability on the sale of

replacement properties

Estate Transition Solutions and leads the firm's team of 1031 Exchange Advisors &

investment property. To defer the capital gains tax on the proceeds of investment

• The property owner has 180

Analysts. Austin advises on tax liability, de-

property, investors must reinvest their

days following the sale to complete

ferral strategies, legal entity structuring, co-

sales proceeds into like-kind investment

the exchange

ownership arrangements, 1031 Exchange

property of equal or greater value. “Like-

options and Delaware Statutory Trusts.

tate of the same nature or class, not of the

Improving Potential for Cash Flow with a 1031 Exchange*

Sources: www.irs.gov/taxtopics/tc409,

same quality or property type. Generally,

In addition to tax savings, a 1031 Ex-

and taxfoundation.org/state-individual-

this means that you can exchange any

change can improve the potential for

income-tax-rates-and-brackets-for-2020/

kind” is defined by the IRS as any real es-

MARCH 2021 | SF APARTMENT MAGAZINE

JOHN ANTONINI + DANIEL FOLEY MULTIFAMILY + MIXED-USE + ADD-VALUE

"In the business world, the rearview mirror is always clearer than the windshield" – Warren Buffett

"When is the best time to buy?" "How much is my property worth?“ “Is it worth remodeling vacant units?" “Is it the right time to sell?“ "How much are 1-bedroom rents?"

Do you have questions about vacancies, the rental market, or the value of your property? With over 15 years of experience advising SF Apartments owners, we are here to help. Contact us anytime to discuss your options.

John Antonini

Daniel Foley

415.794.9510

415.866.7997

john@antoninisf.com

daniel@danielfoley.com

DRE 01842830

DRE 01866714

SF APARTMENT MAGAZINE | MARCH 2021

Compass is a real estate broker licensed by the State of California and abides by Equal Housing Opportunity laws. License number 01527235. All material presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footage are approximate.

TO MOST PEOPLE, THIS VICTORIAN IS A SYMBOL OF THE GLORIOUS PAST

TO YOU, IT MEANS A MORE SECURE FINANCIAL FUTURE. We know the properties we manage mean more to owners like you than meets the eye. That’s why, for over 70 years and across three generations of our own family, we’ve taken the long view -- building great working relationships as we build value. Because when it comes to taking care of your investment, we definitely see eye-to-eye.

gaetanirealestate.com 415.668.1202