March 2022 SF Apartment Magazine

SF APARTMENT magazine

BRASS TAX GO BACK TO THE BASICS AND MINIMIZE LOSSES

San Francisco Apartment Association March 2022 / $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

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SF APA magazine

SF APARTMENT

contents

Features

20

Tax of All Trades

by JOAQUÍN TORRES

28

Real Deals

by TERRENCE JONES

34

ABCs of 721 Exchanges

by PETER K. FISHER

34 4

Photo courtesy of

MARCH 2022 | SF APARTMENT MAGAZINE

LU K E M U M M E R T O N U N S PL A S H

PARTM Columns

Membership

8

38

Flawed Façades

By the Unit

The News

14

Market View

Legal Q&A

by VARIOUS AUTHORS

44

Uncertain Terms

Debits & Credits

by JAY GREENBERG

Patch More, Pay Less

18

by ELIZABETH H. SHWIFF

50

Calendar

52

Professional Services Directory

56

Membership Application

Rent Board Redux Passthrough Pitfalls

by SAN FRANCISCO RENT BOARD

20

SF APARTMENT MAGAZINE | MARCH 2022

5

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6

MARCH 2022 | SF APARTMENT MAGAZINE

magazine

SF APARTMENT

San Francisco Apartment Association Office 265 Ivy Street San Francisco, CA 94102 Tel 415-255-2288 Fax 415-255-1112

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

SFAA Staff Executive Director Janan New

Deputy Director Vanessa Khaleel

Education Specialist Stephanie Alonzo

Government and Community Affairs Charley Goss

Marketing Lara Kisich

Member Services Manager Maria Shea Member Services Gershay Castaneda

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,

VOLUME XXXV, NUMBER 3 MARCH 2022 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 $84 per year by the San Francisco Apartment Association (SFAA), 265 Ivy Street, San Francisco, CA 94102. The SF Apartment Magazine is not responsible for the return or loss of submissions or artwork.

The magazine does not consider unsolicited articles. The opinions expressed in any signed article in the SF Apartment Magazine are those of the author and do not necessarily reflect the viewpoint of the SFAA or SF Apartment Magazine. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal service or other expert assistance is required, the services of a competent person should be sought.

Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by the SFAA, express or implied, of the advertiser or any goods or services offered. Published monthly, the SF Apartment Magazine is distributed to the entire membership of the SFAA. The contents of this magazine may not be reproduced without permission.

Publisher disclaims any liability for published articles. Printed by Jostens Printing Co. Copyright @2022 by SFAA.

Kent Mar, Neveo Mosser, J.J. Panzer, Bert Polacci, James Sangiacomo, Dave Wasserman

SF APARTMENT MAGAZINE | MARCH 2022

7

COLUMN

• Buildings built between 1910 and

THE NEWS

1925: December 31, 2023 • Buildings built between 1926 and 1970: December 31, 2025 • Buildings built after 1970: December 31, 2027 Reports may be submitted by email to dbi.facade@sfgov.org, or to DBI in person or by mail at 49 South Van Ness Avenue, Suite 500, San Francisco, CA 94103. DBI is to respond to the Reports within 60 days to confirm whether ad-

Flawed Façades

Deadlines are quickly approaching to identify and remedy unsafe conditions in building façades.

confirm dates for additional inspections and reports. Once a Report is approved, the owner/owner’s representative will be contacted to pick up the acceptance letter and pay the associated fees. Reports are not deemed complete until all associated fees have been paid.

Façades Safety Requirements

the schedule below, and then at least

In 2016, the San Francisco Building

every 10 years thereafter. Reports for

For more about this program, property

Code (“Code”) was amended to require

inspections and maintenance work

owners can visit the Department of

that the façades of certain buildings of

conducted within 10 years of the dead-

Building Inspection’s Façade inspec-

five or more stories be inspected peri-

line satisfy the reporting requirement.

tion and maintenance program page

odically by a licensed architect or engi-

Buildings constructed under a permit

(sf.gov/facade-inspection-and-mainte-

neer, and that a Façade Inspection and

submitted after January 1, 1998 are ex-

nance-program).

Maintenance Report (“Report”) be sub-

empt from having to conduct an initial

mitted to the owner and the Department

inspection, but are required to begin

New 10-Day Requirement

of Building Inspection (DBI). The Code

periodic inspections 30 years from

The San Francisco Board of Supervi-

requires the maintenance of façades in

the issuance of the Certificate of Final

sors voted unanimously in February

accordance with an Administrative Bul-

Completion for the building.

to require that rental property owners

letin based on a national standard. The

give residents a 10-day warning period

intent of the program is to identify cur-

Where a building experiences sig-

before serving eviction notices. After

rent unsafe conditions that could jeopar-

nificant damage due to earthquake,

receiving the notice, residents will have

dize public safety if façade elements fall

weather, or the passage of time, an

10 days to address the problematic issue

onto streets and sidewalks below. It is

inspection must be done within 60 days

to avoid eviction.

also intended to identify conditions that

of discovery of the damage, in addi-

could deteriorate into unsafe conditions

tion to immediate action to address the

The ordinance was written by Su-

before the next inspection.

damage. Significant damage includes

pervisor Dean Preston to help make

items that have fallen from a building or

pandemic-related eviction protections

The requirements apply to Type I,

items that have cracked or dislodged to

more long term. “It’s important that we

II, III, and IV buildings. Buildings of

become potential falling hazards.

take things that have worked in our

other construction types and fewer

8

ditional information is required and to

pandemic response and look at making

than five stories may voluntarily

It is important to note that buildings

comply. For inspection of buildings

built before 1910 were required to sub-

considered to be historic resources,

mit Reports by December 31, 2021. DBI

the qualified professional must have

has alerted the public that in order to

Annual Allowable Rent Increase 2.3%

expertise in structural inspection and

avoid penalties, property owners should

Effective March 1, 2022 through Febru-

maintenance of historic resources.

get started with Reports right away. The

ary 28, 2023, the allowable annual rent

Reports are to be submitted based on

next deadlines are as follows:

increase is 2.3 %. This amount is based

MARCH 2022 | SF APARTMENT MAGAZINE

some of them permanent,” he said.

ALLISON CHAPLEAU M U LT I - U N I T. M I X E D - U S E . C O M M E R C I A L .

LIST ED & SOLD 2021

3 Units in Ashbury Heights

4 Units in the Outer Sunset

3 Units in Cole Valley

4 Units in NOPA

3 Units in NOPA

$2,428,000

$1,800,000

$2,500,000

$1,219,000

$2,200,000

$2,025,000

December 2021

December 2021

December 2021

December 2021

November 2021

November 2021

6 Units in Haight-Ashbury

2 Units in Corona Heights

2 Units in the Sunset

16 Units in Eureka Valley

6 Units in Lower Haight

3 Units in Dolores Heights

$2,350,000

$1,928,000

$1,650,000

$5,850,000

$4,700,000

$2,200,000

November 2021

October 2021

October 2021

September 2021

September 2021

August 2021

10 Units in the Inner Richmond

2 Units in Mission Dolores

3 Units in the Lower Haight

2 Units in Eureka Valley

4 Units in Mission Dolores

6 Units in the Inner Richmond

$2,550,000

$1,530,000

$2,255,000

$3,080,000

$3,670,000

$1,850,000

June 2021

June 2021

June 2021

4 Units in Bernal Heights

July 2021

August 2021

July 2021

2 Units in Glen Park

2 Units in Lower Pac Heights

2 Units in Anza Vista

2 Units in Cole Valley

3 Units in Eureka Valley

6 Units in NOPA

$1,020,000

$1,559,501

$1,875,000

$2,500,000

$2,230,000

$2,009,250

June 2021

June 2021

April 2021

April 2021

April 2021

March 2021

6 Units in Cow Hollow

2 Units in Clarendon Heights

3 Units in the Castro

12 Units in the Tenderloin

3 Units in Eureka Valley

2 Units in the Upper Haight

$3,175,000

$1,645,000

$1,600,000

$1,650,000

$1,875,000

$1,905,000

March 2021

February 2021

February 2021

February 2021

January 2021

January 2021

Considering Selling a Multi-Unit Property?

Allison specializes in the sale of multi-unit, mixed-use and commercial properties in San Francisco. With over 20 years of experience in selling investment properties, she can help maximize the value of your property.

ALLISON CHAPLEAU Vanguard Commercial | Senior Vice President 415.516.0648 | allison@allisonchapleau.com | License: 01369080 SF APARTMENT ALLISONCHAPLEAU.COM

MAGAZINE | MARCH 2022

9

SFAA TRADE SHOW THURSDAY, MAY 12, 2022 Mark Thursday, May 12 on your calendar for the annual SFAA trade show.

The event will take place in-person at the Fort Mason Conference Building, from 2:00 pm to 5:30 pm.

Attendees will learn all about the latest trends, products, and services in the multifamily housing industry.

Consult with legal and management professionals, get to know service providers, improve your overall effectiveness with free educational classes, and meet peers in the San Francisco rental property market. The event is free!

Please note that the trade show will replace the May member meeting. For more information on the trade show or to become a sponsor, contact vanessa@sfaa.org. Turn to page 49 for more details.

SFAA is watching this legislation closely and will report updates as they become available.

Potential Sprinkler Legislation Supervisor Aaron Peskin has introduced legislation amending the existing fire code, which would require sprinkler systems in existing high-rise buildings. SFAA will keep members updated on this new potential ordinance as it progresses.

Property Tax Informal Review Deadline If you believe your property assessed value is higher than the market value, you may request an Informal Assessment Review before March 31, 2022. This only applies to single family dwellings, residential condominiums, townhouses, live-work lofts, and cooperative units.

Online submissions are preferable at sfassessor.org. You may also send your

on 60% of the increase in the Consumer

request to the following address: San

Price Index for all urban consumers in

Francisco Assessor-Recorder’s Office,

the Bay Area. To calculate the allowable

Attn: Informal Review, 1 Dr. Carlton B.

rent increase, multiply the tenant’s base

Goodlett Place, City Hall, Room 190, San

rent by .023.

Francisco, CA 94102. Fax: 415-544-7915 or email InformalReviewRP@sfgov.org.

Annual increases must be calculated only on the tenant’s base rent, which does not include capital improvement passthroughs or bond measure passthroughs. Rent

Keep a copy for your records.

SFAA Updates

RHINO

2022 SFAA Residential Tenancy

increases cannot be “rounded up” to the

Agreement: The SFAA 2022 lease is now

nearest dollar.

available in print and online. To access the lease, visit www.sfaa.org.

For more information, visit the San Francisco Rent Board website at sfrb.org or call

SFAA Office Reopening Status: While the

them at (415) 252-4600. For a history of all

SFAA office remains closed to the public,

allowable increases and their effective peri-

SFAA staff is working round-the-clock to

ods, turn to page 51.

keep the nonprofit running. Timely pay-

Potential Residential Vacancy Tax

ment of membership dues is necessary to help the association help you. Email

Supervisor Dean Preston is working on

MemberQuestions@sfaa.org to have your

legislation that would tax owners of va-

questions and concerns addressed.

cant units in San Francisco. According to a report put out by the City’s budget and

SFAA Classes: Classes are available

legislative analyst, the tax could impact

online. SFAA is happy to announce

owners of more than 40,000 vacant units.

that current CCRM students can continue

Many feel this number is largely inflated,

their education right from home. We

however; Executive Director of the Hous-

understand keeping up with education

ing Action Coalition Todd David says the

is crucial and want to assist our members

number of long-term vacant units in the

to stay up to date. See the calendar on

city is closer to 8,000.

page 50 for a full list of classes.

10

MARCH 2022 | SF APARTMENT MAGAZINE

(833) 711-3400 info@lllegalassistance.com www.lllegalassistance.com

Adam Filly Exceeding Expectations New Listing

Apartments | Mixed-Use | Commercial

New Listing

5 Piedmont Street | 4 Units $1,700,000 | Ashbury Heights

Available

New Price

565 Ellis Street | 17 Units $3,400,000 | Civic Center

789 6th Avenue | 13 Units $4,500,000 | Inner Richmond

Pending Sale

60-62 Sycamore Street | 8 Units $3,995,000 | Mission

Pending Sale

3650-3664 Sacramento Street | 7 Units $9,850,000 | Presidio Heights

1692 Haight Street | 9 Units $4,950,000 | Haight Ashbury

Now more than ever you need an expert on your side. If you are considering buying or selling an investment property, then call Adam to discuss your goals.

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 2022

11

12

MARCH 2022 | SF APARTMENT MAGAZINE

DAN McGUE

S A N F R A N C I S C O ’ S L E A D I N G A PA R T M E N T B R O K E R OVER $2.8 BILLION IN TOTAL SALES!

E X C E P T I O N A L M U LT I - FA M I LY & C O M M E R C I A L T R O P H Y I N V E ST M E N T P R O P E RT Y F O R SAL E !

2222 - 2254 POLK STREET

Dan McGue

Senior Commercial Broker Associate

Lic# 00656579 415.310.5787 | dan@danmcgue.com | www.danmcgue.com © 2019 Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All Rights Reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates fully supports the principles of the APARTMENT MAGAZINE | MARCH Equal Opportunity Act. Each Office is Independently Owned and Operated. Coldwell Banker Commercial and the Coldwell Banker Commercial Logo are SF registered service marks owned by Coldwell Banker Real 2022 Estate LLC, dba Coldwell Banker Commercial Affiliates. Each sales representative and broker is responsible for complying with any consumer disclosure laws or regulations.

13

COLUMN

MARKET VIEW

Uncertain Terms w r i t t e n b y JAY GR E E N B E RG

How population decline, remote work, and rising interest rates may impact the local rental housing market going forward.

B

average price per unit was $441,000, which is a decrease of 8.75% in a yearover-year comparison.

Dollar volume in the 5-9-unit sector had been very strong, increasing every year with the exceptions of 2008 (during the financial meltdown) and 2020. We’ve since had a nice rebound. Dollar volume

elow are stats for year-end

5-9 Units

was $298 million in 2017, $317 million

2021 compared with previ-

The average price per square foot has

in 2018, and $349 million in 2019, before

ous years and time periods.

bounced around since 2017 without any

dropping significantly to $236 million

2021 ended on a high note

big peaks or valleys. The cost per square

in 2020 (a 32% decrease in a year-over-

as apartment sales activity kicked into

foot was $535 in 2017, $561 in 2018, and

year comparison). In 2021, we’ve picked

high gear. Sales of buildings with five or

$554 for both 2019 and 2020. In 2021,

up some of the slack, finishing the year

more units rebounded after the plunge

we ended the year with an average price

with $358 million in closed transactions,

that followed the initial pandemic shut-

per square foot of $525, which is a 5.5%

which is a new record high and a 51%

down in 2020. Meanwhile, value indica-

decrease in a year-over-year comparison.

increase in a year-over-year comparison.

rents were rebounding in most neigh-

Gross rent multipliers (GRMs) have been

Transaction levels had been very steady

borhoods throughout San Francisco.

on the decline since 2016 (following our

over the past few years but, as you can

San Francisco population numbers have

peak rental market), with the exception

probably guess, they fell back in 2020.

declined approximately 2% since 2019,

of 2018, which was a record-breaking

We recorded 105 transactions in 2017,

yet employment numbers continued to

year for sales and value indicators. The

104 transactions in 2018, and 107 trans-

recover throughout 2021. Office atten-

average GRM was 17.79 times gross in

actions in 2019. In 2020, the number of

dance rates are still far below pre-pan-

2017, 18.32 times gross in 2018, and 16.97

transactions dropped to 78, the lowest

demic levels and uncertainty remains

in 2019. In 2020, the GRM dropped to

the City had seen in a decade. However,

for workers returning to the office. Inter-

15.71, the lowest we had seen since 2012.

in 2021, there was a nice rebound to 108

est rates remain in the 3% to 3.5% range

In 2021, however, the GRM retreated

closed transactions, which is a 38.5% in-

as of this writing in February, and we are

yet again to 14.93 times gross, setting

crease in a year-over-year comparison.

entering into a rising interest rate period

another new low since 2012 and a 5%

that will factor into future pricing. Fun-

decrease in a year-over-year comparison.

tors ticked down across the board while

damentals in the market have stabilized,

10-Plus Units While reading the below data, keep in

and I expect this to continue throughout

In a trend similar to the average cost

mind that 2018 was an amazing record-

2022, subject to the extent of govern-

per square foot, the average price per

breaking year for value indicators and

ment interference.

unit has bounced up and down since

transactions levels.

2017 without any big peaks or valleys.

14

The following are 2021 year-end sta-

The approximate average price per unit

In the 10-plus-unit sector, the average

tistics for the 5-9-unit sector and the

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

price per square foot was $555 in 2017,

10-plus-unit sector versus the same time

$489,000 in 2019, and $484,000 in 2020.

$621 in 2018, $598 in 2019, and $544

period for 2017, 2018, 2019, and 2020.

As we closed out 2021, the approximate

in 2020. This number dropped again

MARCH 2022 | SF APARTMENT MAGAZINE

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Contact me for a complimentary valuation on your building — whether buying, selling, or executing a 1031 Exchange, I can advise you on strategy.

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Senior Broker Associate Lic. #01343939 | Terrence@TerrenceJonesSF.com TerrenceJonesSF.com | 415.786.2216

15

©2022 Corcoran Global Living. All rights reserved. Each franchise is independently owned and operated. Corcoran Global Living fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. SF APARTMENT MAGAZINE | MARCH 2022 This is not intended as a solicitation if you’re working with another broker. Information is deemed reliable, but is not guaranteed.

20 18 16 14 12 10 8 6 4 2 0

in 2021 to $520 per square foot, which

GRMs

is a 4.5% decrease in a year-over-year comparison.

The average GRM was 16.85 times gross in 2017, and again, there was a significant

5-9 Units

jump in 2018 to 18.33 times gross. In 2019,

10+ Units

this number dropped to 16.56, a four-year low, before dropping again in 2020 to 15.54. In 2021, we saw another drop in mul2017

2018

2019

2020

2021

Source: CoStar Comps

Q4

tipliers with the average GRM coming in at 14.15, which is a 9% decrease in a yearover-year comparison.

Following a similar trend, the approximate

Price Per Sq. Ft.

average price per unit was $404,000 in 2017,

$700

$471,000 in 2018, and $466,000 in 2019. In

$600

2020, there was a dip to $425,000 per unit,

$500

which was a 9% decrease in a year-over-

$400

year comparison, and in 2021, the cost per unit dropped another 9% to $385,000.

$300

5-9 Units

$200

10+ Units

$100 $0

Dollar volume in the 10-plus-unit sector was all over the charts, particularly

2017

2018

2019

2020

2021

Source: CoStar Comps

in 2018, which saw a record-shattering Q4

$1,153,000,000 (yes, that is “billions”) in sales volume. Before 2018, the previous record was set in 2013 when sales volume reached $703 million. The city’s end-of-

Price Per Unit

year sales volume was $624 million in

$600,000

2017, and, as noted, $1.1 billion in 2018, before dipping back again to $572 million

$500,000

in 2019. Sales volume hit a ten-year-low at $377 million in 2020 before rebound-

$400,000

ing (after a sluggish start) in 2021 to $554

$300,000

million, which is a 47% increase in a year5-9 Units

$200,000

over-year comparison.

10+ Units

$100,000

2017

2018

2019

2020

After very low transaction levels in 2015

2021 Q4

Source: CoStar Comps

and 2016, sales started to pick up again in 2017, when the city saw 88 closed transactions. There were 103 closed transactions in 2018, and then sales slowed down again in

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

Transactions

2019, with 65 closings. In 2020, there was a but we rebounded in 2021 with 83 closings,

YTD 10+ Units

which is an 80% increase in a year-overyear comparison.

The source of the numbers reported come from Jay Greenberg & Vitaly Rutus, San Francisco Multiple Listing Service, and Costar Comps.

2017

2018

Source: CoStar Comps

16

significant drop to 46 closings by year-end,

YTD 5-9 Units

MARCH 2022 | SF APARTMENT MAGAZINE

2019

2020

2021 Q4

Market View… continued on page 64

LISTED & SOLD

PRICE REDUCED

THE BONN/WEBB TEAM IS GRATEFUL TO OUR CLIENTS FOR A SUCCESSFUL 2021, WISHING YOU THE BEST IN THE NEW YEAR

511 Waller Street | 6 Units Sold $150,000 Over Asking

208-210 Fair Oaks Street | 4 Units Call Angelo Baglieri at 415-424-8201

RECENTLY SOLD BY THE BONN/WEBB TEAM

1756 Broadway 7 Units | 5,822 SF

475 Chestnut Street 7 Units | 6,613 SF

1040 Ashbury Street 9 Units | 9,438 SF

1110 Jackson Street 9 Units | 6,640 SF

1077 Ashbury Street 11 Units | 8,657 SF

1885 Filbert Street 8 Units | 4,790 SF

1900 Page Street 9 Units | 9,827 SF

Mark Bonn

Mirella Webb

Managing Director

Senior Investment Advisor

415.225.8658 mark.bonn@compass.com lic.: 01008844

415.640.4133 mirella.webb@compass.com lic.: 01409540 www.bonnwebbteam.com

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.

SF APARTMENT MAGAZINE | MARCH 2022

COMMERCIAL

Call us for a FREE and confidential valuation of your property or to consult about your real estate needs.

17

COLUMN

RENT BOARD REDUX

Passthrough Pitfalls w r i t t e n b y T H E S A N F R A NC I S C O R E N T B OA R D

When filing a passthrough petition, keep clear records and go through each step of the process carefully.

asked the Board to acknowledge the lease terms that are “clearly” stated in the lease, and that such terms should dictate the relationship between the landlord and the tenants.

The tenants’ petition alleging a de-

Editor’s Note: The following San Fran-

the tenants’ complaints and to ac-

crease in housing services was granted.

cisco Rent Board cases are real, though

commodate the tenants; and had she

The ALJ determined that payment of

they have been edited for space and

known about the six-month rule, she

certain utility costs were housing ser-

clarity. They have been selected to high-

would have waited an additional four

vices provided by the landlord at the

light some of the more interesting cases

days to install the new HVAC system,

inception of the tenancy, and that the

that the Board reviewed at its recent

and that the full cost of the work

landlords were liable for rent reduc-

commission meetings. For full Rent

should be certified.

tions in the amount of $1,990.31 to offset utility costs paid by the tenants.

Board agendas and minutes, please visit sfrb.org.

The tenants also appealed, arguing that partial cost of the work should not

On appeal, the landlords assert that the

2000 Block of Fillmore Street

have been certified because if a code

ALJ was biased toward the tenants and

The property owner told the Board

inspector had come to the property, the

that the “unambiguous” language of the

that she rushed to install a new heat

landlord would have been cited for a

written lease requires the tenants to pay

system and added air conditioning to

code violation, which was evidenced by

for their own utility usage.

the unit under review, solely to accom-

the fact that the landlord installed a third

modate the new tenants, and it now

HVAC unit; and that if all three HVAC

saves them hundreds of dollars a month.

units had been properly installed at the

She said that had she delayed the HVAC

same time, the six-month rule would

1400 Block of Clement Street

installation by four days, 100% of the

have applied to all three units and no

The tenant told the Board that the land-

passthrough would have been automati-

part of the passthrough amount would

lord’s appeal is based on opinion, not

cally certified. She said she did the right

have been certified.

facts, and that he already explained why

thing, and requests that her appeal be

Decision: To deny both appeals (5-0).

he claimed a homestead exemption on

granted and that it is only fair that the

(For more information on how to cor-

a different property in great detail at the

full amount be certified.

rectly file a passthrough petition, check

hearing. Regarding his parking space,

out Passthrough the Buck in the Febru-

he stated that the landlord did not prove

ary edition of this magazine.)

that the tenant’s car will not fit in his des-

The property owner’s petition for a capital improvement passthrough to one of five units was granted. The ALJ only

ignated parking space, but the evidence Decision: To deny both appeals (5-0).

partially certified the full cost of two

18

to pay the utilities several years ago. He

did prove that the landlord provided his parking space to a different tenant, thus

new electric heater/air conditioner units

3000 Block of Irving Street

because the landlord rented the unit to

The property owner told the Board that

that the landlord made many false state-

the tenants on August 19, 2019, which

the written terms in the tenants’ lease

ments at the hearing and in the appeal.

was within six months of the installation

were not acknowledged in the ALJ deci-

of the electric wall heaters/air condition-

sion. He stated that the owners are a

A consolidated decision issued on the

ers in the bedroom and living room on

small, family-owned business that was

property owner’s petition requesting

February 6-7, 2020.

devastated by the pandemic, and that he

a determination pursuant to Rules and

has only asked for the tenants to pay for

Regulations Section 1.21 and the ten-

The landlord appealed, contending

the utilities they consume. He stated that

ants’ petition alleging a decrease in

that she would not have installed a

the owners were surprised by the ten-

new HVAC system in the unit but for

ants’ petition, as the tenants had agreed

MARCH 2022 | SF APARTMENT MAGAZINE

preventing him from using it. He stated

Rent Board Redux… continued on page 58

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19

Tax of all Trades Wr i t t e n b y

JOAQU Í N T OR R E S

Proposition 19 has changed the way property values may be transferred and preserved. Read on for the details.

Hello, my name is Joaquín Torres and I’m honored to serve as your Assessor-Recorder in the City and County of San Francisco. Since being appointed by Mayor Breed in February 2021, I’ve focused on bringing the work of my office into our communities and neighborhoods, modernizing our systems to streamline and increase access to services to better meet your needs, and advancing a racial equity program that ensures underserved communities have equitable access to our resources.

In my previous role as Director of the Office of Economic and Workforce Development, I delivered recovery and relief programs to those most affected by COVID-19. From relief for small businesses and workers, to COVID safety guidance for businesses, to securing funding for food for families, to ensuring community access to COVID testing and vaccines, I’m proud to be a part of a city team that worked diligently to support our City through a time of health and economic crises.

Proposition 19 One of the most frequent things I’m asked about is Proposition 19. This statewide 2020 ballot measure was narrowly approved by California voters and changes the way property values may be transferred and preserved. The new law has two parts. The first, known as the Family Transfer provision, went into effect on February 16, 2021. It affects the ways families think about inheritance and the financial impacts of transferring property. The second, known as the Base Year Value Transfers, is for homeowners 55 and older, persons who are severely disabled, and victims of natural disasters, and became operative on April 1, 2021. It allows for people 55 and older, persons who are severely disabled, and victims of natural disaster to more flexibly change their principal residence and preserve their factored base year value for their replacement home.

20

MARCH 2022 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2022

21

Family Transfer Provisions

a replacement primary residence of any

example, a homeowner sells their primary

Proposition 19 requires that property

value in California. Previously, the replace-

residence in San Francisco in Novem-

transferred between parents and chil-

ment residence was required to be equal

ber 2021 for $1,800,000 with a base year

dren, and between grandparents and

or lesser in value. Now, the new home can

value of $450,000. In December 2021, a

their grandchildren, must be reassessed

be of greater value. However, if the value of

replacement home is purchased in an

to market value. However, an exemption

the new home is greater than the original,

all-cash offer of $2,000,000. My office

remains for family homes that are owner-

the difference in market value is added to

would calculate the new base year value

occupied by the parent and become the

the transferred base year value.

as follows: $2,000,000 (full cash value of the replacement home) minus $1,800,000

primary home of the child or grandchild.

To qualify for the exemption, family

Homeowners can transfer their base year

(full cash value of the original home)

members must make the family home

values up to three times under the new law

equals $200,000. $200,000 (the difference

their primary residence within one year

or once per natural disaster. If a house is

in value between the two homes) is added

of the transfer to preserve the property’s

sold, the replacement home must be newly

to the $450,000 base year value of the primary home, totaling

existing assessed value.

Please note that you will lose your chance to maintain your factored base year value if you do not make the inherited home your primary home and file a home exemption with my office. If this is not done within one year, Proposition 19 mandates that the property’s assessed value will be reassessed to market rate value without further opportunities to appeal. Also, the new homeowner must continually live

Proposition 19 requires that property transferred between parents and children, and between grandparents and their grandchildren, must be reassessed to market value.

However, an exemption remains for family homes that are owner-occupied by the parent and become the primary home of the child or grandchild.

in this home as their

a new base year value of $650,000. The protected base year value of Proposition 19 would be less than the fair market value of purchasing a new home.

Current Status of the New Law After Proposition 19 passed, assessors were required to administer the new law and did not have discretion to set aside areas for which we disagreed. On September 30, 2021, the Governor signed into

primary residence to maintain the trans-

constructed or newly purchased within

law Senate Bill 539, which made clarify-

ferred factored base year value.

three years of the sale of the original home.

ing changes to Proposition 19. SB 539 is an

For a claim on a wildfire or natural disas-

implementing statute that provided guid-

Proposition 19 further eliminated the base

ter, three years are given following the

ance to all 58 California County Assessors

year value transfer for secondary proper-

purchase date or the completed construc-

to uniformly administer Proposition 19.

ties, such as small rental properties. Small

tion date of the replacement of the primary

rental properties, second homes, and com-

home. If you file after the three-year period,

SB 539 confirmed the definitions and ad-

mercial properties when transferred may

relief cannot be awarded, and the home

ministrative processes. For example, for the

now be subject to assessment to market

will be valued at market rate.

family transfers provisions, SB 539 defined

value as of the date of transfer from the owner to their eligible beneficiary.

Family Home/Principal Place of Residence

Two Common Scenarios

and Family Farm; and provided qualifica-

Scenario 1: If the market value of the new

tions and filing requirements, so my office

replacement home is less than or equal to

can properly administer the new law. For

Base year transfers are the more commonly

the market value of the original home, then

Base Year Value provisions, the legislation

known feature of Proposition 19. Base year

the taxable value may be transferred to

answered many of your frequently asked

value means tax value plus annual inflation-

the new home with no adjustment to your

questions, including those included below.

ary adjustments used to calculate property

property taxes.

Base Year Value Transfers

tax. The measure permits homeowners

What’s Next?

over 55 years of age, homeowners who are

Scenario 2: If your new home is more

severely disabled, or those whose homes

than the market value of the original

lot initiative to restore the former family

were destroyed by wildfire or natural di-

home, then the excess difference will be

transfer provisions to the State Consti-

saster to transfer their base year value to

added to the taxable base year value. For

tution. Before Prop 19 passed, families

22

MARCH 2022 | SF APARTMENT MAGAZINE

You may have heard there is a new bal-

SF APARTMENT MAGAZINE | MARCH 2022

23

could transfer and exempt from reassess-

• $2,600,000 (market value) -$1,554,000

ment up to $1 million in base year value

(excluded value limit) = $1,046,000

of “other property.” The new initiative

A. These time limits are dealing with two different issues. The replacement residence must be purchased or newly constructed

• The New Base Year Value: $1,046,000

within two years (before or after) the sale

year value of other property, such as

+ $554,000 (previous base year value)

of the original residence. The Proposition

second homes and commercial property.

= $1,600,000

19 application must be filed within three

proposes to exempt $2.4 million in base

A family home of any value is excluded from reassessment and does not count toward the $2.4 million limit.

The initiative does not change Proposition 19’s base year value transfer for persons 55 or older, disabled persons, or wildfire victims. You can still transfer the

Q. My father owns an apartment

complex and lives in one of the units. He wants to transfer the complex to me, his son. Does the entire complex qualify as his family home?

A. No. Only the unit occupied as the

years of the date the replacement residence is purchased or newly constructed to receive full benefits. If the application is filed after three years, only prospective relief will be granted.

Q.

How does the Assessor determine market value?

base year value of your primary home to

family home qualifies for the exclusion.

a replacement home of any value, any-

The rest of the property would be reas-

where in the state. This is an effort by the

A. The Assessor must assess property at

sessed to 100% of fair market value. This

the fair market value. Typically, the sales

Howard Jarvis Taxpayers Association. As

process would not create multiple tax

and purchase prices are accepted, but

we learn more on the status of these and

bills. The amounts would be added to-

they must reflect the current fair market

other measures, we’ll be sure to share that

gether to create one tax bill with the

value. If for some reason the prices do not

information with you.

new amount.

reflect the fair market value, and the ap-

Family Transfer FAQs

Q. What are the requirements

praiser determines a different value, our

Q.

Can you show us how to calculate the property taxes when my family home is transferred to my family?

to apply for a Family Transfer exclusion?

A. In addition to filing for the home-

office will use the fair market value that the appraiser determined.

Additional Resources To learn more about Proposition 19,

owners’ or disabled veterans’ exemption

please visit my website (sfassessor.org/

within one year of the transfer, Proposi-

Prop19#description). We’ve included a fre-

tion 19 requires the child to file a claim for

quently asked questions (FAQs) section to

the parent to child transfer exclusion if

the change in ownership exclusion within

help familiarize you with the rules.

the value of your home is greater than

three years of the transfer.

$1,000,000. Proposition 19 states that the

Q. I never applied for a Home-

A. You have asked if you would lose new base year value will not change if the old base year value plus $1,000,000 is less than the fair market value of the family home. If the market value is equal or less than the value limit you will receive full relief. If the market value exceeds this limit, then partial relief is available.

owner’s Exemption, but I had lived in my house for many years before I sold it. Can I still qualify?

A. Yes. As long as the homeowner can

You can stay updated on any future changes through my newsletter, social media, and website. Remember, utilizing Proposition 19 must be done in a timely fashion, so please familiarize yourself with the rules and details to avoid any negative consequences.

prove that the sold property was owned and occupied as the principal place of

For homeowners who may have recently

For example, here is the calculation for

residence, they can meet the residency

submitted a Proposition 19 claim to our

the new base year value for a home with

requirement. Proof of residency may in-

office, please reach out to discuss any

$554,000 in base year value and the fair

clude vehicle registration, bank accounts,

concerns you may have. While Proposi-

market value of $2,600,000 at the time

or income tax records. Utility bills do

tion 19 is a new law that has presented

of transfer:

not qualify because they might be sent

administrative challenges for offices

to a renter.

throughout the state, we are working to

Excluded value limit amount is the previous

process your claims and answer your

base year value plus $1 million:

Base Year Value Transfer FAQs

questions as quickly as possible. Please

$554,000 + $1,000,000=$1,554,000

Q. I’m confused about the time

don’t hesitate to call us at (415) 554-5596

The difference between the market value and the excluded value limit is added to the previous base year value for the New Base Year Value, providing a partial relief:

24

MARCH 2022 | SF APARTMENT MAGAZINE

limits. One place says there is a two-year limit, and another place says there is a three-year limit.

Which is it?

or to email Assessor@sfgov.org.

We look forward to serving you.

Joaquín Torres is the Assessor-Recorder for the City of San Francisco.

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27

Real Deals

Wr i t t e n b y T E R R E NC E JO N E S

Read on for tax strategies to take advantage of in 2022

28

MARCH 2022 | SF APARTMENT MAGAZINE

SF APARTMENT MAGAZINE | MARCH 2022

29

Author’s Note: I am a licensed Real Estate

investment in the United States that beats

The third magical part of the triple tax

Broker in California. That license does

the 1031 exchange for real estate.

advantages is depreciation. Depreciation is a fictional concept. If you remove the land

not make me a tax or tax law expert. The opinions expressed below are based on 20

The 1031 exchange is the first of the

value of a property you purchase, then you

years of working and investing in com-

triple tax advantages of real estate. The

are left with the value of the structure on

mercial real estate. If you are considering

1031 exchange law is truly extraordinary.

the land. That structure is subject to wear

doing anything that impacts your taxable

The alternative is to sell your property,

and tear over its life. Depreciation com-

income, make sure you consult a licensed

pay tax on the gain, and reinvest the net

mences as soon as the property is placed in

legal or tax specialist to advise you on the

free cash into another investment. If you

service or available to use as a rental.

appropriate strategies and their implica-

do this, you will only have approximately 60% of the money you made from the

By convention, most U.S. residential rental

sale of your property. Every investor’s tax

property is depreciated at a rate of 3.636%

Tax Strategies When Selling

situation is different, but in general, sell-

each year for 27.5 years. Only the value of

One of the main reasons I left the finan-

ers can expect to pay 40% of their profit

buildings can be depreciated; you cannot

cial technology start-up world 20 years

in a combination of Federal capital gains

depreciate land. Unfortunately, deprecia-

ago was to take advantage of the triple tax

tax, state capital gains tax, and deprecia-

tion can only be altered by buying more

advantages found in real estate investing.

tion recapture.

property, so it is not as much of a strategy

tions for you.

In this article, I’ll discuss

where you can actively ma-

some of the tax advan-

nipulate your tax implica-

tages and how you might use them for 2022 to save on your own taxes. Some strategies relate to taxes on sales, and others relate to taxes on the continued ownership of your property.

Before we start with specific

One of the main reasons I left the financial technology start-up world 20 years ago was to take advantage of the triple tax advantages found in real estate investing.

tions, like the 1031 or the debt service of your property. If you buy more in 2022 with or without a 1031 exchange, you can gain more depreciation going forward.

A uniquely San Francisco tax strategy has to do with sales prices and costs related to

strategies, think for a mo-

the sale of property. The city

ment about the fickle nature of the tax advantages we enjoy as owners.

Imagine you made a $1,000,000 gain in the

of San Francisco passed a very high trans-

In 2022, the Biden administration had set

sale of your property. If you complete a

fer tax increase on the sale of properties

its sights on redefining one of the best tax

1031 exchange, all that money can go back

that are $10 million and above. This tax is

advantages we have in the United States:

into a new purchase. If you do not, you

so substantial a jump over the tax imposed

the 1031 exchange. The initial drafts of

are left with approximately $600,000 after

on properties that sell for under $10 mil-

the new tax law intended to limit the

taxes and depreciation recapture. If you

lion that buyers, sellers, and brokers who

amount of equity that could be exchanged

buy real estate with this, you have 40% less

are selling buildings that are close to $10

to $500,000. This would have been sig-

buying power.

million will often transfer fees and sale expenses outside of escrow to stay under

nificant for the industry, because many long-term owners who do 1031 exchanges

The second part of the triple tax advan-

this threshold, which can save thousands

would exceed this figure by a significant

tage in the United States is leverage—aka

of dollars for the seller. This is a risky strat-

amount. Fortunately, the politics to revise

debt—aka a loan. The loans taken out

egy; if you pursue this, it is essential that

the law bore out, and so there will be no

against an investment property allow an

you discuss the risks and rewards in detail

change to the law for 2022.

owner to expense the interest portion

with your CPA and tax attorney to best

of the monthly mortgage payment. This

understand it.

The biggest tax avoidance strategy you

expense deduction can be used to offset

can do if you intend to sell in 2022 is to

income, and shelter or reduce your tax-

Tax Strategies When Holding

use the 1031 exchange. If done right,

able income. In many instances, owners

A tax strategy owners can use next year for

investors can defer all tax on gains from

will take cash out of a property they have

properties they do not intend to sell has to

a sale of real property until they are no

owned for many years through a refi-

do with how work done on the property is

longer alive. This can be done as many

nance to create cash they can use to make

described. The strategy for classifying work

times as an investor wants with sales and

further real estate investments. Owners

done at your property as a “repair” versus a

subsequent purchases. Outside of an Indi-

can choose to put new debt on a property

“capital improvement” can have a signifi-

vidual Retirement Account or a 401K plan,

and impact their taxes for the period of

cant impact on when you take the deduc-

there is no other legitimate tax deferral

the debt.

tion on the expense.

30

MARCH 2022 | SF APARTMENT MAGAZINE

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In theory, the concept is simple. If you fix

An example, cited by the IRS, illustrates the

an electrical problem in a common area of

difficulty in determining how to classify

your rental building, it’s a repair (and 100%

some expenses: “You repair a small section

expensable in that year). In contrast, the

of the roof of a rental property. You deduct

brand-new roof you installed on your build-

the cost of the repair as a rental expense.

ing at a cost of $20,000 is a capital improve-

However, if you remove the old roof and

ment and must be depreciated.

replace it with a new one, the expense is an improvement because it restores the

The obvious advantage of classifying an

property. You must depreciate the cost of

expense as a repair is that 100% of its cost

the new roof.”

Passthroughs

PAY! Take advantage of the Rent Board rules that benefit you.

We prepare petitions for

goes to reduce your taxable income in

• Soft Story/Voluntary Seismic

that calendar year. In the case of the roof,

But how much of a roof must be repaired

it would benefit the owner to expense the

before it becomes a replacement (i.e., an im-

• General Capital Improvements • Operating and Maintenance

entire $20,000 as a repair than to depreci-

provement)? And if another roof is put on

and also

ate it over 15 years. If you’re in the 30% tax

top of the existing roof, isn’t that a repair,

bracket, this $20,000 sheltering of income

because it extends the life of the roof and

translates to a tax savings of $5,994 in that

does not involve removal of the old one?

year. But with roofs and other depreciated business assets, there’s the 15-year depre-

Questions like these—the “gray areas”—

ciation bonus: you can depreciate half the

come up all the time, and demonstrate that

cost of the new roof the first year and the

sometimes making a determination is a

balance over the following 15 years.

matter of an owner’s interpretation.

Whether to classify work on a property as

When In Doubt, Consult a Tax Expert

a repair or an improvement is not always

The more aggressive your approach to

clear-cut.

taxation issues in the gray areas, the more red flags IRS auditors will see, and the more

The IRS website (www.irs.gov) provides

likely you are to be audited, with possible

some basic, but confusing, guidelines on

reclassification of expenses, back taxes,

the issue of repair versus improvement:

and penalties. If you do take a more aggressive approach and are audited, be prepared

• “If you improve depreciable prop-

to defend your position with documenta-

erty, you must treat the improvement

tion and support from IRS codes or regula-

as separate depreciable property.

tions, memos, or tax court decisions. If you

Improvement means an addition to or

have any doubts about where to place an

partial replacement of property that is

expense, especially a large one, seek the

a betterment to the property, restores

opinion of a Certified Public Accountant or

the property, or adapts it to a new or

tax attorney.

different use.

• “You generally deduct the cost of repairing business property in the same way as any other business expense.

However, if the cost is for a betterment to the property, to restore it, or to adapt it to a new or different use, you must treat it as an improvement, and depreciate it.

• “Although the high cost of the work performed may also be considered in determining whether an expenditure is capital in nature, cost alone is not the key factor.”

Terrence Jones is Senior Broker Associate with Corcoran GL Commercial can be contacted at (415) 786-2216 or terrence@ terrencejonesSF.com.

Mike Stack

Real Estate Advisor

Call or email me today for a free & private analysis of your property’s value.

415.580.9095

mikestack@vanguardsf.com MikeStackSF.com

D R E# 0193228 0

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MARCH 2022 | SF APARTMENT MAGAZINE

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33

ABCs of 721 Exchanges written by PE T E R K . F I S H E R

Everything you need to know about the 721 Exchange (UPREIT) for diversification of highly appreciated assets.

Opportunities exist in the marketplace for investors to diversify their real estate holdings while deferring capital gains of highly appreciated and long-held assets. Real estate property owners may find utilizing a combination of Section 1031 Exchange and Section 721 Exchange, also referred to as a “Two-Step UPREIT Transaction,” to be a beneficial tax mitigation process. Knowing that each investor’s specific situation is different, we recommend that the investor seek the advice of tax and legal professionals to understand risks and how this can apply to their unique situation. ​ Rather than a 1031 like-kind exchange, a 721 Transaction allows an investor to contribute property directly to a Real Estate Investment Trust (REIT) operating partnership (the entity through which the REIT acquires and owns its real estate) in exchange for Operating Partnership Units (OP Units). A 721 Transaction may be helpful for property owners with significant gains where a sale would incur a tax liability or those looking for estate planning tools to pass wealth on to heirs in a tax-efficient manner. The most recent year brought concerns around the future of Section 1031, and the 721 Transaction may be an option to diversify away from these uncertainties.

What is the 721 Transaction or UPREIT? Section 721 of the Internal Revenue Code permits owners of real estate properties to contribute their assets, on a tax-deferred basis, to a partnership in exchange for interest or operating units in the partnership. REITs often hold their real estate portfolio through an operating partnership known as an Umbrella Partnership Real Estate Investment Trust, or UPREIT. The UPREIT structure allows real estate holders to exchange their property for OP Units of the operating partnership by contributing that property through a 721 Transaction. The OP Units have a similar structure to the shares of the REIT and, after a predetermined time, can generally be converted to actual shares of the REIT for additional liquidity. This conversion from OP Units to shares would trigger a tax liability.

Many real estate investors use the 721 Transaction to complement or as an alternative to Section 1031 Exchange. Real estate owners looking to invest in a more extensive portfolio with diversification, professional management,

34

MARCH 2022 | SF APARTMENT MAGAZINE

Photo by Luke Mummert on Unsplash

SF APARTMENT MAGAZINE | MARCH 2022

35

economies of scale, increased liquidity,

holding a Series 66 do not fall under this

REITs tend to own many assets diversi-

and added estate planning benefits may

definition. If you are unsure if you are an

fied through different markets. The 721

find the REIT an attractive tool. The 721

accredited investor and/or an accredited

Transaction into a REIT can give the abil-

transaction can provide many benefits

entity, please verify with your CPA and

ity to diversify an individual’s portfolio,

while deferring potential tax liability on

attorney.)

which may reduce concentration risk. A REIT can provide similar benefits of real

their original property.

The REIT can then acquire the DST asset

A Common 721 Transaction Challenge

estate ownership such as appreciation, tax

through the UPREIT transaction. The oper-

shelter through depreciation, and income.

ating partnership of the REIT is receiving

(Note: Diversification does not guarantee a

To execute a 721 transaction, investment

all the DST interests from the beneficial

profit or protect against a loss in a declining

property is contributed to the operating

owners in exchange for OP Units. By

market. It is a method used to help manage

partnership of a REIT. Depending on the

exchanging into a DST, an individual can

investment risk.)

type of property the individual is contrib-

access typical institutional assets attractive

uting, it may be challenging to find a REIT

to a REIT.

willing to execute the UPREIT transaction.

Income Investors typically will receive income

One may find it difficult to UPREIT a small

​Sometimes, these sponsors will create cus-

generated by the DST before a DST 721

apartment building, condo, or single-family

tom programs, where other registered enti-

Transaction and from OP Units of the REIT

home, as an example.

ties they manage invest in the DST with a

through distributions. Income generated by

future option to purchase the investor own-

721 Two-Step UPREIT Transaction or DST 721

the DST or OP Units may have tax advan-

ership position. For example, imagine that

tages due to depreciation and other strate-

an investment program sponsor creates

gies. (Note: Potential cash flows, returns,

Many full-service real estate advisory

both a publicly registered non-traded REIT

and appreciation are not guaranteed and

firms, or sponsors, create investment pro-

and a DST program focused on the same

could be lower than anticipated.)

grams to accommodate market demand

type of asset. The REIT takes a percentage

for passive real estate 1031 exchange

ownership position in the DST with the

Liquidity

products. These programs, subject to the

investor doing a 1031 exchange into the re-

The ability to convert OP Units of the REIT

Securities Act of 1933 and investor suitabil-

maining position or mutually agreed to mi-

to shares can provide liquidity benefits

ity requirements, are often structured as

nority share. The REIT then has an option

that are not standard with DST or property

Delaware Statutory Trusts (DSTs). Purchas-

to purchase the investor interest in the fu-

ownership. Partial or full liquidity may be

ing DST interests provides investors with a

ture through the 721 UPREIT. A typical DST

achieved, depending on availability deter-

vehicle to exchange proceeds from a real

721 Transaction should generally occur no

mined by the company, by converting the

property sale into professionally managed,

less than two years after the beneficial own-

OP Units to shares of the REIT. While this

institutional quality real estate through the

ers acquire the DST interest. An agreement

is a taxable event, it gives more control to

Section 1031 Exchange process.

with a REIT, additionally, does not consti-

spread tax liability or access capital.

tute a guarantee the REIT will execute the Many investors do not hold real estate

UPREIT transaction.

that is attractive to a typical REIT for the

Estate Planning A common estate plan is to pass real estate

UPREIT Transaction. Using the DST, an ac-

Further, should the REIT exercise its option

wealth on to the next generations. The 721

credited investor sells tangible property to

to purchase the investor position in the

Transaction can be beneficial due to the

a third party and uses the proceeds from

DST, the investor may choose to accept OP

increased liquidity provisions. There is

the sale to purchase a fractional interest

Units in the REIT through a Section 721 Ex-

often conflict on the division and timing of

in a DST. Following the 1031 guidelines,

change or as cash proceeds from the sale.

inherited assets within families and DST or

the investor would purchase interest equal

Should the investor take the cash option,

real estate ownership can be restrictive on

to or greater than in the DST, potentially

they can do another Section 1031 Exchange

liquidity. On the other hand, ownership of

deferring any tax liability that may have

or keep the proceeds and pay taxes. Should

OP Units converted to shares can be split

been due.

the investor accept the OP Units in the REIT

up and be passed to heirs at a step-up in

through the 721 Exchange, the investor

basis, eliminating the potential tax liability

(Note: DST 1031 properties are only avail-

may achieve greater diversification by own-

due by the original owner upon passing.

able to accredited investors and accredited

ing the REIT.

entities. An accredited investor is typically

income individually/$300,000 jointly for

What are the Potential Benefits of a 721 Exchange?

Diversification

the last three years; or as having an active

Many investors incur concentration risk by

Series 7, Series 82, or Series 65. Individuals

owning one property in a single market.

defined as having a $1 million net worth excluding primary residence or $200,000

36

MARCH 2022 | SF APARTMENT MAGAZINE

Future Change to 1031 Tax Code It is not unusual to see tax code overhauls with administration changes. The 2017 Tax Cuts and Jobs Act eliminated 1031 ABCs of 721 Exchanges… continued on page 61

SF APARTMENT MAGAZINE | MARCH 2022

37

COLUMN

LEGAL Q&A

By the Unit w r i t t e n b y VA R IOU S AU T HOR S

Housing providers must be careful to avoid unlawful discriminatory practices, even with no such nefarious intentions.

• Source of income Q. On the application I give • Military or veteran status

to potential renters, I ask why they are moving. Is this inquiry permissible?

siderations that carve out exceptions even to these appropriate standards. For example, since source of income cannot be used as a basis to deny an application, and both California and local law now essentially require housing providers to participate in Section 8 and other voucher-based programs, using credit

The above characteristics comprise

history or income qualifications for folks

what are known as protected classes,

that have vouchers or subsidies that

meaning you may never deny or inhibit

guarantee the payment of all or most

the ability of anyone to obtain housing

of the rent is tantamount to unlawful

why they are relocating is probably

based upon these criteria. Period. Dis-

housing discrimination. This is because,

okay. But you are wise to exercise cau-

crimination in leasing (or actions that

in most instances, a voucher-qualified

tion as to what inquiries you are making

can be perceived as discrimination) are

applicant would likely fail to satisfy stan-

of potential applicants. Fair housing

behaviors and actions that factor in the

dard income and credit criteria and, as

claims are on the rise in California, and

protected class of the person.

such, would never be able to qualify for

A. Yes, asking a potential applicant

your housing. Indeed, if rent is provided

housing providers cannot be too careful about avoiding unlawful discrimina-

These actions include:

nefarious intentions.

Let’s briefly summarize fair housing laws

and guaranteed by the government or other financially sound entity, there is

tory practices even if you have no such Refusing to rent units to a protected

no legitimate business purpose to in-

class, or steering persons to particular

come- or credit-qualify such applicants.

units or buildings.

Yet eviction history and prior landlord

as they apply to applicant screening.

• Implying to a protected class mem-

references are likely a permissible line

Stated succinctly, you may never dis-

ber that certain units are not avail-

of inquiry in most circumstances. As-

criminate against someone because

able for rent or viewing when that is

certaining why the applicant is moving

of their:

not true.

and what that applicant’s history is with

• Race, color • Ancestry, national origin • Citizenship, immigration status • Primary language • Age

• Showing certain units or amenities to certain applicants but not others.

• Any sort of rules or policies that can result in unequal access for applicants.

the prior housing provider could shed light as to whether or not the applicant has behavioral issues or otherwise failed to adhere to the requirements of a prior rental agreement.

In fact, California housing providers

• Religion

38

However, there are certain critical con-

• Disability (mental or physical)

Legitimate leasing criteria include

should perform due diligence to ensure

• Sex, gender

credit history, income qualification,

that they are not placing disruptive or

• Sexual orientation

negative references from a previous

otherwise poorly behaved tenants into

• Gender identity, gender expression

housing provider, or prior adverse

an apartment community. That said, this

• Genetic information

eviction history. To that end, exploring

author strongly urges all housing provid-

• Marital status

why a resident is seeking new housing

ers to regularly attend SFAA classes on

• Familial status

is not patently objectionable.

fair housing and best leasing practices,

MARCH 2022 | SF APARTMENT MAGAZINE

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39

as a discrimination complaint can result in

After applying the security deposit to

substantial fines and penalties.

satisfy the COVID-19 rental debt, you should apply to the rental assistance pro-

—Dave Wasserman

gram to seek the remaining balance. For

Q. A tenant is vacating with lots

more instruction on how to apply for rent

A. It is assumed for purposes of this

tance, does not cooperate with the rental

of back rent that accumulated during COVID. Can I keep the security deposit to recoup some lost rent?

relief, turn to page 42 or visit sfaa.org or caanet.org.

If the tenant is not eligible for rental assisassistance application, or, if the application

Q&A that your tenant voluntarily moved

was denied, you may want to file a small

out and is no longer occupying the rental

claims or ordinary civil lawsuit to collect

unit.

the balance of the past due rent when permitted by your local jurisdiction.

Under California law, a security deposit is money that the property owner holds to

A judge will want to see evidence that you

reimburse themselves to cover unpaid rent,

applied to the rental assistance program

costs of repairs for damage caused by the

before a claim is filed.

tenant, cleaning costs, and cost of repairs beyond normal wear and tear.

In an effort to protect tenants and help property owners, there were a bundle of COVID-19-related laws passed by the state legislature. The most recent iteration extended California’s statewide eviction mor-

—Angelica Sandoval The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Dave Wasserman is with Wasserman Law Offices and can be reached at 415-567-9600. Angelica Sandoval is a real-estate attorney with Fried, Williams, & Grice Conner LLP and can be reached at 510-625-0100.

SLP_SFApt_Ad_0813_Shwiff_SFaptAd_0813 8/19/13 3:

atorium through September 30, 2021, and continued protections for renters related to the COVID-19 pandemic.

These laws protected tenants from being evicted if they were unable to pay rent due to a financial hardship related to COVID-19 and provided a process for property owners to cooperate with tenants to apply for rental assistance.

As part of this bundle of laws, one section prohibited the property owner from using the security deposit to satisfy COVID-19 rental debt, unless the tenant agreed in writing. Fortunately, the exception is if the tenancy has ended.

If the tenant has moved out, you are permitted to deduct the unpaid rent from the security deposit and send an itemization of that deduction as you normally would.

California law requires property owners to return the security deposit and/or an itemization of deductions from the security deposit within 21 days after the tenant moves out.

40

MARCH 2022 | SF APARTMENT MAGAZINE

EXPERTISE

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INTEGRITY ■ SERVICE

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VALUE

Legal Questions

?

Confused about local and statewide rental housing laws? Take advantage of SFAA’s legal information network.

Before every SFAA General Membership Meeting, a diverse panel of San Francisco landlord attorneys answers your questions about your property, your tenants and the San Francisco Rent Ordinance. SFAA monthly meetings and legal panels are a benefit just for members, so make sure you are getting the most out of your membership and be sure to attend the next meeting.

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Multi-family residential property sales among top 7 brokers in San Francisco in units sold over 5 quarters* 300 250 200 150 100 50 0 — Other San Francisco Brokerages — * Unit sales volume, transaction-side sales reported to SFARMLS, 1/1/20 –3/31/21, per Broker Metrics as of 4/4/21. Sales reported to MLS: Not all sales are reported.

5+ Unit multi-family property sales in units sold over 5 quarters* among top 7 brokers in San Francisco 60 50 40 30 20 10 0 — Other San Francisco Brokerages — * Unit sales volume, transaction-side sales reported to SFARMLS, 1/1/20 – 3/31/21, per Broker Metrics as of 4/4/21. Sales reported to MLS: Not all sales are reported.

SF APARTMENT MAGAZINE | MARCH 2022

41

NEED MORE RENTAL ASSISTANCE? COVID-19 RENTAL ASSISTANCE DOESN’T HAVE TO BE A ONE-AND-DONE PROPOSITION. Q. How do I apply for additional rental assistance if I previously completed an application and received rental assistance payments, but the tenant has not recertified for additional assistance?

A. Do not submit a new application. Reapplying will slow down processing and may result in an inconsistent application status. Instead, take the following steps: Contact the Emergency Rental Assistance Program (ERAP) call center at 833-430-2122 and select “landlord” from the menu.

Ask the agent to open your application, and that the pages called “tenant information” and “submit” be reopened. If you need to update the landlord information, too, request to have that page opened as well. Log in to your account to update any information on the tenant information page—including updated rent rolls and tenant contact information. While logged in to your application, go to the “submit” page, read through the certifications, and check the appropriate boxes. Sign the application and submit.

Once this process is completed, the new submittal will act just like a new application and will trigger all the appropriate notifications.

Q. How do I apply for additional rental assistance if I did not previously complete an application, but received a rental assistance payment because the tenant applied and received the payment directly, but the tenant has not recertified for additional assistance?

A. In this situation, complete a new application for rental assistance as follows: Register for the program and initiate a new application at housing.ca.gov Complete the landlord section of the application. Under A.16, “Have you or do you intend to file for eviction against this tenant for nonpayment of rents during COVID-19?” select “Yes.” Enter the number of units for which you are potentially seeking eviction. If this is a single application for a single unit, the number will be one.

Under “tenant name,” enter the name of each tenant you are potentially seeking to evict. Enter the case ID next to the name for every tenant where you know there is a pre-existing tenant application. You are strongly encouraged to ask your tenants for case IDs to assist in this process. Entering case IDs will help administrators prevent duplicate applications and will speed up processing.

Complete the remainder of the “tenant information” section and then complete the “submit” section and submit the application.

The submittal will trigger the appropriate notifications to the tenant and the program. Although you will not be paid directly under this circumstance, you will have some insight into the application status and processing as the application moves through the process.

Q. What is the process for a tenant to recertify?

A. The tenant will receive an automated email notification informing them that it is time to recertify if additional assistance is needed. The tenant then completes and submits the recertification application.

If you participated in the original application, a program administrator will reach out to you for updated rent rolls. Payments made under this scenario will go directly to you. If you did not participate in the original application, approved payments will be made directly to the tenant. The tenant is required by law to pay the rental assistance they receive to you.

Q. What if a tenant claims a different amount owed than what I claimed on my application?

A. Program administrators will likely defer to your rent roll when evaluating the amount of rent owed. Please ensure that your records are accurate and easy for administrators to understand.

Q. How long will recertification take?

A. This is unclear, however, fewer recertification applications are pending than initial applications, so the recertification process should be shorter than the initial waiting period.

Q. Does the recertification process require the tenant to participate?

A. Yes. The federal program is based on tenant eligibility, so the tenant must participate for your reapplication to move forward.

So, if you have applied, continue to share information about the program with your tenant and encourage them to apply. Here are some suggestions: The Housing Is Key website ( housing.ca.gov ) templates for emails and letters you can share with your tenant. These materials can be found under Renter & Landlord Resources.

If the tenant is not responding, you could contact a Local Partner Network organization (appointment line: 833-687-0967) and explain that you need help with tenant outreach. They will try to speak to the tenant on your behalf, to build trust and confidence in the process. The Local Partner Network serves both landlords and tenants, and either may request assistance.

The above information was written by Embert P. Madison, Jr., State Advocacy and Compliance Counsel, and originally published by the California Apartment Association. Reprinted with permission.

42

MARCH 2022 | SF APARTMENT MAGAZINE

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The property information herein is derived from various sources that may include, but not be limited to, county records and may include approximations. Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification. © 2022 Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All Rights Reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates fully supports the principles of the Equal Opportunity Act. Each Office is Independently Owned and Operated. Coldwell Banker Commercial and the Coldwell Banker Commercial Logo are registered service marks owned by SF APARTMENT | MARCH 2022 Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. Each sales representative and broker is responsible for complying with any consumer disclosure laws or MAGAZINE regulations.

43

COLUMN

DEBITS & CREDITS

Patch More, Pay Less wr it te n by ELIZ A BET H H. SH W IFF

Don’t miss out on the myriad ways maintenance, repairs, and upgrades can ease your tax burden.

S

from those improvements, they are just handled differently on your tax return; it’s important to know the difference.

The IRS deems a rental property improved if “the amounts paid are for a betterment or restoration or adaptation to a new or different use.” The costs for

pring and summer are the time

expenses, you can still deduct them

improvements are considered non-

of year when property owners

(and show the reimbursement as other

deductible capital expenditures and are

turn their thoughts to hammers

income). When you include utility re-

recovered through depreciation over

and paint—and taxes! Whether

imbursements in your rental income,

the length of their useful life. When you

you’re undertaking a renovation or sim-

you can deduct that same amount as a

make improvements to your rental prop-

ply fixing some leaky plumbing, projects

rental expense.

erty, you should use Form 4562 to report depreciation beginning in the year that

are best accomplished when people are away on vacation, and least expensive

In fact, your deduction opportunities

when Uncle Sam pays part of the cost.

don’t end with the “ordinary” repairs

you make the improvement.

that keep your property in good operat-

Sometimes, the distinction of what

Keeping up with property improve-

ing condition. “Necessary” expenses,

constitutes a repair versus an improve-

ments and repair projects is good busi-

such as advertising, mortgage interest,

ment isn’t clear. In 2013, the government

ness practice for landlords, of course.

property taxes, utilities, and insurance

issued Treasury Decision 9636—the

Equally important is ensuring that you

premiums, are all deductible, too. If you

“final tangibles regulations”—to help

are taking full advantage of the various

have on-site employees, the cost of their

rental property owners determine what

opportunities these activities present to

wages and their health and workers’

costs are deductible and what costs must

ease your tax burden. These opportuni-

compensation insurance is deductible.

be capitalized and depreciated. For ex-

ties differ for owners of rental proper-

And if you charge the cost of repairs to

ample, if you repair sheetrock and then

ties and homeowners; exercising them

your credit card, you can deduct any

paint the wall, that’s a repair; if you shift

properly may be the difference between

interest for the purchase of materials or

or remove the entire wall to modify the

money going into or out of your pocket.

services that went toward that repair.

room and floor plan, that’s an improve-

Property Repairs

If you need to travel to maintain or

frame or replace a busted closet door,

As a homeowner, general repairs you

repair your property, that’s deductible,

that’s a repair. If you widen the door

make to your property—to fix problems

too. That includes driving to the prop-

frame and hang a new door, that’s an

or restore it to its original condition—are

erty to oversee a tenant complaint or

improvement.

all on your shoulders. For the owner of

driving to the store to buy repair parts.

a residential rental property, however,

It can also include expenses for airfare,

repairs and many other expenses are

hotels, and meals if you must travel over-

De Minimis Safe Harbor Election and Routine Maintenance

deductible on your tax return. Accord-

night. (Be extra careful to keep good

An important election for a “small tax-

ing to the IRS, you can deduct “ordinary

records to support activity that involves

payer” landlord (IRS definition: gross

and necessary expenses for managing,

long-distance travel, documenting that

receipts under $10,000,000) is the “de

conserving and maintaining your rental

you are staying within the law.)

minimis safe harbor election,” which al-

ment. If you patch a dinged-up door

property.” This regulation translates into a myriad of potential tax breaks.

44

Property Improvements

lows the expensing of items up to $2,500 per Invoice or Item. Instead of capitaliz-

When it comes to tax returns, “repairs”

ing and depreciating the cost of acquir-

Need to fix a leaky faucet? Deduct it.

and “improvements” are not the same

ing or improving property items over its

Need to replace a broken window?

thing. While you can write off repairs as

useful life, you may now deduct up to

Deduct it. You can even deduct clean-

an expense, you cannot always write off

the $2,500 without being questioned by

ing costs and mowing the lawn. If the

the cost of improvements to your rental

the IRS. Keep in mind that keeping good

tenant pays a reimbursement for these

property. You can still benefit taxwise

books and records is a necessity.

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MARCH 2022 | SF APARTMENT MAGAZINE

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

Laura Strazzo

Brian O’Neill

Maddy Zacks

Laura Strazzo brings broad insight into California real estate law. Her practice covers a range of real estate matters including land use, nondisclosure and boundary-line disputes, construction defects, landlord-tenant, and compliance issues. Laura also has experience in energy and environmental law.

Brian O’Neill brings extensive experience in land use and environmental law.

Prior to joining the firm, Brian worked at the California Coastal Commission on permit appeals for a wide range of projects, including subdivisions, commercial and residential development, affordable housing, and infrastructure. He regularly appears before planning commissions, city councils, and other government agencies.

Maddy Zacks’ practice focuses on real estate litigation, specifically landlord/tenant law. Before entering real estate practice, she worked as an extern for Magistrate Judge Jacqueline Scott Corley in the Northern District of California. She also worked at the Federal Public Defender’s office in Little Rock, Arkansas, where she drafted habeas corpus appeals for men on death row.

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47

The “Routine Maintenance Safe Harbor” is

Previously, landlords couldn’t use Section

Of course, it is very important to maintain

another safe harbor that allows the deduc-

179 to deduct personal property, but that

supporting documents for everything

tion of amounts paid for recurring work

changed with TCJA. Not only can they

reported on your tax returns. If you were

performed to keep a rental property in its

deduct the cost of personal property items

ever to be audited, you will need this evi-

ordinarily efficient operating condition.

purchased for inside a rental property, such

dence to avoid additional taxes and pen-

Routine maintenance is the reasonable ex-

as appliances, furniture, and carpeting,

alties. The necessary support items you

pectation at the time the property is placed

they can also deduct items for the business

need for any deduction expenses include

in service to perform maintenance more

that are used outside a rental unit, such as

invoices, receipts, canceled checks, and

than once during a 10-year period or class

office equipment, cars, and even mainte-

credit card statements.

life. Routine maintenance does not apply

nance equipment, like a lawnmower. The

for amounts paid on a property for better-

maximum expensing limit under Sec-

Green Improvements

ment or restoration.

tion 179 is $1.08 million and the phaseout

Are you concerned about climate change

threshold was increased to $2.7 million for

and ready to do your part to help? You may

2022, adjusted for inflation.

be wondering what kinds of new tax incen-

Bonus Depreciation

tives Uncle Sam offers in TCJA to help you

The Tax Cuts and Jobs Act (TCJA) made significant changes to bonus depreciation,

If your rental business is in California, how-

make energy efficiency upgrades to your

such as the increase to 100% depreciation

ever, this may be cheerless news because

properties. Unfortunately, the news is dis-

in the year purchased on qualified prop-

California does not conform to the federal

appointing, especially for landlords.

erty acquired after September 27, 2017,

guidelines for bonus depreciation or Sec-

and placed in service by 2023. This means

tion 179 deductions. In California, the maxi-

For many years, the government promoted

tangible property with a recovery period

mum Section 179 deduction is limited to

“Energy Star” as an incentive to conserve

of 20 years or less can be 100% fully de-

$25,000 and the threshold cost of property

energy—a program that offered tax cred-

preciated in its first year placed in service.

is $200,000.

its to taxpayers who purchased energyefficient appliances. Energy Star expired

However, 2022 is the final year to take advantage of the full 100% rate of bonus

No matter where your business is, it is

in 2012. Now, instead of focusing on the

depreciation; the bonus depreciation rate

important to keep in mind that when you

conservation of energy, the government’s

will phase down by 20 percent per year

deduct an asset under Section 179, you

green incentives focus on the production

beginning in 2023 and ultimately be elimi-

must continue to use it for business at least

of residential energy. Energy tax credits are

nated after 2026.

50% of the time for as many years as it

offered to offset the cost to taxpayers who

would have been depreciated. Section 179

upgrade their homes with equipment that

Been to an auction lately? If it makes sense

expensing is also limited to your net in-

can generate renewable energy; specifi-

for your property and your market, con-

come for the year—you can’t deduct more

cally, solar, wind, geothermal, and fuel-cell

sider buying used property. Used property

than you made.

technology. The credit is equal to 26% of the cost of such equipment, including in-

acquired after September 27, 2017 also qualifies for 100% bonus depreciation, not

Keep Good Records

stallation, and there is no upper limit on the

just new property. You will need to ensure

The world of properties and taxation is a

amount of the credit for solar, wind, and

the used property was not acquired from a

changing landscape, but there are ample

geothermal (although the fuel-cell technol-

related party.

ways to optimize your tax position if you

ogy has limitations) in 2022.

know what you’re doing. Do yourself a In addition to 100% bonus depreciation

favor and keep good records related to

This attractive opportunity is available

and the ability to apply bonus deprecia-

your rental activities. There are so many

to eco-conscious homeowners for their

tion to used property, the TCJA allows for

important reasons to do so in running

primary home, and even a second home

bonus depreciation on personal property

a business. Keeping good records helps

(except for fuel-cell technology)—unfortu-

that is converted to business use or for the

you keep track of your deductible rental

nately, it is not available for eco-investments

production of income in the same tax year

expenses for all repairs that you do to your

made to rental properties.

it was acquired.

property. It also helps you keep track of

Section 179

property improvements that you need to

As with anything tax-related, if you aren’t

capitalize and depreciate.

clear or have questions about potential tax breaks or liabilities, you should seek guid-

Section 179 is a part of the tax code that is really beneficial to real estate business own-

Good record-keeping also helps you iden-

ers pursuing improvement. It allows busi-

tify all sources of your rental income and

nesses to deduct the full purchase price of

enables you to monitor the overall progress

tangible, long-term personal property in

of your rental properties. Ready access to

the year that it was purchased, rather than

this information will help you prepare your

depreciating the cost over many years.

financial statements and your tax returns.

48

MARCH 2022 | SF APARTMENT MAGAZINE

ance from a tax professional.

Elizabeth H. Shwiff is a partner at Shwiff, Levy & Polo, LLP. She is an expert in linguistics, speaks four languages, and holds multiple degrees. She has earned a stellar reputation for successfully representing clients as a formidable opponent to such entities as the IRS, the Franchise Tax Board, and the U.S. Department of Treasury.

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sfaa 2 2022calendar

sfaa

March

WEDNESDAY, MARCH 2 Lunch & Learn Setting Rental Rates Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

THURSDAY, MARCH 3 Asset Protection for Properties Webinar Zoom Webinar System 1:00 p.m. to. 2:00 p.m.

Members $45 Non Members $65

MONDAY, MARCH 7 Board of Directors Mtg. 11:30 a.m.

WEDNESDAY, MARCH 9 Lunch & Learn Advertising & Marketing Your Unit Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

THURSDAY, MARCH 10 Rent Increases During the Pandemic Webinar Zoom Webinar System 1:00 p.m. to. 2:00 p.m.

Members $45 Non Members $65

WEDNESDAY, MARCH 16 Virtual Member Meeting Update 9:00 a.m.

WEDNSDAY, MARCH 16 SFAA Online Lease Demonstration Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Free for Members

WEDNESDAY, MARCH 16 Lunch & Learn Showings Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

THURSDAY, MARCH 17 Best Practices for Serving Legal Notices Webinar Zoom Webinar System 10:00 a.m. to. 12:00 p.m.

Members $45 Non Members $65

FRIDAY, MARCH 18 Roommate and Tenancy During Covid-19 Webinar Zoom Webinar System 10:00 a.m. to. 12:00 p.m.

Members $45 Non Members $65

TUESDAY, MARCH 22 Setting Up Settlements for Success Webinar Zoom Webinar System 10:30 a.m. to. 12:30 p.m.

Members $45 Non Members $65

April MONDAY, APRIL 4 Board of Directors Mtg. 11:30 a.m.

WEDNSDAY, APRIL 6 SFAA Online Lease Demonstration Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Free for Members

WEDNESDAY, APRIL 6 Lunch & Learn Application & Screening Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

THURSDAY, APRIL 7 Intellirent Demonstration Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Free for Members

FRIDAY, APRIL 8 New Rent Control Laws Webinar Zoom Webinar System 10:00 a.m. to. 12:00 p.m.

Members $45 Non Members $65

WEDNESDAY, APRIL 13 Lunch & Learn Offers, Concessions, ADA Law & Section 8 Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

WEDNESDAY, APRIL 20 Virtual Member Meeting Tenant Attorney Panel 9:00 a.m.

WEDNESDAY, APRIL 20 Lunch & Learn Notices Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

THURSDAY, APRIL 21 Managing Tenants to Avoid Liability Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $65 Non Members $95

WEDNESDAY, APRIL 27 Lunch & Learn Lease Review Webinar Zoom Webinar System 12:00 p.m. to. 1:00 p.m.

Members $45 Non Members $65

FRIDAY, APRIL 29 New Unit Registration & Licensing Webinar Zoom Webinar System 10:00 a.m. to. 11:00 a.m.

Members $45 Non Members $65

SFAA offices will be closed on March 31st in observance of Cesar Chavez Day. 50

MARCH 2022 | SF APARTMENT MAGAZINE

SFAA MEMBER MEETINGS WILL BE HELD VIRTUALLY UNTIL FURTHER NOTICE DUE TO COVID-19. FOR TOPICS AND SCHEDULES, VISIT SFAA.ORG. join online at sfaa.org or call 415.255.2288

2022 join online at sfaa.org or call 415.255.2288

SAN FRANCISCO’S

RENT BOARD FEE

$29.50

Chapter 37A of San Francisco’s Administrative Code allows the city to collect a per-unit fee for each residential dwelling unit that is subject to the San Francisco Rent Ordinance. This fee defrays the entire cost of operation of the Rent Board.

This fee is billed to the landlord each year on the property tax statement sent in November, but the law permits landlords to collect a portion of the Rent Board fee from those tenants in occupancy as of November 1 of each year. A landlord is allowed to collect 50% of the cost of the fee from the tenant. If you have not collected Rent Board fees in the past, you can collect back to 1999.

ALLOWABLE RENT BOARD FEE COLLECTABLE FROM TENANTS 2021-2022

$29.50

CAPITAL IMPROVEMENTS

SFAA’S

TENANT SCREENING SERVICE

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

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.

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%

2020-2021

$25.00

2019-2020

$25.00

2018-2019

$22.50

2017-2018

$22.50

2016-2017

$20.00

2015-2016

$18.50

03/01/16 - 02/28/17

0.2%

$18.00

03/01/15 - 02/29/16

0.1%

03/01/14 - 02/28/15

0.3%

03/01/13 - 02/28/14

0.4%

03/01/12 - 02/28/13

0.4%

03/01/11 - 02/29/12

0.4%

03/01/10 - 02/28/11

0.9%

03/01/09 - 02/28/10

3.1%

03/01/08 - 02/28/09

5.2%

2014-2015 2013-2014

$14.50

2012-2013

$14.50

CONTACT INTELLIRENT FOR MORE INFORMATION:

415-849-4400

2011-2012

$14.50

2010-2011

$14.50

2009-2010

$14.50

2008-2009

$14.50

2007-2008

$13.00

03/01/07 - 02/29/08

5.2%

2006-2007

$11.00

03/01/06 - 02/28/07

3.7%

2005-2006

$10.00

2004-2005

$11.00

2003-2004

$21.50

CONTACT THE SAN FRANCISCO RENT BOARD FOR MORE INFORMATION

415-252-4600 sfgov.org/rentboard

ALLOWABLE RENT INCREASES

2022 – 2023: 2.3%

Effective March 1, 2022, through February 28, 2023, the allowable annual rent increase is 2.3 %.

This amount is based on 60% of the increase in the Consumer Price Index for all urban consumers in the Bay Area. A history of all allowable increases and their effective periods is provided.

ALLOWABLE RENT INCREASES PERIOD

AMOUNT

03/01/22 - 02/28/23

2.3%

03/01/21 - 02/28/22

.7%

03/01/20 - 02/28/21

1.8%

03/01/19 - 02/29/20

2.6%

03/01/18 - 02/28/19

1.6%

03/01/17 - 02/28/18

2.2%

03/01/16 - 02/29/17

1.6%

03/01/15 - 02/29/16

1.9%

03/01/14 - 02/28/15

1.0%

03/01/13 - 02/28/14

1.9%

03/01/12 - 02/28/13

1.9%

03/01/11 - 02/29/12

0.5%

03/01/10 - 02/28/11

0.1%

03/01/09 - 02/28/10

2.2%

03/01/08 - 02/28/09

2.0%

03/01/07 - 02/29/08

1.5%

03/01/06 - 02/28/07

1.7%

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

CONTACT THE SAN FRANCISCO RENT BOARD FOR MORE INFORMATION

415-252-4600 sfgov.org/rentboard

& information SF APARTMENT MAGAZINE | MARCH 2022

51

SFAA Professional Services Directory

1031 TAX DEFERRED EXCHANGE SERVICES

LAWYERS EQUITY EXCHANGE Brian Fogarty 415-701-1234 www.lex1031.com SEQUENT Eric Scaff (415) 834-1031 sequent-rewm.com escaff@sequent-rewm.com

ACCOUNTANTS

SHWIFF, LEVY & POLO LLP Elizabeth Shwiff 415-291-8600 x232 www.slpconsults.com

ALARM COMPANY

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

ARCHITECTURE

OPENSCOPE STUDIO ARCHITECTS Mark Hogan 415-891-0954 www.openscopestudio.com Q ARCHITECTURE Dawn Ma www.que-arch.com

415-695-2700

ASSOCIATIONS

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

ATTORNEYS

415-861-8800

ILENE M. HOCHSTEIN, ATTORNEY AT LAW Ilene Hochstein (650) 877-8288 ilene@hochsteinlaw.net KAUFMAN, DOLOWICH, VOLUCK Ashley Klein 415-926-7612 aklein@kdvlaw.com LAW OFFICES OF 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

BARTH CALDERON, LLP Paul Hitchcock Paul@barthattorneys.com

415-577-4685

LAW OFFICE OF KEVIN P. GREENQUIST Kevin Greenquist 415-977-0444x234 www.ztalaw.com

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

415-409-7611

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

DOWLING & MARQUEZ, LLP Jak S. Marquez 415-977-0444 x232 www.dowlingmarquez.com FRANK KIM ESQ., EVICTION ASSISTANCE Jo Biel 415-752-6070 KIMBALL, TIREY & ST. JOHN LLP Kelli Dodson 800-525-1690 kelli.dodson@kts-law.com www.kts-law.com FRIED & WILLIAMS LLP Clifford E. Fried www.friedwilliams.com

415-421-0100

HAAS NAJARIAN LLP Eric Murphy (415) 788-6330 emurphy@hnattorneys.com

52

HERZIG & BERLESE Barbara Herzig bherzig@hbcondolaw.com

MARCH 2022 | SF APARTMENT MAGAZINE

MCLAUGHLIN SANCHEZ, LLP Michael McLaughlin 415-655-9753 www.msllp.law MILLAR AND ASSOCIATES, APLC James Millar 415-981-8100 x101 Millar-law.com NIVEN & SMITH Leo M. LaRocca leo@nivensmith.com

415-981-5451

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

STEVEN ADAIR MACDONALD & ASSOCIATES, PC Steven Adair MacDonald (415) 956-6488 www.samlaw.net sam@samlaw.net WASSERMAN Dave Wasserman 415-567-9600 Dave@wassermanoffices.com www.davewassermansf.com WIEGEL LAW GROUP Andrew J. Wiegel 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 SOLUTIONS-PREMIER Aurora Garcia-Vidaca 415-893-9551 www.crownandshieldpestsolutions.com PREMIER CANINE DETECTION Jordan Garcia 415-612-6645 www.premiercaninedectection.com

CLEANING SERVICES

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

COMMERCIAL/RETAIL LEASING SERVICES BLATTEIS REALTY CO. David Blastteis www.sfretail.net

415-981-2844

CONSULTANTS: PERMITS & PLANNING

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

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

DRAIN SERVICES

INTERNET SERVICES PROVIDERS

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

COMCAST/XFINITY Michael Juliano www.xfinity.com

ENVIRONMENTAL CONSULTING

LENDING / FINANCIAL SERVICES

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

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

FIRE PROTECTION CONTRACTORS AEC ALARMS

408-298-8888 Ext: 121 SFfire@aec-alarms.com BATTALION ONE FIRE PROTECTION Tim Morse 510-653-8075 www.battaliononefire.com COMMERCIAL FIRE PROTECTION, INC. Laine Sims 925-300-9534 www.fireprotected.com EMERGENCY SYSTEMS, INC. Eric Hagerman (415) 564-0400 esmfire@earthlink.net MAZZY’S FIRE PROTECTION Scott Mazzarella 415-665-5553 www.mazzysfire.com PRIBUSS ENGINEERING, INC. Selina Pribuss 650-588-0447 selina.p@pribuss.com www.pribuss.com

GARBAGE COLLECTION SERVICES

RECOLOGY GOLDEN GATE RECYCLING Minna Tao 415-575-2423 recologysf.com RECOLOGY SUNSET SCAVENGER Dan Negron 415-330-2911 recologysf.com

INSURANCE COMPANIES

ARM MULTI INSURANCE SERVICES Lisa Isom 866-913-6293 www.arm-i.com BARBARY INSURANCE BROKERAGE Gerald Becerra 415-788-4700 www.barbaryinsurance.com COMMERCIAL COVERAGE INSURANCE AGENCY Paul Tradelius 415-436-9800 www.comcov.com GORDON ASSOCIATES INSURANCE SERVICES Dave Gordon, CLU 650-654-5555x6972 David.gordon@gordoninsurance.com

925-495-9922

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

415-794-2176

LENDING / FULL SERVICE BANKS

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

LENDING / INSTITUTIONS

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

PETERS PAINTING SERVICES Peter Pantazelos 415-647-4722 www.peterspainting.com TARA PRO PAINTING INC. Brian Layden www.tarapropainting.com

415-334-3277

PAINTING SUPPLIES

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

PEST CONTROL

ATCO PEST & TERMITE CONTROL & HOME RESTORATION Richard Estrada 415-898-2282 www.atcopestcontrol.com CROWN & SHIELD PEST SOLUTIONS-PREMIER Aurora Garcia-Vidaca 415-893-9551 www.crownandshieldpestsolutions.com THERMAL SOLUTIONS Jeremy Bedford (925) 381-6426 office@thermalsolutionspc.com

PLUMBING & HEATING

C.R. REICHEL ENGINEERING CO. INC. Tim Lordier 415-431-7100 www.crreichel.com PRIBUSS ENGINEERING, INC. Selina Pribuss 650-588-0447 selina.p@pribuss.com www.pribuss.com R & L Plumbing R & L PLUMBING Larry Bustillos 415- 651-4977 larry@rl.plumbing www.rlplumbingsanfrancisco.com

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

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

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

PROJECT MANAGEMENT

MEDIATION

THE BAR ASSOCIATION OF SAN FRANCISCO CONFLICT INTERVENTION SERVICE Scott Goering 415-782-8940 sgoering@sfbar.org

ONLINE PAYMENT SERVICES IMANAGE RENTS Hatef Maoghimi hatef@imanagerent.com wwwimanagerent.com ROOST Chanin Balance chanin@joinroost.com

415-547-0049

(503) 888-2528

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

415-254-7818

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

CREATIVE WEALTH CAPITAL MichaelGallin mike@creativewealthcapital.com

PROPERTY MANAGEMENT

ADVENT PROPERTIES, INC. Benjamin Scott, CCRM 510-289-1184 www.adventpropertiesinc.com ALEXANDERSON PROPERTIES Eric Alexanderson 415-285-3737 www.alexandersonproperties.com AMORE REAL ESTATE, INC Jerry Hsieh 415-567-4800 www.amoresf.com AYS MANAGEMENT Kevin Newsome 510-708-0165 ayspropertymanager@gmail.com BEAM PROPERTIES, INC. Darius Chan darius@sfbeam.com

415-254-8679

BORN PROPERTY MANAGEMENT Jason Born 650-271-7048 x 111 Jason@bornpm.com

SF APARTMENT MAGAZINE | MARCH 2022

53

BERENDT PROPERTIES Craig Berendt craig.berendt@gmail.com

415-608-3050

EBALDC Felicia Scruggs FScruggs@ebaldc.org

510-287-5353

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

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

EMBC Nancy Wong www.ebmc.com nancywong@ebmc.com

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

EQUITY ONE Brenda M. Obra www.equity1sf.com

CREATIVE WEALTH CAPTIAL Michael Gallin 415-779-6241 mike@creativewealthcapital.com

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

HOGAN & VEST INC. Simon Wong hoganvest.com

DEWOLF REALTY CO. INC. William A. Talmage www.dewolfsf.com

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

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

415-221-2032

(707) 584-5123

415-441-1200

property management 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

CECCHINI REALTY CO. Dante Cecchini, CCRM www.cecchinirealty.com

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

415-550-8855

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

54

415-648-1516

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

GORDON CLIFFORD PROPERTIES, INC. Patrick Clifford 415-613-7694 patrick@gcpropertiessf.com 415-421-7116

INCOME PROPERTY SPECIALISTS Clayton Llewellyn 408-446-0848 www.ipsmanagement.cc JACKSON GROUP PROPERTY MANGEMENT, INC. Raymond Scarabosio 415-608-8300 ray@jacksongroup.net JAMES D. MULLIN REAL ESTATE BROKER James D. Mullin 415-470-0450 jamesdmullinre@gmail.com JD MANAGEMENT GROUP, INC. Jonathan Davis 510-387-7792 jonathan.davis@jdmginc.com LINGSCH REALTY Natalie M. Dress www.lingschrealty.com

415-648-1516

MERIDIAN MANAGEMENT GROUP Randall Chapman 415-434-9700 www.mmgprop.com MYND MANAGEMENT, INC. Stacy Winship 510-306-4440 www.mynd.co NEW GENERATION INVESTMENTS Jonathan Ng 415-735-8233 jtng.ngi@gmail.com

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

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

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

415-386-3111

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

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

PILLAR CAPITAL REAL ESTATE Jonathan Ng (415) 885-9584

SUTRO PROPERTY MANAGEMENT, INC. Salman Shariat 415-341-8774 www.sutroproperties.com VERTEX PROPERTY GROUP Craig Berendt 415-608-3050 vertexsf.com WEST & PRASZKER REALTORS Michael Klestoff 415-661-5300 www.wprealtors.com WEST COAST PROPERTY MANAGEMENT Eric Andresen 415-885-6970 www.wcpm.com

members MARCH 2022 | SF APARTMENT MAGAZINE

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

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 Kristine Abbey 650-290-3084 www.rockawayresidential.com ROCKWELL PROPERTIES Mark Kaplan 415-398-2400 propertymanagement@rockwellproperties.com RNB PROPERTY MANAGEMENT GOLDEN GATE Kaveh Gorgani 415-413-3827 kaveh@rnbemail.com www.rnbgoldengate.com SAN FRANCISCO RENTAL CONCIERGE Danielle Mahoney 415-532-0041 danielle@sfrentalconcierge.com www.sfrentalconcierge.com SHARVEST PROPERTY MANAGEMENT, LLC Timothy D. Gilmartin 650-347-2020 tim@thegilmartins.com SIGNATURE REALTY PROPERTY MANAGEMENT Paul Montalvo 650-364-3167 paul@paulmontalvo.com SIERRA PROPERTY PROFESSIONALS Sonali Herrera sierrappinc@gmail.com SKYLINE PMG, INC. Nicholas Bowers 415-968-9903 Nicholas@skylinepmg.com STRUCTURE PROPERTIES Corey Eckert 415-794-0064 www.structureproperties.com SUTRO PROPERTY MANAGEMENT, INC. Salman Shariat 415-341-8774 www.SutroProperties.com THRIVE PROPERTY MANAGEMENT, INC. Giovani Franco 650-296-3880 www.thrivecommunities.com W. PROPERTY MANAGEMENT Gary Petrison 707-545-6187 gary@wpropertymanagement.com WEST COAST PROPERTY MANAGEMENT Eric Andresen 415-885-6970 www.wcpm.com WEST & PRASZKER REALTORS Michael Klestoff 415-699-3266 www.wprealtors.com WOOD PARTNERS Melissa Rankin 628-251-1101 melissa.rankin@woodpartners.com YMPG Yelena Gelzer 415-260-6325 yglezer@ympg-management.com

PROPERTY MANAGEMENT SOFTWARE

APPFOLIO Mindy Sorenson 805-364-6098 mindy.sorenson@appfolio.com HEMLANE, INC. Dana Dunford dana@hemlane.com

385-355-4361

YARDI Kelly Krier kelly.krier@yardi.com

805-699-2040

REAL ESTATE APPRAISALS MARK WATTS COMMERCIAL APPRAISAL Mark Watts 415-990-0025 www.markwattscommercialappraisal.com HARPER & ASSOCIATES Jay Harper jharpsf@att.net

415-647-9243

REAL ESTATE BROKERS & AGENTS

ALAIN PINEL INVESTMENT GROUP Mirella Webb 415-814-6699 mwebb@apr.com BERKSHIRE HATHAWAY FRANCISCAN PROPERTIES Edward Milestone 415-994-5969 MilestoneRealEstateSF@gmail.com BIG TREE PROPERTIES Evan Matteo 415-305-4931 evan@bigtreeproperties.com COLDWELL BANKER COMMERCIAL NRT Steven Caravelli 415-229-1367 steven.caravelli@cbnorcal.com COLLIERS INTERNATIONAL- JAMES DEVINCENTI James Devincenti 415-288-7848 www.THEDLTEAM.com COLLIERS INTERNATIONAL Payam Nejad 415-288-7872 www.colliers.com/payam.nejad COMPASS COMMERCIAL BROKERAGE John Antonini 415-794-9510 john@antoninisf.com COMPASS COMMERCIAL BROKERAGE Chris J. Connor chris.oconnor@compass.com COMPASS COMMERCIAL BROKERAGE Adam Filly 415-516-9843 adam@adamfilly.com COMPASS COMMERCIAL BROKERAGE John Kirkpatrick (425) 412-0559 john.kirkpatrick@compass.com www.johnkirkpatrick.com COMPASS COMMERCIAL BROKERAGE Jay Greenberg (415) 378-6755 jay@jayhgreenberg.com CORCORAN GLOBAL LIVING COMMERCIAL Terrence Jones 415-786-2216 terrence@terrencejonesSF.com www.terrencejones.com EXP COMMERICAL Jeremy Williams 415-932-9846 jeremy@jeremywilliams.com www.sfcommercialrealty.com FERRIGNO REAL ESTATE Chris Ferrigno 415-641-0661 www.ferrignorealestate.com HRH REAL ESTATE SERVICES CORPORATION Renee A. Engelen (415) 810-6020 www.hrhrealestate.com ICON REAL ESTATE INC. Jason Quashnofsky jason@iconsf.com

(415) 370-7077

KILBY STENKAMP-VANGUARD PROPERTIES Kilby Stenkamp 415-370-7582 LESLIE BURNLEY Leslie Burnley

415-717-8709

leslie.j.burnley@gmail.com leslieburnley.com MARCUS & MILLICHAP Sanford Skeie 415-625-2153 www.marcusmillichap.com MORGAN REAL ESTATE ADVISORS, INC. Laurence Morgan 415-300-6503 laurence@morganrealestateadvisor.com www.morganrealestateadvisor.com NEWMARK KNIGHT FRANK Matthew C. Sheridan 415-273-2179 aptgroupsf.com S&L REALTY Robert Link www.slrealty-sf.com

415-386-3111

STEELE PROPERTIES Ryan Steele 415-881-7762 www.steeleproperties.com W. REAL ESTATE Tim Mueller 415-961-6531 timothymueller@hotmail.com WEST & PRASZKER REALTORS Michael Klestoff 415-312-2245 klestoffmre@aol.com VANGUARD COMMERCIAL Allison Chapleau 415-516-0648 allison@allisonchapleau.com www.allisonchapleau.com ZEPHYR REAL ESTATE Dawn Cusulos 415-678-8854 dawncusulos@zephyrre.com

REAL ESTATE INVESTMENTS COMPASS COMMERCIAL BROKERAGE Trigg Splenda 415-593-8616

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

REFINISHING / RESURFACING SERVICE

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

RENT BOARD PETITIONS

PROPERTY MANAGEMENT SYSTEMS Michelle L. Horneff-Cohen 415-661-3860 www.propertymanagementsystems.net REAL MANAGEMENT COMPANY Melinda Greene 415-230-8895 www.RMCsf.com RENT BOARD PASSTHROUGHS Kim Boyd Bermingham 415-333-8005 www.rentboardpass.com

RENTAL LISTING SERVICES APARTMENT LIST Alex Mashburn 678-467-0411 amashburn@apartmentlist.com COSTAR Aj Herlitz www.costargroup.com aherlitz@costar.com

(844) 459-1495

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

SF APARTMENT MAGAZINE | MARCH 2022

55

sfaa sfaa 2022 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

$425 +

$7 per unit =

23 +

$380 +

$9 per unit =

TOTAL UNIT AMOUNT:

TOTAL AMOUNT:

Units

Base Fee

Unit Fee

1-22

$525 +

$4.50 per unit =

23 +

$480 +

$6.50 per unit =

RELISTO Eric Baird www.relisto.com eric@relisto.com

Contact Person Company/Title Address Zip

Mobile Phone Email Address

Website PAYMENT METHOD Amex

MC

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

LINGSCH REALTY Natalie M. Drees www.lingschrealty.com

CONTACT INFORMATION

Check

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

415-509-3456

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

ASSOCIATE MEMBER DUES: $499

State

RESIDENTIAL LEASING

J. WAVRO ASSOCIATES James Wavro www.jwavro.com

TOTAL AMOUNT:

City

949-702-1508

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

MANAGEMENT COMPANY DUES

TOTAL UNIT AMOUNT:

ZUMPER, INC. Connor Hodges connor@zumper.com www.zumper.com

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

REGULAR MEMBER DUES

1-22

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

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

415-648-1516

415-236-6116, x101

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

415-409-3263

RENTSFNOW Claussen kclaussen@veritasinv.com

415-762-0213

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

SECURITY

ADT SECURITY MULTIFAMILY Jeanette Mendez (817) 776-0301 jjmendez@adt.com TRKA AMERICAS Isabella Restrepo irestrepo@trakausa.com

407-735-1728

SECURITY DEPOSIT ALTERNATIVES THE GUARANTORS Jules Thetford jules@theguarantors.com

214-403-2792

SEISMIC RETROFIT & STRUCTURAL ENGINEERING

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

56

MARCH 2022 | SF APARTMENT MAGAZINE

THE GUARANTORS Jules Thetford jules@theguarantors.com

214-403-2792

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

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

LIVABLE Daniel Sharabi www.livable.com

415-937-7283

TENANT PLACEMENT & LISTING

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

WATER CONSERVATION SERVICE

SF PUBLIC UTILITIES COMMISSION Chandra Johnson 415-554-0704 www.conserve.sfwater.org

WATER DAMAGE SERVICE

FIRE AND WATER DAMAGE RECOVERY Maria Neumann 800-886-1801 www.waterdamagerecovery.net

WATERPROOFING

KELLEY PAINTING AND WATERPROOFING Mitchell Kelley 415-847-7883 www.kelleypaintingandwaterproofing.com

ad index NEED A PROFESSIONAL

CONTRACTOR OR VENDOR?

ACCOUNTANTS

Shwiff, Levy & Polo, LLP ALARM COMPANIES

AEC Alarms

ARCHITECTURE & DESIGN SERVICES

Adapt Dwellings Openscope Studio ATTORNEYS

Fried, Williams & Grace Conner LLP Kaufman, Dolowich & Voluck Rhino Process Serving, LLC Zacks, Freedman & Patterson, PC FIRE ESCAPE CONTRACTORS

Great Escape Fire Escape LOCKSMITHS

Crown Lock & Safe Warman Security PAINTING CONTRACTORS

Colores Painting Kruit Painting Pac West Painting Tara Pro Painting

PETITION SERVICES

Rent Board Passthroughs

40 25

PROPERTY MANAGEMENT SOFTWARE

31 46 59 58 10 47 64 32 57 10 65 40 64

Yardi Breeze

68 45

47 46 12 6 62 19

REAL ESTATE BROKERS

Amore Real Estate 65 Coldwell Banker Commercial / McGue 13 Coldwell Banker Commercial / Caravelli 43 Colliers / Devincenti 2 Compass / Antonini 67 Compass / Bonn & Webb 17 Compass / Filly 11 Compass / Greenberg & Splenda 3 Compass / Pugh 41 Corcoran / The Jones Team 15 EXP Realty / Williams 37 HRH Real Estate 62 Kay Properties 39 Marcus & Millichap 26-27 Newmark / Sheridan 33 Vanguard Commercial / Chapleau 9 Vanguard Properties / Stack 32 UTILITIES BILLING SERVICES

Livable 32

PROPERTY MANAGEMENT & MAINTENANCE & RESIDENTIAL LEASING

Gaetani Real Estate, Inc. Maven Maintenance

Real Management Company Rentals in SF Structure Properties Vertex Properties West Coast Property Management

59

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.

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415.775.8513 SF APARTMENT MAGAZINE | MARCH 2022

57

Rent Board Redux… continued from page 18

housing services. The ALJ held that: the rent increase notice effective September 1, 2020 was not authorized by Section 1.21 because it was improperly served before the landlord’s petition was filed;

Founded 35 years ago, Kaufman, Dolowich & Voluck is an internationally recognized litigation firm, meeting the diverse demands of our clients.

The Bay Area’s complicated and fast-moving real estate industry presents property owners with exceptional opportunities and challenges. KDV’s real estate practice provides a full spectrum of services, allowing clients to rely on one firm for all of their real estate needs.

that no increase was otherwise permitted under Section 1.21 because the tenant continues to occupy the unit as a principal place of residence; that the September 1, 2020 rent increase was not authorized

by Costa Hawkins because no subtenant occupied the unit; and that the property owner is liable for rent reductions in the amount of $2,600.00 for loss of a parking space that was included in the tenant’s

Ashley E. Klein

initial base rent.

Managing Partner of San Francisco Office Co-Chair of Real Estate Practice Group

On appeal, the property owner maintains

Ashley E. Klein represents clients ranging from real estate investment trusts, homeowners in wrongful eviction defense, unlawful detainer, and property management matters. She counsels Bay Area homeowners about their rights and options under the SF Rent Ordinance, statewide rent control regulations and the Costa-Hawkins Rental Housing Act.

a separate property, which is where the

Landlord-Tenant Disputes

A. Jeanne Grove

Managing Partner of Sonoma Office Co-Chair of Real Estate Practice Group HOA Disputes

A. Jeanne Grove focuses her practice on real estate and business litigation, including HOA and co-ownership issues, purchase/sale disputes and nondisclosure claims, and boundary, title, development, and construction matters. She has 15 years of experience in mediation and arbitration, as well as all phases of civil litigation, from the pleading stage to trial and post-trial proceedings.

Laura L. Campbell Attorney

Land Use Disputes Laura L. Campbell has extensive experience in landlordtenant litigation. She represents clients in breach of contract matters, quiet title actions, unlawful detainer lawsuits, tenant buy-out negotiations, and property management resolutions.

She specializes in SF Rent Board matters, and routinely handles lot splits, mergers public hearings, zoning issues and ADU permitting.

that the ALJ ignored the evidence that the tenant claims a homestead exemption on tenant actually resides, and that the ALJ misconstrued the circumstances surrounding the tenant’s use of the parking space in the back of the building.

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

Rent Board Updates Acting Executive Director Varner told the Board that the Rent Board office remains open Monday through Friday with counseling available in-person or by phone, and staff continue to work a hybrid in-office/remote schedule following City policy.

Staff are also continuing to work with the architecture division of Public Works for the the planned relocation of the Rent Board’s offices to the 6th and 7th floors of the existing building, and that several recruitments are currently underway for various open positions.

Acting Director Varner thanked Rent Board staff for their work during the recent Rent Board fee exemptions period,

San Francisco, CA Office 425 California Street, Suite 2100 • San Francisco, CA 94104 (415) 926-7600 • aklein@kdvlaw.com Sonoma, CA Office 19327 Sonoma Highway, Suite 100 • Sonoma, CA 95476 (707) 509-5260 • jgrove@kdvlaw.com • lcampbell@kdvlaw.com

which she described as a major transition in the Rent Board’s history. She stated that everyone on staff has been working very hard during this time, and that the counseling staff in particular have answered hundreds of calls from the public regarding the new Rent Board fee process. She

58

MARCH 2022 | SF APARTMENT MAGAZINE

If Only Your ADU Could Bill Itself...

Now it can!

Join Livable and never worry about pro-rata utility billing again.

Go to: www.livable.com/SFAA to Learn More!

SF APARTMENT MAGAZINE | MARCH 2022

59

sfaa sfaa 2022 What You Need to Know

stated that staff will be receiving assistance from 311 for phone calls concerning the fee in the near future.

Rental Housing Inventory Legislation Implementation Commissioner David Wasserman began the discussion by stating that some members of the housing industry would like to be involved in implementation of the Housing Inventory legislation, and

2022 SFAA UPDATES

that they would invite equal participation from tenant groups. He said that property management companies are concerned

VIRTUAL MEMBER MEETINGS WEDNESDAY, MARCH 16 9:00 A.M. WEDNESDAY, APRIL 20 9:00 A.M.

with how the registration process will work, and whether it will be possible to report data for multiple units simultaneously. He also said that some members of the housing industry would like to meet with Rent Board staff regarding the Housing Inventory to express their needs and concerns before the first deadline in July of 2022.

UPCOMING CLASSES

Acting Executive Director Varner said that

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 50.

technology vendor to develop the online

she has been working with the Rent Board’s portal and that there is flexibility in design, which should allow some of these concerns to be addressed.

Commissioner Wasserman said that larger

SFAA OFFICE CLOSURE

housing providers simply wanted to make

While the SFAA office remains closed to the public, 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.

implementation process to minimize prob-

sure they had a seat at the table during the lems with compliance.

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

Go Online!

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

60

MARCH 2022 | SF APARTMENT MAGAZINE

Find more information on SFAA classes, apartment industry news & excerpts from SF Apartment Magazine at www.sfaa.org

ABCs of 721 Exchanges… continued from page

Prevent Fires.

exchange for all assets besides real estate, and in the past year, legislative proposals have been made to further limit eligibility for 1031 exchanges. Proposed changes to Section 1031 are nothing new and will likely continue in the future. The 721 Transaction may be an attractive alternative to investors concerned about the prospect of restrictions on 1031 exchanges.

The information in this article is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice nor does this informational material constitute an offer to purchase or sell securitized real estate investments. Please consult the appropriate professional regarding your individual circumstance.

IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax concepts, therefore you should consult your legal or tax professional regarding the specifics of

Tape and Bag Lithium Batteries

your particular situation.

Because investor situations and objectives

What should you do with old lithium batteries? A big part

vary this information is not intended to in-

of the answer is clear tape. Old lithium batteries may no

dicate suitability for any individual investor.

longer have the power to run devices, but they can still

There are material risks associated with

release energy though their contact points. Lithium bat-

investing in DST properties and real estate

teries that are not taped can cause fires in collection

securities including liquidity, tenant vacancies, general market conditions and com-

trucks and recycling facilities, and harm workers.

petition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general

•

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

•

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

•

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

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.

Peter K. Fisher co-founder and principal at Sequent Real Estate + Wealth Management.

SF APARTMENT MAGAZINE | MARCH 2022

61

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Give 10 Get 10!

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62

MARCH 2022 | SF APARTMENT MAGAZINE

PROVEN EXPERTISE IN: PROPERTY MANAGEMENT PROPERTY LEASING SALES & ACQUISITIONS CONSULTING PROJECT MANAGEMENT CONTRACT NEGOTIATIONS

PRESIDENT Professional Property Managers Association of San Francisco

sfaa’s Roommate & Tenancy During COVID-19 Understanding Costa-Hawkins, Replacement Roommates, New Occupants, and How to Assert Your Rights When Non-Leaseholders Occupy Your Apartment Buildings.

This subtenant, roommate, and additional occupancy course addresses commonplace situations when the persons you originally leased to bring in new roommates, vacate the apartment yet leave people behind, submit rent payments from unknown persons, get married/have children while living in the apartment, or otherwise decide to change the make-up of who is living in your building either with or without your knowledge and consent.

Instructors: Dave Wasserman and Curtis Dowling, Dowling & Marquez LLP DATE & TIME:

Friday March 18, 2022 10:00am – 12:00pm COSTS:

Members: $45 Non-Members:$65

REGISTRATION:

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

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

sfaa’s 2022 Lunch & Learn

Setting Rental Rates Webinar LUNCH & LEARN SETTING RENTAL RATES WEBINAR

Confused about the current rental market? Worried your current rent is too much and don’t know what to do about it?

Come learn on your lunch break about setting the rent. Topics like rent concessions and ancillary fees will also be covered.

INSTRUCTOR

Michelle Horneff-Cohen of Property Management Systems DATE & TIME

Wednesday, March 2 12:00 p.m. – 1:00 p.m.

COST

Members: $45 Nonmembers: $65

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

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

SF APARTMENT MAGAZINE | MARCH 2022

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Market View… continued from page 16

In 2020, the pandemic shut down our marketplace for a few months, and by midsummer, a couple of transaction made it across the finish line. At the same time, a mass exodus from the city began, and it was difficult for rental property owners and investors to focus on sales, because stabilizing operations was the priority.

We worked our way through the dark days of 2020’s fourth quarter, and then we saw some light with the soft opening of some business as we entered 2021. We got to a slow start, but we saw positive momentum throughout the year. The stats above show big increases in dollar volume and transaction levels in 2021, coupled with single-digit percentage declines in value indicators.

Meanwhile, rents in most neighborhoods rebounded as the city reopened. Today, many neighborhoods are back to pre-pandemic rent levels but a few areas are still struggling due to the City’s unresponsiveness to a growing homeless population, and a lack of law enforcement.

Since 2019, the city’s population has declined by 2%. Populations dropped in almost every Bay Area County since the pandemic hit, and San Francisco saw the largest decline percentage-wise. While many left the city voluntarily, it is interesting to note that a natural decline in population took place during this time with a reduction in births and an increase in deaths. As mentioned above, rents have rebounded from pandemic lows and the biggest unknown factor facing future rent growth is if and when will people return to offices. There are many different opinions out there related to the future of office work versus remote work, and only time will tell what is going to happen on this front.

Most experts agree that interest rate increases are coming, and a consensus expectation is that there will be three or four rate hikes by the Federal Reserve in 2022.

Recently, the central bank strongly hinted that the first rate hike will happen in March, and the market is now pricing in as many as five increases this year alone. Rates already

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MARCH 2022 | SF APARTMENT MAGAZINE

ticked up a bit in January 2022, and this will ultimately effect values and the economy as we progress through the year.

Fundamentals in the market have stabilized, and I expect this stability to continue throughout 2022, subject to the extent of government interference.

Government at the local, state, and federal level is the biggest threat to our marketplace. On a local level, we have an ever-increasing homeless population and lack of law enforcement coupled with an obscene media narrative focused on demonizing landlords. A migration from the state continues as successful individuals and companies move to business- and tax-friendly states. At the federal level, the political parties do not resemble what they were a few years ago. Apartment owners are very knowledgeable about leverage and debt.

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They understand fiscal responsibility is necessary to succeed. Biden’s “Build Back Better” plan may prove to be a failure, and a costly one at that. Interest rates are rising, and our national debt is exploding.

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Burying our country with more debt that consumes more tax revenue will not help families. The rising debt and rising rates are a meteor hurling right at us and the government’s response is “don’t look up.”

I believe in the hard-working people who create value and revenue for the government. The private sector will continue to carry the public sector and must push for a change in current policies.

For additional information related to any data points and/or market news, please contact Jay Greenberg at jayhgreenberg@apr.com.

Be On Your A Game.

Many years of experience with property management companies and property owners.

Kruit Painting Inc. 415.254.7818 COMMERCIAL & RESIDENTIAL APARTMENT BUILDING SPECIALIST INTERIORS & EXTERIORS EXCELLENT REFERRALS FREE ESTIMATE

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

87 Loomis St., San Francisco CA 94124 www.kruitpainting.com • License No. 846351

SF APARTMENT MAGAZINE | MARCH 2022

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2022 Winter Day 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

3/2/2022

2PM-5PM

$85.00

$100.00

PMR101

Renting the Property

3/9/2022

2PM-5PM

$85.00

$100.00

PMR102

Beginning and Maintaining the Tenancy

3/16/2022

2PM-5PM

$85.00

$100.00

PMR103

Renewal of Tenancy and Ending the Tenancy

3/23/2022

2PM-5PM

$85.00

$100.00

PMR104

Maintenance Management: Maintaining the Property

3/30/2022

2PM-5PM

$85.00

$100.00

PMR105

Liability & Risk Management

4/6/2022

2PM-5PM

$85.00

$100.00

PMR106

Budget Development and Implementation

4/13/2022

2PM-5PM

$85.00

$100.00

PMR107

Fair Housing: It’s the Law

4/20/2022

2PM-5PM

$85.00

$100.00

PMR108

Professional Skills for Supervisors

4/27/2022

2PM-5PM

$85.00

$100.00

EXAM

CCRM Final Exam

5/4/2022

2PM-5PM

FREE

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

See schedule below

FREE

Total Due:

To Register

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

Cancellation Policy: Cancellations must be made 72 hours in advance for a refund. SFAA does not provide refunds for No-Shows. Non-members must pay by credit card only!!! *Students requesting CalBRE Continuing Education Credits must show picture ID, immediately before admittance to the live offering.

CCRM Certification Renewal Policy: In order to keep the certification active, CCRMs must complete twelve hours of continuing education credits & submit a renewal application along with a renewal fee every other year (2 hours of these credits must be in Fair Housing)

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MARCH 2022 | •SF980 APARTMENT MAGAZINE 800.967.4222 Ninth Street, Suite 1430 • Sacramento, CA 95814

JOHN ANTONINI + DANIEL FOLEY MULTIFAMILY + MIXED-USE + ADD-VALUE "A ship is safe in the harbor, but that's not what ships are for." - John Shedd

FO R SA L E 2074-2078 Bush Street Classic Victorian located in Lower Pacific Heights Three Units, Two Vacant One block from Fillmore St + Japantown Well Maintained Original Charm

2301 Webster Street Six Unit Mixed-Use Building Pacific Heights Neighborhood Four Residential Units + Two Commercial Units One block from Fillmore Shopping & Restaurants John Antonini

Daniel Foley

415.794.9510

415.866.7997

john@antoninisf.com

daniel@danielfoley.com

www.antoninisf.com

www.danielfoley.com

DRE 01842830

DRE 01866714

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

SF APARTMENT MAGAZINE | MARCH 2022

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.

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TO MOST PEOPLE, THIS IS JUST A SMART LOOKING DUPLEX

TO YOU, IT’S BEEN A SMART WAY TO DOUBLE YOUR MONEY. We know the properties we manage mean more to owners like you than meets the eye. That’s why, for 75 years and across three generations of our 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. celebrating

gaetanirealestate.com 415.668.1202

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