LOS ANGELES, May 23, 2019 — With Memorial Day just around the corner, it is just about time to light up the grill, pack up the family van and take advantage of another sunny California summer. To make sure that everyone gets to enjoy a worry-free season, the American Red Cross has some safety tips to keep you going all summer long.

WATER SAFETY

Before going in, on or around the water, every family member should become “water smart.” This starts with learning to be safe, making good choices and achieving basic water competency skills. Everyone should be able to enter the water, get a breath, stay afloat, change position, swim a distance and then get out of the water safely. A variety of water safety courses and resources are available at redcross.org/watersafety.

1. Prevent unsupervised access to water. Fence pools and spas with adequate barriers, keep a constant eye for any water dangers such as portable splash pools/slides, buckets and bathtubs.
2. Adults should actively supervise children and stay within arm’s reach of young children and new swimmers. Kids need to follow the rules.
3. Always wear a U.S. Coast Guard-approved life jacket when on a boat and if in a situation beyond someone’s skill level.
4. Swim as a pair near a lifeguard’s chair – everyone, including experienced swimmers, should swim with a buddy in areas protected by lifeguards. Designate a ‘Water Watcher’ to keep a close eye and constant attention on children and weaker swimmers in and around the water until the next Water Watcher takes over.
5. Download the Red Cross Swim App for kid-friendly games and activities and water safety information for parents and caregivers of young people learning how to swim. Download the app for free by searching for “American Red Cross” in your app store or at redcross.org/apps.

GRILLING SAFETY A recent Red Cross survey showed three-in-five adults have walked away from a grill while cooking, which is one of the leading causes of grilling fires. Grilling fires cause more than 9,000 home fires on average each year. To avoid this, the Red Cross offers these grilling safety tips:

1. Always supervise a barbecue grill when in use. Don’t add charcoal starter fluid when coals have already been ignited.
2. Never grill indoors – not in the house, camper, tent or any enclosed area.
3. Make sure everyone, including pets, stays away from the grill.
4. Keep the grill out in the open, away from the house, deck, tree branches or anything that could catch fire. 
5. Use the long-handled tools especially made for cooking on the grill to help keep the chef safe.

BE SAFE IN A CROWD 

If summer plans include places where crowds may gather, such as at an amusement park or concert, people can expect to wait in lines and possibly face extra security measures, along with the possibility of getting separated from their group. The Red Cross has safety steps to follow:

1. Have a few different methods to communicate – cell phone, tablet, calling card for a landline phone. Stay with the group – don’t go off alone. All adults should have a cell phone and exchange numbers with the others in the group. Plan where to meet should someone become separated.
2. Find out what is allowed when it comes to items such as coolers, backpacks, etc. to avoid having to throw them away.
3. Dress appropriately and in layers to be ready for any change in the weather. Stay hydrated. Apply sunscreen regularly.
4. Watch the weather and seek shelter if any severe weather warnings are issued. Know where the exits and shelters are.
5. Be on the lookout for suspicious activity and don’t be afraid to report suspicious people or packages.

Accidents and Emergencies Happen

The Red Cross has several resources to help people learn how to treat bee stings, burns and heat emergencies including training courses (redcross.org/takeaclass), a free First Aid App and a First Aid Skill for Amazon Alexa-enabled devices. 

Right now, the Red Cross has a critical shortage of type O blood – the most needed blood type in the hospital. Type O negative is the universal blood type and what emergency room personal reach for in the most serious situations when there is not time to determine a patient’s blood type. Donors are encouraged to schedule a blood donation appointment today by using the Blood Donor App, by visiting RedCrossBlood.org, or calling 1-800-RED CROSS. Individuals can also open the Red Cross Blood skill on an Alexa-enabled device with a selection of prompts such as, “Alexa, open Red Cross Blood Skill” and ask, for example, “Alexa, find a blood drive.”

About the American Red Cross:

The American Red Cross shelters, feeds and provides emotional support to victims of disasters; supplies about 40 percent of the nation’s blood; teaches skills that save lives; provides international humanitarian aid; and supports military members and their families. The Red Cross is a not-for-profit organization that depends on volunteers and the generosity of the American public to perform its mission. For more information, please visit redcross.orgorcruzrojaamericana.org, or visit us on Twitter at @RedCrossLA or@CruzRojaLA.

by Becky Bower

The first quarter of 2019 has been exceptionally busy for legislators drafting acts, bills, and ordinances intended that would have impacts on the rental housing industry. From the increasing congressional popularity of “Just Cause” evictions laws and rent control, to the implementation of a statewide rental registry – take a few moments to update yourself on what’s new and pending in California legislation.

California’s 2019 state legislative session has a projected end date of September 13, 2019. Keep in mind that this state has full-time legislators, allowing the legislature to meet throughout the year after adjourning their regularly scheduled sessions. Most of the state pending bills are still in Committee.

by Nick Schoch

Should you write-off almost anything? Maybe not if you want to refinance your property and get access to your hard-earned equity. Consider that for every $1 reduction in reportable income, you could decrease your potential loan amount by $11-13.

By Elaine Simpson

Typical emergency situations, in property management lingo, cover “fire, flood or blood”.  Take a look at the headlines this month and most of our country has suffered from some type of disaster or emergency situation: wildfires, hurricane caused high winds and flooding, earthquakes, tornadoes, bomb threats, renegade shooters, and the list goes on.  One of the duties of a property management company and its staff is to have a contingency plan in case of an emergency situation.

by Philippe Hartley

Alan Stone stands on the edge of the roof parapet, his 18-unit apartment building beneath him, arms akimbo and heels sunken into the blinding white of the brand-new surface membrane.  Workmen are affixing the last seams, but his eyes sweep the street 30 feet below, scoping the comings and goings of his tenants.  He’s been keeping turn-over low, intends to keep it that way.   It’s an hour drive here from his house in good LA traffic (which means never), and he’d like to see more revenue for the work. Eighteen months into this purchase the cash flow is still tight. He needs to scale up with another building but values are on fire, as far as his eye can see.

By Christopher Miller, MBA

While attending business school, I took a graduate-level class on the art of negotiation.  What I learned has saved me a lot of money over the years – whenever I buy a property, a car, or even when I hire someone to make repairs.  This article will review some of the main principals of negotiation and is a good start towards sharpening your own skills.

The Goal of a Negotiation

First – the goal of any negotiation should be to keep both the buyer and the seller happy.  As a buyer, you may wonder “What do I care if the seller is happy?”  Well, if you’re having carpet installed and the seller isn’t happy with the deal he made, he’ll probably do a lousy job for you.  It’s pretty much impossible to buy something for an amount that doesn’t make financial sense to the buyer.  It has been my experience that sellers are more open to a good-faith negotiation if they know that I am willing to let them make a living.  (Not a fortune – a living.)

by Florentina Sarac

Today’s demographics look substantially different than they did only a decade ago due to America’s older population growing significantly and at a very fast pace. According to Census data, the U.S. is a rapidly aging country, with more than 22% of the current population being aged 60 & over.

The overall aging of the population is not just the result of the economic hardship following the 2007 Great Recession, reflected in declining birth rates, but also the result of the Baby Boom cohort, America’s largest living adult generation, passing age 53 in 2017.

Our research shows that as the 60+ cohort grew bigger and faster, it also helped push the national median age from 36.7 in 2007 to 38.1 in 2017, the highest it’s ever been.

By Jessica Guerin

When it comes to the health of the economy, the housing market is the canary in the coal mine, providing clear and early clues of pending trouble. And that’s why analysts track its performance intently, looking at a multitude of indicators that might signal the looming recession some are forecasting.

Now, one critical clue from the housing market has emerged to suggest economic growth is likely to backslide, and that is a steady decline in single-family authorizations.

In essence: Construction activity appears to be slowing.

By Daniel M. Yukelson, Executive Director

You have heard it before, but it is worth repeating: There is no denying it, we have a housing crisis here in the Golden State of California.

Since the 1970’s, California has been experiencing an ever-increasing housing shortage, and by 2018, California had the 49th lowest ratio of housing units per resident.  Our current housing shortage has been estimated at 3 to 4 million housing units, or roughly 20% to 30% of California’s current housing stock.  The cause of this shortage is the imbalance between supply and demand resulting from strong economic growth that has led to the creation of hundreds of thousands of new jobs, and that in turn has led to increased housing demand.  However, while the economic “boom” continues, we have failed to construct enough new housing units to meet the demand.  To give you an idea of how bad the shortage is, for California as a whole, from 2011 to 2016, our state added only one new housing unit for every five new residents.

Some of California’s failure to keep up supply with growing housing demand lies in failed housing policies and over-regulation.  Laws such as rent control, the California Environmental Quality Act (C.E.Q.A.), zoning laws and others have discouraged or slowed down developers from constructing new housing units.  Local jurisdictions and “not in my backyard” (a/k/a, NIMBY) residents have slowed down or stopped entirely construction of new housing units in many areas.  The truth is that California does not currently have enough quantities of land that is zoned for housing to meet future demand.  Something has got to give!

Two Studies, Multiple Housing Proposals

This past year, two studies were published that attempt to solve the California Housing Crisis by offering a variety of solutions meant to thwart homelessness, provide more housing units particularly affordable housing, and to help stabilize the population of California renters.  These studies are “Finding Common Ground on Rent Control” published by the Termer Center for Innovative Housing at the University of California at Berkeley (May 2018) and the “CASA Compact” published by The Committee to House the Bay Area (January 2019). 

Why should you care?  Well, we believe that many of the elements contained in these studies may shape the 2019 and 2020 State legislative agendas on housing policy and may result in the proposal and passage of numerous State housing bills and local housing ordinances.  It is imperative that housing providers become familiar with the studies and become part of the inevitable debate that is certain to take place as our elected officials search for ideas to address the California housing crisis.

Terner Center for Housing Innovation: Finding Common Ground on Rent Control

The introduction to the Terner Center study starts out by citing grim details on our current housing crisis:

“California is in the throes of a serious housing crisis, with rising rents and displacement pressures touching a growing number of individuals and families throughout the state…more than half of California renter households (three million) are ‘rent-burdened,’ paying more than 30 percent of their income on housing.  Of those, 1.5 million pay more than 50 percent…Punctuating these sobering statistics are the seemingly endless daily anecdotes of families receiving exorbitant rent increases and being forced to choose between their homes and their other daily needs.”

The study cites a need for State and local policymakers to act to provide immediate rent relief.  The study then discusses the need to increase housing supply.  As a result, the Terner Center study makes two global recommendations to be adopted by California:

• “Broad anti-gouging” rent control to be applied to units State wide, that would make it illegal to raise rents above a maximum threshold; and
• Developer incentives to construct new and rehabilitate existing rental housing units that include a certain quantity of below market rent units.

While the Terner Center study acknowledges the many “drawbacks” of rent control, including providing benefits to those that do not necessarily need it, loss of rental housing units (e.g., the recent San Francisco study concluding that 15% of rental units were lost due to the implementation of rent control laws), and constraining new housing construction, it finds rent control as the only reliable “tool” to stabilize renters and keep them in place.  Accordingly, the Terner Center study proposes a Statewide “Anti-Gouging Cap” on annual rent increases equal to the regional Consumer Price Index plus 5%.  Now for those of us in already rent controlled jurisdictions, this sounds like a “dream come true,” but for those of us that are so fortunate, this represents only the beginning of the end.  The study does caveat that its proposed Statewide rent control limitation would not supersede more strict, local ordinance and that any violations of the Statewide rent control would be subject to both up to a $10,000 fine and up to one year in prison.

On the other hand, the Terner Center study attempts to throw our State’s developers a few “bones” by proposing to increase or preserve the State’s affordable housing stock through tax incentives.  Specifically, owners would receive an ad valorem property tax abatement for multifamily properties by committing to set aside a specific percentage of units at below market rate rents.  This tax incentive would be structured such that owners would be offered a 15-year (or more) tax abatement on the increased value of the sale and/or renovation of an existing multifamily property and on the new value of multifamily construction in exchange for setting aside a specified number of below market rent units.  In other words, the abatement would be equal to a dollar-for-dollar amount of the increase in property taxes resulting from any new assessed value.  The proposed eligibility for abatement is setting aside at least ten percent of units at below market rent for renters that fall into an affordability class of no more than 120% of the average median income for the area.

While the Terner Center study advocates the two previously mentioned recommendations for a Statewide rent control and developer incentives, it makes mention of two other, potential policies to expand rent control by amending the Costa-Hawkins Rental Housing Act.  As you may recall, Proposition 10 on last November’s ballot sought to repeal the protections we as property owners continue to enjoy Costa-Hawkins Rental Housing Act.  The Terner Center study, “as part of its efforts to stimulate new ideas for renter protections” suggests a “rolling inclusion” for Costa-Hawkins exemption from rent control (e.g., exempt new construction from rent control for 30 years) and allowing single family home rentals to be subject to rent control ordinances.  It is ironic that the Terner Center would place these draconian concepts under the banner of “to stimulate new ideas.”

The Committee to House the Bay Area: CASA Compact

The CASA Compact study bills itself as “A 15-year Emergency Policy Package to Confront the Housing Crisis in the San Francisco Bay Area.”  While specific to the San Francisco Bay Area, again we believe that many of the concepts cited in this study could find their way into new State housing laws and into local ordinances within other jurisdictions, including the Greater Los Angeles area.

The CASA Compact study cites several reasons the San Francisco Bay Area now finds itself in its current housing predicament starting with big business that has created jobs to developers that only build luxury housing; from local government officials who oppose new housing developments to environmental and labor interests that drive up construction costs; and of course, community groups that fear changes that new development might bring (a/k/a, the “NIMBYs”).  In making their recommendations, the sponsor of the CASA Compact, The Committee to House the Bay Area, brought together varying interest groups both involved in the cause of and the solution to the San Francisco Bay Area’s housing challenges, including business leaders, government officials, builders, non-profit executives, economists and housing and transportation experts.  Following its 18-month study, CASA Compact purports to deliver a “detailed, comprehensive and actionable” solutions to the San Francisco Bay Area’s housing crisis.

The “key” recommendations of the CASA Compact, each termed a “Compact Element,” are summarized below:

In addition to the ten elements outlined in the table above, the CASA Compact makes the following additional recommendations as “calls to action”: (1) Reestablishment of redevelopment agencies; (2) lower voter threshold for housing funding ballot measures; (3) increase incentives for cities to develop housing vs. commercial development, e.g.,  so-called “Fiscalization of Land Use;” (4) address homelessness through intervention policies that provide relief and housing; and (5) grow and stabilize the State’s construction labor force.

Implementation of the recommendations contained in the Terner Center study or of the CASA Compacts elements will take time and require many new State legislation and local ordinances be passed, and will take incredible leadership by our new governor, Gavin Newsom.  There is no telling which of the recommendations or elements, or derivatives of them, will resonate with our State legislature or other elected officials to be carried forward.  Some aspects suggested in the two studies are things we, as property owners, can live with and continue to be successful.  Other aspects will be very challenging for our industry.

As Charles Dickens book and namesake for this article, “A Tale of Two Cities,” goes:

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

I think so much of Charles Dickens’ sentiments ring true for California’s housing crisis, and for property owners and renters alike.  Stay tuned!

Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA).  As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and had served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies.  Prior to joining AAGLA, Yukelson served for 12 years as Chief Financial Officer for both Premiere Radio Networks, now a subsidiary of I-Heart Media, and 3 years for Oasis West Realty, the owner of the Beverly Hilton and Waldorf Astoria Beverly Hills where he was involved with the development and construction of the Waldorf.