Move Seeks Emergency Relief From the City’s Eviction Ban and Rent Freeze Moratoria

Following the U.S. District Court’s denial of injunctive relief in the Apartment Association of Greater Los Angeles’ (AAGLA) Preliminary Injunction Motion against the City of Los Angeles, a Notice of Appeal has been filed by AAGLA in the U.S. Ninth Circuit Court of Appeals.  In addition, AAGLA is seeking to expedite  a hearing date no later than Mid-January 2021.  AAGLA had previously filed its lawsuit against the City of Los Angeles in Federal Court this past June challenging the City’s eviction ban, prohibitions on late fees and interest on unpaid rent, and moratorium on annual rent increases.

By Kerry Jackson

Did someone say that suspending the responsibilities for renters to make their payments due to the pandemic on time would create problems? Of course they did. And of course it has.

By the end of the year, Californians will owe as much as $1.7 billion in back rent, says a Federal Reserve Bank report. That’s nearly a fourth of every dollar of back rent owed rent nationwide.

That’s quite a sum, but the difficulties it creates for renters is only part of the story. What about the California property owners who are owed $1.7 billion. Will they ever get what’s rightfully theirs?

Package Theft is a Major Issue: 1 in 5 Americans Reported Being a Victim of Porch Pirates During the Pandemic 

Even with thousands of people working from home due to the pandemic, package theft is still a major issue. According to a recent survey from ValuePenguin.com by LendingTree, 1 in 5 Americans reported being a victim of porch pirates during the pandemic. This expands on previous reporting from The New York Times, which revealed that an estimated 90,000 packages disappear daily in NYC without explanation, up roughly 20 percent from four years ago. 

A quote from the article summarizes the dire situation: 

“I can’t have my medications delivered here or anything that is essential,’’ she said. “I don’t know what the solution is, but I do know that it’s getting worse.” 

How Cost Segregation Can Benefit Property Owners and Managers

By David Crown, Chief Executive Officer, Los Angeles Property Management

Class is now in session!

Today you’ll learn how cost segregation can lead to accelerated depreciation of an income property. Now, before we begin, I want to clarify that I am neither an attorney nor an accountant, so please don’t take the advice of this article without first consulting your licensed attorney and accountant. But this month’s article is as much about investment as it is about property management, because at I believe understanding investment strategies can help managers see the income properties they manage from an owner’s perspective, and offering this benefit to clients can set managers apart in the field. While some of the terminology may sound complicated, the end result of this combination is simple: it’ll save rental property owners money.

I can remember a time when I was fully ready to send a check to the IRS for an $80,000 tax payment on a property I owned. I had already stamped the envelope when I received a last-minute call from a colleague advising me to look into cost segregation. With one call to my accountant, I saved all that money. Consider this your last-minute call.

Rent Control – A Cautionary Tale of the City of Santa Monica

By Dean Sherry, President, Duke Property Management

Introduction and Update.  As I look back at this article that I wrote approximately  two-years ago about rent control, the same sad story is only getting worse for the mid-market “mom and pop” small owners.  However, one thing is strikingly different. Thanks to COVID-19, there is a natural market correction happening that, for some reason, state legislators are over-looking.

In my “little” world of property management, notices to vacate have just shot up and more units are becoming available which is driving down the price of rentals. Most of these renters who are abandoning their apartments are millennials who either are moving back with their parents, moving into smaller apartments or roommate situations, or are moving out the “big” City. 

The City of Los Angeles Wants YOUR Participation in the Emergency Renter Assistance Subsidy Program

The City of Los Angeles put into place an Emergency Renter Assistance Subsidy (ERAS) program that will directly pay landlords on behalf of their qualified tenants up to $2,000 per month.  Recently, the Los Angeles City Council modified the payment aspect of the program to pay the rental subsidy directly to the tenant IN THE EVENT their landlords opt-out or fail to timely reply to program notifications. 

The City of Los Angeles reports there are landlords that have not responded and have been in “pending” status since as far back as August 2020.  In these instances where a landlord is “pending,” the City of Los Angeles has now been authorized to begin remitting the rental subsidies directly to qualified tenants instead of directly to landlords.  The City suggests that any landlords that have been notified that their tenant has been approved for the program and that they are eligible, should complete the enrollment process as soon as possible. Any landlords that have questions may contact the City of Los Angeles via email at: hcidla.eras@lacity.org. 

Succession Planning For The Independent Rental Owner (IRO): Are You Ready?

Succession planning can be one of the most difficult, yet most important, actions you take as an independent rental owner (IRO). Simply put, succession planning is the act of determining what will happen to your business and wealth after you retire or unexpectedly pass away. It’s not something you want to put off until the last minute — but most people do.

In fact, according to the Business Enterprise Institute, 81% of business owners plan to leave their business in less than 10 years, but only 20% have an exit plan in writing. We should mention: a succession plan doesn’t count unless you get it down in writing. 

In Effort to Drive NOI, Operators Look to Technology

By Paul Bergeron

In the past year, the multifamily industry has turned to technology to overcome the unique obstacles brought on by COVID-19. Many owners and managers had intended to gradually transition into some of these solutions that enhanced efficiency, but then practically overnight, they found themselves having to pivot when nationwide shutdowns were put in place in March.

Pre-COVID-19, many felt they were making great strides toward finding new and better ways to operate their properties. So, they weren’t afraid to dive in headfirst when it came to changing how they operate their offices, conduct tours, or communicate with their teams and residents. We reached out to several real estate executives to find out how they have adapted their operations during the pandemic and how they are using technology to drive net operating income (NOI). Here are are the main takeaways from our conversations:

Package Theft is a Major Problem: 1 in 5 Americans Have Reported Being a Victim of Porch Pirates During the Pandemic

Even with thousands of people working from home due to the pandemic, package theft is still a major problem.  According to a recent survey from ValuePenguin.com by LendingTree, 1 in 5 Americans reported being a victim of porch pirates during the pandemic.  This expands on previous reporting from The New York Times, which revealed that an estimated 90,000 packages disappear daily in New York City without explanation, which is up roughly 20 percent from four years ago.

A quote from the New York Times article summarizes the dire situation: “I can’t have my medications delivered here or anything that is essential,’’ she said. “I don’t know what the solution is, but I do know that it’s getting worse.”

Institutional Residential Lease Guarantees Come to California

Institutional residential lease guarantees are new to the California apartment market and, consequently, are not well known or understood. They represent an attractive opportunity for landlords to reduce vacancies, drive renters to their properties, and eliminate all rent loss, at no cost to landlords or their management companies.  Landlords accept the program, renters pay for it.

Developed over twelve years ago by New York based Insurent Agency Corporation, residential lease guarantees are the institutional “mommy and daddy” assisting a broad range of renters in qualifying for their chosen apartment. Young professionals moving to New York (or other major cities) typically do not have incomes sufficient to meet landlords’ credit criteria, generally requiring annual earnings of at least forty times the monthly rent. Alternatively, prospective tenants can use a co-signer (normally parents) with minimum annual incomes at least eighty times the monthly rent.  With rents often very high in major cities like New York, many parents do not qualify.  Other renters experiencing problems include (i) foreign executives relocating to the U.S. who have no U.S. credit history, (ii) the self-employed, (iii) non-employed U.S. and foreign individuals with significant assets, and (iv) both U.S. and international students.