Author Archive

Solving the Homeless Crisis Should Be a Public-Private Partnership

Written by Landlord Property Management Magazine on . Posted in Blog

By Roderick Wright, California State Senator (Retired)

We can all agree homelessness or being unhoused is a social, economic and health problem.  The breakdown occurs when we try to solve the problem.  Nothing, particularly homelessness, is an easy issue to tackle, and if it were, it would have already been solved. 

Let us also all agree, people sleeping on the street is unhealthy, unsightly, and inhumane.  So now how do we solve this crisis?  U.S. District Judge David O. Carter ordered the City of Los Angeles to do something about the homelessness situation faced by the City following a lawsuit brought by the Los Angeles Alliance for Human Rights. In Los Angeles County and most others, the Public Guardian is responsible for people unable to care for themselves, and this obligates our government to act.  However, many of the homeless on our streets and in temporary shelters today have not attempted to obtain assistance. 

Opportunity Zones – A 1031 Exchange Alternative?

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By Christopher Miller, MBA

As a tax-advantaged investment and 1031 Exchange expert, I was intrigued when I first heard of Opportunity Zones.  This is a program created by the federal government that is designed to encourage investing in certain areas of the country.  It was initially described to me as a “1031 Exchange Alternative.”  After much research, I concluded that; while it does work to somewhat ease the pain of capital gains taxes, the Opportunity Zone is a poor alternative to a 1031 Exchange.  This month, I will talk about why.

What Opportunity Zones Are

Opportunity Zones were created to offer tax incentives that would encourage investment in certain areas of the country.  Based on that description, one would expect eligible properties to be unattractive; flooded areas of New Orleans, the former Packard factory in Detroit that has been vacant for 60 years, etc.   It turns out that this is far from the truth.  Opportunity Zones were created by elected officials, so every politician in the country had their hand out to create zones in “their” neighborhoods.  The state of California alone has 879 Opportunity Zones and include areas in Beverly Hills and along Fraternity Row at the University of Southern California.

So; if I invest in an Opportunity Zone, I’m not stuck investing somewhere that I need to wait 10 years for growth?  I can invest somewhere with the potential to grow now?  I was interested.  What are the tax benefits?

San Francisco Cannot Foist the Pandemic’s Economic Burden Onto Landlords

Written by Landlord Property Management Magazine on . Posted in Blog

By Oliver J. Dunford, Pacific Legal Foundation

In response to the COVID-19 pandemic, governments across the country have tried to limit the economic damage caused by the unprecedented lockdowns. That is certainly a worthy goal. But far too often, rather than providing assistance across the board — which might require unpopular tax hikes on everyone — governments stick only some people with the bill.

San Francisco, for example, recently adopted an ordinance that prohibits landlords from evicting certain business tenants that cannot pay rent because of COVID-related impacts. The ordinance allows these tenants, upon a showing of financial hardship, to stop paying rent immediately and grants them a forbearance period to repay, during which time landlords cannot recover possession of their property. Businesses with less than 10 full-time employees are even permitted to cancel their leases altogether and avoid early-termination fees, regardless of what their leases say. The ordinance provides one meager sop to smaller landlords (those that own less than 25,000 square feet of rental space), who may proceed with eviction against non-paying tenants, but only if the landlords can prove that the inability to evict would cause them a “significant” financial hardship.

Where Are We Headed

Written by Landlord Property Management Magazine on . Posted in Blog

My father was a Protestant minister. In our services we had a segment for testimonies. This was an opportunity for people to stand and discuss anything regarding their walk of faith.

My dad told the story of a woman who once said during her testimony, “Brother Wellman, sometimes I think…-well…and then again I don’t know”.

I think we can all relate today to her ambivalence as we ponder where we are headed. I see us heading into 4 concurrent eras.

Emergency Era

We are nearing the one-year anniversary of Covid-19 emergency declarations under which government at all levels assumed unfettered authoritarian control over virtually every aspects of our lives.

What is remarkable is how quickly and comprehensively this occurred amid only isolated pockets of resistance. Apartment owners’ rights, about which I will discuss more later, were a notable casualty.

What is most troubling is the addictive nature of emergency control. Government leaders love power and once in possession of it rarely surrender it willingly. So we can expect, not a reduction of emergency rules, but a continual extension of declared emergencies.

The Covid-19 emergency can be succeeded or be accompanied by  a housing emergency, a climate change emergency, or other emergency de jure as needed to perpetuate the need for government control.

Shock and Anger Over the L.A. City Waste Haulers’ 6.15% Increase

Written by Landlord Property Management Magazine on . Posted in Blog

By Albert Mass

I was shocked and angered that the City of Los Angeles’ City Council has allowed the City’s waste haulers to increase trash removal fees by 6.15% effective in January while rent increases are frozen, late fees and interest are banned, and evictions are prohibited.  Because I am unable to increase rent at my building (let alone collect it from tenants now living for free under the disguise of a COVID impact) during this global pandemic, the City should require its monopolistic waste haulers to freeze prices.  This is especially so, and the City should take responsibility, because is was the City that established its anti-competitive monopoly arrangement known as “RecycLA” that set and imposes upon me and thousands of other property owners ever-increasing waste hauling fees.  It was the City that has negotiated the waste hauling rates and that has chosen my waste hauler, not me.

All this started back in 2017 when property owners were shocked and dismayed by the huge fee increases rolled out along with horrible service levels so that the City could extort a $25 million to $35 million franchise fee from property owners based upon a “10% take” of the waste haulers’ gross receipts.  Gone were 100’s of waste haulers competing for our business leaving us with just 7 each granted exclusive rights to service designated territories within the City.  For the City, there’s no skin of its back – the more property owners pay, the more the City earns.  But there is no doubt about it.  A 10% franchise fee is no more than a tax on property owners.

How Has COVID‑19 Affected Renters and Homeowners?

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Report Prepared by the Legislative Analyst’s Office, the California Legislature’s Nonpartisan Fiscal and Policy Advisor

Summary.  In this report, we look at how coronavirus disease 2019 (COVID‑19) has affected renters and homeowners and how state and federal policies have helped to stabilize household finances for both groups. We find that the unprecedented actions of the state and federal governments to boost incomes and provide rental and mortgage relief have helped many households who otherwise would have faced an eviction or foreclosure avoid these destabilizing events.

Despite these actions, many households continue to struggle financially because of COVID‑19. Low‑wage workers were in a precarious financial position before the pandemic and tend to work in industries that were most affected by the pandemic. These workers are likely to rent, rather than own, their home. As a result, there has been significant interest in how the pandemic has affected renters, especially how much rental debt has accumulated in California due to COVID‑19. To help answer this question, we collaborated with researchers from the Federal Reserve Bank of Philadelphia to update their recent national assessment of rental debt to reflect economic conditions and policies more accurately in California. In this report, we present the findings of our collaboration.

Loss of Privacy

Written by Landlord Property Management Magazine on . Posted in Blog

by Elaine Simpson

Privacy, in its simplest definition, is the state or condition of being free from being observed or disturbed by others.  Information privacy is the right to have some control over how your personal information is collected and used. Human beings value their privacy.  Expanding digital resources and advanced electronic technology are being used to create “zero- touch” rental environments.   Does this threaten the privacy of our residents?

Technology has its advantages, but it also has a lot of social and ethical implications that cause concern and privacy is one of them.  Electronic surveillance, availability of personal information through internet technology and workplace/home environment monitoring are just a few areas that add to the concern.

Why Do We So Readily ‘Kid Glove’ Those Who Don’t Pay Their Rent?

Written by Landlord Property Management Magazine on . Posted in Blog

By Walter Block, Professor of Economics, Loyola University New Orleans

The Centers for Disease Control and Prevention, operating under the U.S. Department of Health and Human Services, has effectively ended all evictions from residential rental units until the end of 2020.

It is interesting to note how very different the law treats food and clothing, on the one hand, from shelter, on the other. If someone breaks into a Walmart, grabs a cake and some shoes, and tries to leave without paying, the repercussions are clear: that person is a shoplifter, and will be treated harshly not only by the forces of law and order, but will also lose out in the court of public opinion (I abstract here from when the person is a looter; then all bets are off, amazingly).

Transferring Generational Family Wealth: Leveraging Delaware Statutory Trusts (DSTs)

Written by Landlord Property Management Magazine on . Posted in Blog

By Jason Salmon, Senior Vice President, Kay Properties & Investments, LLC

Real estate has long been a popular asset used to build generational family wealth. One of the key tax advantages to passing real estate property to heirs is that those recipients benefit from a “step-up in basis.” That step-up is much like hitting the reset button on a property’s current market value.  This step-up in value alone can represent a huge windfall for anyone who inherits a property that has seen even modest appreciation.

Consider a matriarch who bought an apartment building in the 1980s for $1.0 million. Thanks to careful maintenance and upkeep, along with a good location, that property is now worth $10 million. If the owner were to sell the property, he or she would face a hefty tax liability on the capital gain upon sale. Instead, the owner decides to put that property in his or her will to be inherited equally by his or her grandchildren. The grandchildren also inherit that step-up to the current appraised value at the time of the owner’s death, allowing them to avoid paying tax on capital gain should the property then be sold.

Landlord / Tenant Law “Q&A” With Kimball, Tirey & St. John

Written by Landlord Property Management Magazine on . Posted in Blog

By Ted Kimball, Esq., Partner, Kimball, Tirey & St. John LLP

·      Question?  In our lease agreements we require our tenants to pay their rent on the first of the month.  If the first falls on a holiday, such as Labor Day, do you have to give the tenant’s until midnight on the second to pay the rent or can you still enforce the late fee as of midnight on the first?

Answer.  Rent is not delinquent unless one business day has expired from the date the rent is due.  S,o if the first is a weekend or holiday, the rent is not late until after one business day has expired.