Leasing Whiplash! Techniques for a Strengthening Market

Written by Landlord Property Management Magazine on . Posted in Blog

Amid rising rents and tightening occupancy, operators see a hybrid future.

By Les Shaver, for the National Apartment Association

On a national level at least, the numbers say the apartment market took off over the summer. Just look at the July figures from RealPage: During the month, rents grew 8.3% year-over-year across the country—the most significant jump since the booming 2000-2001 era. At the same time, occupancy tightened to 96.9%—also the highest seen since the 2000-2001 era.

While performance in individual markets and product types varies, national fundamentals are predicted to remain robust in 2022 and even 2023. RealPage projects 15 markets to post rent growth of more than 10% during the next two years, and many other markets should see rent increases in the high single digits. 

Desperately Seeking Certainty: Considerations for Office Landlords and Tenants

Written by Landlord Property Management Magazine on . Posted in Blog

By Linda Koffman, Michael Manzi, and James Porter – Smith Gambrell Russell

(Editor’s Note: While the topic of the office market is a bit out of our “wheelhouse” here at our apartment association and may not fully align with our typical content on multifamily residential properties, many of our members currently own or are interested in investing in various types of commercial properties, including office buildings.  Whether you own or are interested in investing in an office building, or not, you will surely find this article of interest. Where the demand for office space goes, so goes the demand for residential rental properties to live in.)

When it comes to business, much time and money is devoted to limiting uncertainty, and this may be especially true in the real estate business.  Justice Oliver Wendell Holmes said, “The longing for certainty … is in every human mind.  But certainty is generally illusion.”  And so, it was for office owners and tenants as the impact of COVID-19 began to take effect in March 2020. 

New Study on Millennials and Housing Takes on Intergenerational Conflict Over Home Ownership

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Millennials Blame Boomers and Older Generations for Affordability, Access Issues

Just as the younger generation of home buyers is reaching the point in their lives when they want to buy a starter home, they are entering a market where, simultaneously, Baby Boomers are deciding to downsize, putting a strain on available housing stock. With longer life expectancies and better overall health than any generation in history, Boomers are not quite ready to give up on private home ownership—and with the horror stories about retirement homes and care facilities during the pandemic, this attitude becomes understandable.  One survey respondent noted: “[Baby] Boomers need to stop buying starter homes as their retirement homes. It’s driving the cost up to where first-time home buyers can’t afford it.”

To further exasperate the problem for millennials trying to buy a home in this under-supplied market is that Baby Boomers are not their only competition. Baby Boomers are just the tip of the iceberg.  While millennials pin the blame on the older generations, a far less visible factor is the contingent of well financed institutional buyers who have collectively taken a lot of stock off the market. Private Equity investors and buyers have, in fact, contributed to the shortage of housing by doing what businesses in free market economies do best: identifying rising assets and acquiring them in bulk.

How Minimum Wage and Rent Control Laws Fail the ‘Bronowski Test’

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Public policies often mistakenly treat people that are unlike in crucial ways as if they are alike.

By Gary M. Galles, Professor, Pepperdine University

In The Common Sense of Science, the Polish-British mathematician Jacob Bronowski wrote that, “at the basis of human thought lies the judgment of what is like and what is unlike.”  Unfortunately, public policies often mistakenly treat people that are unlike in crucial ways as if they are alike, or those who are alike in crucial ways as if they were unlike.

Housing policy illustrates this point well. In discussions of rent control, attention focuses on how it will treat tenants, but fails to make the critical distinction between present tenants and future tenants, who will be very differently affected. It would provide a massive windfall for current tenants at the expense of landlords, forcing or keeping rents far below market value, with tenancy protections guaranteeing the windfall into the future.

Los Angeles Mayor Eric Garcetti called it “like winning the lottery.” But it would harm the far larger group of people who seek rental housing after rent control is imposed. The slowed growth or shrinkage in the quantity and quality of the housing stock over time that results will increasingly lead to “no vacancy” signs rather than available or affordable units.

New Year resolutions for landlords and property managers

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Source: Bornstein.law

2021 has been a tumultuous year for rental housing providers. Let’s hope that everyone stays safe, our community recoups a mountain of rent debt, and that the new Omicron variant does not prompt lawmakers from instituting more regulations.

In an annual tradition and drawing from what we learned the past year, here is what made our top ten list of resolutions for landlords and property managers to focus on.

I will create or fine-tune a tenant ledger that clearly notes when the rent became due, what the tenant paid, and document any communication about unpaid rent amounts. 

When we ask our clients what is owed to them in terms of rent and other fees and dates on which rents became due, we are amazed that many of them do not have that accounting at their fingertips. We need this information in order to file an unlawful detainer (eviction action) and categorize rent owed during key dates. 

If an application for rental assistance is denied and you are compelled to go to civil courts to recoup rent debt, a tidy accounting will also prove to be essential. Please get your financial house in order. 

Towing Should be Used Sparingly in Recognition of Laws

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Space is a scarce and prized commodity in the Bay Area so it is no wonder why parking has become a vexing issue for drivers, landlords, and tenants.

Physically removing a vehicle can fix an immediate problem, but it can invite acrimony later on.

Source: Bornstein.law

With so much clamor over parking spaces, rental property owners and their agents are faced with a decision on when or when not to tow unrecognized or improperly parked vehicles. As in most landlord-tenant matters, the question we ask is what is reasonable and what concessions can be made?

We were intrigued to come across this article that reported that the Alameda District Attorney has filed charges against a towing company for predatory and unauthorized towing, among other allegations of systematic fraud, largely concentrated in one apartment complex. Granted, it is an egregious example, but it does raise important questions. Under what circumstances can rental housing providers tow vehicles, and should they tow vehicles just because they could?

Private tow truck drivers and their employers clearly get paid for towing cars, and so there is a built-in financial incentive to haul out as many as possible, but state law gives the final say to landlords, property managers, or onsite security.

San Francisco looks to give problematic tenants more time to pay rent or turn over a new leaf

Written by Landlord Property Management Magazine on . Posted in Blog

Source: Bornstein.law

A proposed ordinance would require landlords pursuing certain types of evictions to first provide their tenants written notice and an opportunity to cure, unless the eviction is based on an imminent health or safety issue. 

Throughout most of our legal careers, Bornstein Law has been able to serve 3-day notices demanding rent or that a tenant cease certain behaviors. If rent remained unpaid after three days, or if the underlying behavior continued, an unlawful detainer (eviction) action would then be filed. This was a rather perfunctory process.  

For lawmakers in some locales, three days is not long enough to make a formal demand to quit the underlying transgression. Landlords have to first make a written warning to show that they are serious before the saber-rattling of an official notice.

San Francisco may soon join the company of forgiving cities like Oakland and Berkeley by giving more latitude to tenants who are not paying rent or wreaking havoc in and around a rental unit.

Under a proposed ordinance designed to modify the Administrative Code, tenants in San Francisco would have a 10-day period to rectify certain conduct unless there is an imminent threat to health and safety.

Smoking in Multifamily Housing: Tobacco, Marijuana, or E-Cigs – They All Stink!

Written by Landlord Property Management Magazine on . Posted in Blog

By Daniel Yukelson, Executive Director

I thought I would address the subject of smoking from the perspective of a rental housing provider.  No offense!  If you are a smoker and enjoy it, more power to you.  Merely keep your smoking self away from our properties…as in way far away.

The “bottom line” on smoking from the perspective of rental housing providers is we just don’t want smoking anywhere in or at our rental properties because of the damage it causes to our rental units, the increased turnover costs, and also because of the many complaints we will surely get from non-smoking renters, particularly renters that have young children or health issues making them extra sensitive to second-hand smoke.  Face it, we don’t want the “stink” around bothering other people and harming our otherwise healthy and quiet existence. 

However, at the same time we do not want smoking at our rental properties, there are those rental housing providers that are sometimes reluctant about no-smoking policies being imposed because of concerns about being responsible for enforcement.  I get that.

Delaware Statutory Trusts & Investing Across Real Estate Market Cycles

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

Key Takeaways:

  • What are the Four Stages of a Real Estate Cycle?
  • What are some Current Macro Real Estate Trends Impacting Investment Real Estate?
  • Why Should Delaware Statutory Trust Investors Be Aware of Current Real Estate Trends?

One of the common topics that frequently pops up in investment conversations these days involves questions about what stage of the “real estate cycle” is the market currently in, and how does the current real estate market cycle impact the world of Delaware Statutory Trust 1031 exchanges? 

The first caveat that must be iterated here is that nobody can predict the future of any market, and there are always material risks associated with investing in real estate, which investors should carefully consider with their own tax and legal advisors. However, by taking a closer look at typical real estate cycles and why these cycles are important to understand, investors can be better prepared for the future, and maybe recognize why more and more real estate owners are selling their properties and moving into DST 1031 exchanges.

How to Recruit Winners to Your Company

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By David Crown, Los Angeles Property Management Group

When I was a child playing little league baseball, a coach once told me, “your team is only as good as its weakest player.” That truth has stuck with me, and it can be applied to any industry, but I’ve found it especially true of property management. Great property management requires a combination of professionals with vastly different skillsets all working toward the same goal: maximizing the quality and profitability of their clients’ investments. In other words, it’s a team sport. And, just as in sports, some organizations are better than others at assembling a championship team that stays great.

For evidence of that, look no further than Los Angeles’ two baseball teams. The Dodgers were 2020 World Series champions playing for a repeat win in 2021, and they had made the playoffs for nine straight years, whereas the Angels have only made the playoffs once (2014) in that time span, and haven’t won a ring in almost 20 years. My point is that building a successful team is a skill all its own, and if you’re a property manager, it’s a skill you can’t afford to go without. In this article, I’ll lay out the best ways to improve your hiring practices and field a contender.