Rental Housing Magazine: Jan/Feb 2024

rental

Housing EAST BAY RENTAL HOUSING ASSOCIATION | JANUARY/FEBRUARY 2024 | $9.95

Tips to Sell

LEGACY PROPERTIES

Solving California’s

HOUSING SHORTAGE

2024 Forecast

FORGING AHEAD TO BRIGHTER DAYS

SERVING ALAMEDA AND CONTRA COSTA COUNTIES

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Contents JA N UA R Y/ FEB R UA R Y 2 0 24

28 HOPE FOR A

BRIGHTER FUTURE

As we conclude one of the most turbulent years since the 2008 crisis, several signs suggest we are in the early innings with more pain to come.

34 RENTAL HOUSING NEVER LOOKED SO GOOD

Interior and exterior design trends provide a sneak peek of what the cities are going to look like in the future.

2 JANUARY+FEBRUARY 2024 / EBRHA.COM

COVER: REPOSITORY-IMAGES/ADOBESTOCK. MINH-PHA/UNSPLASH

Features

EAST BAY RENTAL HOUSING ASSOCIATION Volume XXXV Number 28 | Jan/Feb 2024 EBRHA OFFICE

3664 Grand Ave., Suite B, Oakland, CA 94610 TEL 510.893.9873 | FAX 510.893.2906 ebrha.com CHIEF EXECUTIVE OFFICER

Derek Barnes aemail@ebrha.com | 510.893.9873 ext. 407 COMMUNICATIONS AND MEDIA RELATIONS

Chris Tipton communications@ebrha.com | 510.893.9873 ext. 404 ADVERTISING AND MEMBERSHIP SALES

Danielle Baxter sales@ebrha.com | 510.893.9873 ext. 403 MEMBER SERVICES AND SUPPORT

membership@ebrha.com | 510.893.9873 ext. 414 FACILITIES AND EVENT SCHEDULING

Shani Brown shani@ebrha.com | 510.893.9873 ext. 406 BILLING AND ACCOUNTING

Ken Lam accounting@ebrha.com | 510.893.9873 ext. 405 EBRHA OFFICERS PRESIDENT Wayne C. Rowland FIRST VICE PRESIDENT Luke Blacklidge TREASURER Chris Moore SECRETARY Fred Morse EBRHA BOARD OF DIRECTORS

Francisco Acosta, Luke Blacklidge, Maya Clark, Carmen Madden, Chris Moore, Courtney Morse, Fred Morse, Deeana Owens Joshua Polston, Wayne C. Rowland, Jack Schwartz, Maria Recht, Aaron Young PUBLISHED BY

East Bay Rental Housing Association PUBLISHER Derek Barnes EDITOR Michelle Gamble ART DIRECTOR Bree Montanarello

STAY CONNECTED WITH EBRHA Call: 510.893.9873 Membership Questions: membership@ebrha.com Visit: ebrha.com Share Your Feedback: editor@ebrha.com Advertise: sales@ebrha.com Read: issuu.com/rentalhousing Learn: ebrha.com/faq Ask: ebrha.com/submit-your-questions Participate: web.ebrha.com/events GET SOCIAL @ebrha_rentrospect facebook.com/EastBayRentalHousingAssociation @EastBayRHA

Rental Housing (ISSN 1930-2002-Periodicals Postage Paid at Oakland, California. POSTMASTER: Send address changes to RENTAL HOUSING, 3664 Grand Ave., Suite B, Oakland, CA 94610.

Rental Housing is published bimonthly for $9.95 per issue by the East Bay Rental Housing Association (EBRHA), 3664 Grand Ave., Suite B, Oakland, CA 94610.

Rental Housing 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 Rental Housing are those of the author and do not necessarily reflect the viewpoint of EBRHA or Rental Housing. 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 EBRHA, express or implied, of the advertiser or any goods or services offered. Published bimonthly, Rental Housing is distributed to the entire membership of EBRHA. The contents of this magazine may not be reproduced without permission. Publisher disclaims any liability for published articles. Printed by Bay Central Printing Company. ©2024 by EBRHA. All rights reserved.

JANUARY+FEBRUARY 2024 / EBRHA.COM 3

Contents JA N UA R Y/ FEB R UA R Y 2 0 24

Departments 6 8 9

WELCOME Letter from the CEO, Derek Barnes CALENDAR EBRHA Events and Other Happenings OUT & ABOUT 2023 Trade Expo at the Claremont Hotel & Legal Fundraiser Events

10 SPOTLIGHT

Member spotlight on Joseph Knaack

12 LEGISLATION

Who bears the burden for a right to housing?

16 EDUCATE

If you plan to sell your multi-unit property, here are important steps to take.

18 In the property management industry, tech tools make work easier.

20 INFORM

How do we solve California’s housing shortage?

22 When it comes to property management, some managers are better than others.

24 CONNECT

California’s natural disasters made buying property insurance difficult.

26 INSPIRE

38 INDUSTRY PARTNERS EBRHA DIRECTORY

42 LAST LOOK

Hoarding has caused significant problems.

43 AD INDEX 4 JANUARY+FEBRUARY 2024 / EBRHA.COM

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Property owners need to know the rules about historical buildings.

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Welcome A LE T TER FROM EBRHA CEO DEREK BARNES

W

elcome to a new year and our latest issue of Rental Housing, where we delve into the ever-evolving rental market in Alameda and Contra Costa counties. In this issue, we will explore updates and trends shaping the industry, the key legislation and policies that will impact housing providers in 2024, recommendations to minimize business risks, and an appeal to stay engaged in our continued advocacy for better housing policy.

The East Bay rental housing market has experienced significant changes in recent years. We’ve seen the end of three-year eviction moratoriums that left owners with thousands of dollars of unpaid rent, significant caps on rental rate increases, expansion of invasive rental registries, and more restrictive housing policies mainly focusing on renter protection. Rising crime rates and public safety concerns are also in the foreground and impact the rental market. All this is set against the backdrop of skyrocketing operating costs, historically high-interest rates, and unprecedented state and local government budget deficits. But what does all this mean for owners and their businesses in 2024?

Some major Bay Area cities, like Oakland, have seen an exodus of residents and businesses, while other local areas have seen a bump in population and commerce post-pandemic. With the continued population growth in the Bay Area, the demand for rental housing will continue to grow in a highly competitive housing market. In the meantime, cities with a decline in residents and businesses have seen a dip in rental demand, lower rental rates, and a decrease in overall property values/prices. Grant Chappell’s article affirms that rental property owners and managers must stay informed about the latest trends and regulations to successfully navigate this dynamic landscape.

In 2024, several pieces of housing legislation and policy, if passed, will have a profound impact on the rental housing industry. One of the key developments is the advancement of rent control measures aimed at providing renters with greater security and affordability while restricting rental owner/operator activities that address noncompliant renters: AB12 (security deposits), SB567 (no-fault evictions) and SB267 (credit reports). Housing providers must familiarize themselves with new regulations and ensure compliance to avoid legal problems and penalties. Additionally, there will be increased scrutiny of fair housing practices and renter qualify6 JANUARY+FEBRUARY 2024 / EBRHA.COM

ing standards, making it crucial for property owners to prioritize inclusivity and adhere to non-discriminatory practices.

While legislative changes can create new challenges, they also present opportunities for rental property owners to adapt and thrive. We recommend using comprehensive applicant screening practices and fraud detection services to minimize business risks. This will ensure we rent to responsible and reliable people. It’s astonishing that many small owners still do not use third-party screening tools in today’s exploitative environment. A small upfront screening investment could save owners a lot of time, money and headaches down the road. In 2023, EBRHA replaced its longstanding CIC screening service with newer, easier-to-use and more innovative applicant screening and fraud detection tools like Intellirent, Tenant Alert! and Snappt.

Additionally, housing providers should prioritize and engage in regular communication, property maintenance, and improvements to attract and retain high-quality renters.

By staying proactive and maintaining open lines of communication with renters, property owners can establish strong relationships that can benefit both parties in the long run.

EBRHA regularly receives phone calls from renters seeking support and information. Last year, we also launched a Renter Resource Directory (RRD) on our website to help residents find the resources they need – rent/utility assistance, understanding renter rights, and other social services programs. To provide in-depth renter education, EBRHA members may now direct their residents to our website to get consolidated and helpful information.

Understanding market trends is critical in the rental housing industry to stay competitive. With the rising demand for sustainable living (especially for the younger demographics), incorporating green initiatives into rental properties can be an attractive selling point for environmentally conscious renters – solar, EV charging, smart home technology, and energy efficiency best practices. Additionally, getting updates on rental rates in the area ensures your pricing remains competitive yet realistic. Conducting market research enables housing providers to make informed decisions about rent adjustments and lease renewals but can be time-consuming. EBRHA has partnered with Beekin to offer Rental Market Estimates to our members. This exclusive service for EBRHA members takes the guesswork out of pricing rental units.

In this ever-changing landscape, rental property owners

must continuously educate themselves on industry trends and best practices. Joining associations like EBRHA, attending our seminars and events (over 70 each year), and networking with other professionals in the field can provide invaluable insights and opportunities for growth. Furthermore, embracing technology and leveraging property management software can streamline operations, enhance renter communication, and improve business efficiency. EBRHA continues to curate industry partners who advance innovation in rental housing.

With constant legislative threats continuing in 2024, we understand that navigating the rental housing market can be challenging. There are efforts to repeal Costa-Hawkins state legislation, which protects owners’ rights to manage their rental business. While we successfully fought efforts to advance TOPA (Tenant Opportunity to Purchase Act) in the South Bay this year, city council members in Berkeley and Oakland are also ready to resurrect new flavors of this legislation. We must stay vigilant in our response to flawed housing policy.

With multiple candidates running for city council member, county supervisor and judge seats in 2024, it is a golden opportunity to put people in office committed to bringing different stakeholder communities together to get things done, understanding our complex housing needs, and protecting small businesses. Researching candidate positions and voting for good legislators is paramount in protecting our property rights.

The clarion call for all rental property owners is to stand up for your rights. We must organize to make our demands clear, mobilize our collective resources (dollars and people), and recognize the power we hold in transforming the dysfunction in government. No one organization or group can be responsible for making these monumental leaps alone to advance change. Whether time, money or other resources, everyone can contribute something to ensure our voices are heard. Our goal is to equip you with the knowledge and resources needed to succeed in this dynamic industry and provide all members opportunities to engage in the work we must do collectively to protect our industry. Contributions to our Legal Defense Fund and EBRHA PAC are critical in continuing to fight for property owner rights.

As always, we are here to support you on your journey as a rental housing provider, and we value your commitment to providing safe and habitable homes in Alameda and Contra Costa counties. EBRHA’s Board of Directors, volunteers and staff wish you success and good fortune in 2024!

What are you risking in providing rental housing?

Be prepared and join the community of rental housing providers at EBRHA.com NEW MEMBER PROMO

New members receive a $40 account credit when they join.

REFERRAL PROMO

Existing members refer a new member to EBRHA and receive a $50 account credit.

The leader and essential resource for the rental housing community for over 80 years. www.ebrha.com | 510.893.9873

JANUARY+FEBRUARY 2024 / EBRHA.COM 7

Calendar

F I N D T H E L AT E S T E B R H A E V E N T S & R E G I S T E R AT W E B . E B R H A . C O M / E V E N T S

*

JANUARY 1 New Year’s Day JANUARY 9 2-3:30PM Roundtable Presented by Wayne Rowland

*

JANUARY 15 Martin Luther King Jr Day JANUARY 16 5 – 6:30PM Legislative Meeting with Costa-Hawkins update JANUARY 25 5:30PM – 7:00PM New Member Open House Featuring Alameda Rent Program, Oakland RAP, Richmond Rent Program

February

*

FEBRUARY 1 National Black History Month

*

FEBRUARY 2 Groundhog Day 8 JANUARY+FEBRUARY 2024 / EBRHA.COM

FEBRUARY 13 2 – 3:30PM Roundtable Presented by Wayne Rowland

* *

FEBRUARY 14 Valentine’s Day FEBRUARY 19 Presidents' Day FEBRUARY 20 3 – 4:30PM Member Meeting FEBRUARY 22 2 – 3:30PM The Forum Presented by Dan Lieberman FEBRUARY 27 2:00PM – 3:30PM Getting the most out of your technology Presented by Intellirent

*

NON-EBRHA EVENTS

If you would like to submit an event, please send an email to editor@ebrha.com.

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January

Out & About 2 0 2 3 T R A D E E X P O AT T H E C L A R E M O N T H O T E L & O T H E R E V E N T S

Nate Miley, Alameda County Board of Supervisors, a key speaker at the Expo.

Derek Barnes and Keynote Speaker, Oscar Wei, Deputy Chief Economic for the CA Assoc.of Realtors.

(L to R) Expo Legal Panel featuring Attorney Daniel Bornstein, CA State Lobbyist Ron Kingston, Attorney Charles Alfonzo, and EBRHA Board Member Jack Schwartz.

Pamela Ferran at the Nov. 30th Legal fundraiser, hosted by Wayne Rowland.

Bay Area Bin Support at the Expo

Guests at the EBRHA Legal Fundraiser on October 12th, hosted by board Member Fred Morse.

Chris Tipton & Shani Brown (EBRHA) with Krista Gulbransen & Tiffany Van Buren (BPOA), Chris Moore (EBRHA Board Member)

Oakland Housing Authority, Expo Exhibitor

(L to R) Attorney Scott Friedman, Robert Zolly, and Dan Lieberman at the Legal Fundraiser on Nov 3oth hosted by Board President, Wayne Rowland

Cyrstal Jessup, Beth Pratt, & Kayla McKissick (Aventis Management) JANUARY+FEBRUARY 2024 / EBRHA.COM 9

Spotlight EB RH A MEMB ER SP OT L I GH T

“...I foresee property owners investing more in upgrading their current assets to enhance appeal and retain renters.”

Q: What is the rental market outlook for 2024?

JOSEPH KNAACK ADT MULTIFAMILY Joseph Knaack is a national account manager with ADT Multifamily. ADT Multifamily excels in transforming apartment living with cutting-edge Smart Home Automation technologies.

Our focus lies in enhancing the in-unit experience by integrating smart locks, thermostats, leak detection systems, contact sensors, and video doorbells. By prioritizing convenience, control and security, we are redefining residential spaces to meet the modern demands of living.

10 JANUARY+FEBRUARY 2024 / EBRHA.COM

The rental market in 2024 is expected to become more competitive due to persistently high interest rates leading to an increased number of renters.

Observations from IMN Events indicate a trend toward reinvestment in existing property portfolios rather than the expansion of new builds. As a National Account Manager for ADT Multifamily in California, I foresee property owners investing more in upgrading their current assets to enhance appeal and retain renters. This investment is likely to focus on improving amenities, offering competitive rents, increasing valuation of the asset, bolstering safety measures, and providing greater convenience and control to residents. However, there is a noticeable downturn for startups in the housing industry, potentially affecting the variety and innovation in the services offered to multifamily housing.

What is the role of ADUs in addressing the housing shortage?

Accessory Dwelling Units (ADUs) stand as a viable, immediate solution to alleviate the housing shortage on a small scale. They offer a strategic improvement by utilizing existing residential properties more efficiently.

Nevertheless, the broader resolution to the housing crisis hinges on legislative reforms that incentivize investment in new constructions, minimizing the bureaucratic barriers that currently impede development.

What is the future of rental housing design?

The future of rental housing design is likely to be renter-centric, focusing on a seamless customer journey that integrates the convenience of technology with the comforts of home. This will involve smart design that accommodates flexible living spaces, energy efficiency, and a hyper-connected environment to cater to the modern, tech-savvy renter.

Any parting words?

As we look to the future, our commitment to innovation and customer satisfaction remains steadfast. ADT Multifamily is dedicated to advancing the living experience through smart technology and strategic industry insights, ensuring that we not only meet but exceed the evolving needs of residents, clients and partners.

If you would like your business spotlighted, please contact EBRHA at editor@ebrha.com.

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JANUARY+FEBRUARY 2024 / EBRHA.COM 11

Legislation

N AV I G AT I N G T H E 2 0 24 C A L I F O R N I A R E N TA L H O U S I N G L AW S : I M PA C T S O N R E N TA L H O U S I N G P R O V I D E R S

C

alifornia has always been at the forefront of progressive rental housing legislation, seeking to protect the rights of renters while balancing the interests of rental housing providers.

However, in recent years, the state has implemented several new rental protection laws that affect rental housing. These changes bring a range of responsibilities and considerations for rental housing providers.

First, let’s start out with some numbers: 2,972. That’s the number of bills

12 JANUARY+FEBRUARY 2024 / EBRHA.COM

that were introduced just last year.

Of those bills, 186 of them pertained to rental housing. The East Bay Rental Housing Association, in concert with our state affiliate, CalRHA (California Rental Housing Association), was effective in killing or modifying several of those bills, but a handful of them were passed and signed by Governor Newsom. In this article, we’ll delve into the key elements of high-profile new state rental laws, focusing on their impact on rental housing providers.

SECURITY DEPOSITS – AB 12 The new rental laws also include changes to the regulation of security deposits. AB 12, authored by Assemblyman Haney (D-San Francisco), caps security deposits at one month’s rent, regardless of whether a unit is furnished or unfurnished. However, property owners with no more than two rental properties, each comprising no more than four units, are allowed to request up to two months’ rent as a security deposit. This law, which takes effect on July 1, 2024, aims to

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BY CHRIS TIPTON

standardize security deposit practices but hurts many renters who have no or poor credit. This is because many property owners would give these renters an opportunity to rent an apartment, but charge more than one month’s rent to mitigate the risk. Now that this will no longer be an option, many renters will be turned away rather than be given a chance.

The new law does not prohibit owners and renters from agreeing to allow the renter to pay for improvements or repairs to the existing premises.

Examples of this would allow the new renter to pay for new paint, appliances, carpeting, etc. This could encourage renters to take better care of the property and alleviate some of the owner’s financial risk. Nor does the new law bar an owner from setting the initial rent at a higher level.

NO-FAULT EVICTIONS – SB 567 The amendments to the state’s Tenant Protection Act of 2019 (AB 1482) bring significant changes to the “at-fault” and “no-fault” eviction requirements.

These changes come into play when a property owner terminates a renter’s residency because they or their family wish to move into the unit or due to substantial rehabilitation. The law mandates specific notices from rental housing providers to the renters in such cases and imposes penalties on rental property owners who fail to comply. SB 567, authored by Senator Durazo (D-Los Angeles), applies more renter protections by requiring property owners to adhere to stricter requirements when evicting renters.

The unintended consequence of this law is that it discourages property owners from making considerable

“186 bills pertaining to rental housing were introduced just last year.”

upgrades, modifications or improvements to aging properties that require renter(s) to vacate.

COSTA-HAWKINS: PERMANENT DISABILITIES – AB 1620 California is also making accommodations for renters with permanent disabilities related to mobility. The new law allows local jurisdictions with rent control ordinances to permit a renter to maintain the same rent if they request to move to a comparable or smaller unit within the same building due to mobility-related disabilities. To qualify, the renter’s move must be deemed necessary to accommodate their physical disability, the current unit must lack an operational elevator serving their floor, and the new unit

must be in the same building or on the same parcel with at least four other units sharing the same owner.

Additionally, the new unit must not require renovation to comply with health and safety requirements, and the rent control board or authority must ensure a fair rate of return for the owner. This law, as embodied in AB 1620, authored by Assemblyman Zbur (D-Los Angeles), is intended to promote accessibility and fair treatment for renters with disabilities.

The difficulty will be in the implementation. It will be difficult, for example, to determine if the “replacement” unit is comparable in location and amenity. The replacement unit may overlook a greenbelt or a swimming pool, and the other unit may overlook a parking lot.

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rental housing providers to go to court to evict individuals who falsely claim to be legal renters.

RENTER MICROMOBILITY DEVICES – SB 712 Another new law allows renters to store micromobility devices like e-bikes and e-scooters in their rental units. However, there is a catch – the batteries of these devices must meet the safety standards set by the Consumer Product Safety Commission. If the batteries do not meet these standards, property owners can require renters to have insurance for the devices and prohibit

them from plugging the devices inside the rental unit. SB 712, authored by Senator Portantino (D-Burbank), reflects California’s commitment to embracing sustainable transportation while ensuring safety. Enforcement of this law could be challenging to property owners as it would be difficult to constantly monitor these devices.

SCREENING FEE RECEIPTS – AB 1765 One of the recent legal changes in California rental housing revolves around screening fee receipts. Previously, property owners were required to hand-de-

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TRESPASS LETTERS - SB 602 Another significant change is the extension of the validity of trespass letters, commonly referred to as 602 letters, from 30 days to 12 months.

These letters allow property owners to notify local law enforcement that a property is unoccupied, enabling law enforcement to remove any trespassers who attempt to claim legal occupancy. This extension of the validity of trespass letters is governed by SB 602, authored by Senator Archuleta (D-Pico Rivera). It simplifies the process of safeguarding unoccupied properties and alleviates the need for

liver or mail these receipts. However, under the newly enacted AB 1765, housing providers and renters can now agree to use email to deliver these receipts, sending them to an email account provided by the renter. This change simplifies the process of providing screening fee receipts, making it more convenient for both parties involved.

CREDIT HISTORY – GOVERNMENTAL RENTAL SUBSIDY – SB 267 The final law we will cover pertains to credit history and its use in rental applications. SB 267, authored by Senator Eggman (D-Stockton), prohibits rental property owners from considering a person’s credit history as part of the application process, provided they have a government rental subsidy, such as Section 8. Instead, the law mandates that rental housing providers must

offer applicants the option to provide alternative evidence of a verifiable legal means to pay their portion of the rent.

This law is designed to remove potential barriers to housing for individuals who rely on government rental subsidies. Owners all too well are aware that qualifying for a Section 8 voucher is much different than showing an ability or track record of paying rent.

The new 2024 California rental housing laws definitely reflect the current California legislative push to protect the rights of renters. To that end, The East Bay Rental Housing Association and its affiliates must continue to push for a more balanced approach in the interests of renters AND rental housing providers. With California in a housing crisis, EBRHA’s position will continue to echo the need for solutions that increase production,

preserve existing affordable housing, and encourage people to become and/ or remain rental housing providers.

More restrictions only serve the opposite and push rental housing providers out of the market and reduce development. While some of these laws may pose challenges for property owners and create unintended consequences, the goal is always to promote fairness and accessibility in the rental housing market. By staying informed through the East Bay Rental Housing Association and adapting to these new regulations, rental housing providers can navigate the evolving legal landscape while continuing to provide safe, compliant and secure homes for our residents in the East Bay. Chris Tipton is the communications manager for EBRHA.

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Educate

P R E PA R I N G T O S E L L Y O U R M U LT I - U N I T P R O P E R T Y

BY JOHN M. CARONNA

f you are planning to sell or even thinking about selling your multi-unit property, these are the most important steps you need to take. The most important aspect of preparing your multi-unit for sale is to understand how and why buyers will view your property.

A) How much are the rents? How do they compare to market rents?

As buyers, we do want to see how much rent we will collect with the units at market rent.

Your property is worth an amount that is primarily based on the value of current rent. As an owner, we must realize that the square footage, number of bedrooms is a starting point. The facts are that the rents, more than anything else, are the first and most important factor in determining how much a buyer is willing to pay.

When I work with buyers, the first thing we do with any properties we are considering is look at the expenses and the rents, and then determine how much cash flow the buyer will have based on a standard down payment.

If the property under consideration falls within the buyer’s parameters, then we dig deeper and look at things such as: potential rents upon vacancies, costs to upgrade units and maintenance items that will need to be addressed within two, five and 10 years.

As an example, two similar four-unit buildings can be worth substantially different amounts even if they both have the same number of bedrooms and square footage.

If one property has all units rented

16 JANUARY+FEBRUARY 2024 / EBRHA.COM

at $2,500 per unit, and the second property has all units rented at $1,600 per unit, the difference in value could be as much as $600,000. Same building, just different income. It’s really important that the realtor you work with can advise you in ways to maximize your income, thereby maximizing your value. This can range from passing through banked rents, to update leases with the current renters, to renter buyouts.

B) Deferred maintenance: Assuming that your building is fully occupied and habitable, here is what needs to be done in the short term, and as renters move out.

Examples of deferred maintenance that you should address in preparation for sale are exterior maintenance. As you know when you have open house for vacant units, the exterior is the first thing new renters see. You want them to say, “I’d love to live here.”

The same is true when preparing to sell. You want potential buyers to say, “I’d love to own this property.”

Therefore, exterior painting and updating the landscaping are the first and foremost steps to take.

The second area of deferred maintenance to address are items that will come up in the pest report/ home inspection. The most common items are damaged or decaying exterior stairs or entry ways. Also very common is dry rot or mold damage under sinks, bathrooms or under the property. These items will be discovered upon inspections, and it’s better and more cost effective to take

control of these in advance. If we wait, the buyer has negotiation leverage and credits to ask for and that can delay the sale and reduce the price.

You need to work with with an experienced multi-unit Realtor. With the two largest cities in our counties (Oakland and Berkeley) having strict rent control, it is vitality important that the real estate agent you work with has extensive experience in multi-unit transactions. As a multiunit property owner and specialist, I learn many important variables and nuances with each transaction.

We all get unsolicited phone calls, asking if we want to sell our property.

The caller is about as informed about our exact situation as that caller who asks if we want to lower our cable or phone bill. They may have the address and the number of units, but they have no other information about your property or your situation.

It is very important to interview and work with someone who has the experience in multi-units sales and is willing to put their experience to work for you. If you own a multi-unit in one of the rent control cities in Alameda or Contra Costa counties, then updating units upon turnover can greatly increase your property’s value. It is vitally important to keep up with basic maintenance, but updating with amenities that attract great renters is very important when you have a vacancy.

Some of the basics are updating the kitchen and bathrooms. I have found through firsthand experience that

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I

“...most of the variables that determine the value of our multi-unit is based on our rents.”

renters love new kitchen appliances (especially in stainless steel) and new shower enclosures.

If you have an older building with carpet throughout, make sure to check under the carpet. Many older buildings have beautiful vintage hardwood underneath. It is relatively inexpensive to tear out the carpet and refinish the hardwood. There are two advantages to this approach.

First, renters love hardwood floors.

It really makes the unit seem bigger and brighter. And as a property owner, there is virtually no maintenance.

With carpet, there is “wear and tear” and the carpet will need to be cleaned with each renter turnover. After a few years, it will need to be replaced.

With hardwood, it holds up so well. Any damage or stains are renter responsibilities.

Another renter amenity that can also increase your rent is replacing the older electric stove with a gas stove.

The vast majority of renters (and most of us) prefer gas over electric. It can be relatively easy and inexpensive to run the gas line to the new stove.

I have found that with hardwood floors and a gas stove versus carpet and an electric stove, I can usually get $200-$300 more per month.

This added income can add $45,000$50,000 per unit to your building.

Anything we can do to add to the charm of our building and also give renters the modern conveniences with technology will add to our rents and increase the value of our property.

The most important method to increase the value of your property is to spend time and achieve the highest possible rent upon renter turnover.

I strongly suggest touring a few open

houses of similar units in your area. If your property is subject to rent control, it is the most important aspect of increasing your property’s value.

Assuming what the rent should be without thoroughly searching Craigslist or other rental sites and actually visits a few open units can lead to owners to underprice the vacancy. As I noted earlier, most of the variables that determine the value of our multi-unit is based on our rents.

Lastly, when we do decide to sell, how should we inform our renters? This can be a sensitive subject as some renters will not be happy to hear this news.

The reality is that we will need to tour and inspect their units, and we will need them to fill out a renter estoppel. Therefore, in order to make the process as smooth as possible, letting them know before we start

having appointments at the building is probably the best method.

I have found that occasionally when renters hear this news, they decide that now is the right time to move out.

As we know, that is almost always a good thing – we can now show the unit vacant and staged and projected at market rent.

Overall, the best advice I can give from my personal experience as a multi-unit property owner and realtor is to maintain your property as if you are preparing to sell, and always treat this as a business.

If you need further advice or counsel, feel free to call or email.

John Caronna is a multi-unit specialist/ owner with Coldwell Banker. He can be reached at j.caronna@sbcglobal.net or by calling 415-531-5225.

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Educate

FO UR EFFEC T I V E T ECH TO O L S TO M A K E YO UR J O B E A SIER

ANDREY POPOV/ADOBE STOCK

BY MICHELLE GAMBLE

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very business has technology and tools designed to make jobs easier. In the property management industry, many tech tools exist to make work easier, more efficient, and thoroughly done right to ensure success.

The following are some recommended tools to accomplish those goals.

SNAPPT (EBRHA MEMBER) Powered by artificial intelligence (AI), Snappt provides a predictive model that has been trained by over 3,000,000 documents and scans for over 10,000 anomalies to determine if a document has been manipulated.

Snappt’s AI technology has required years of training to achieve our industry-leading 99.8 percent accuracy. We are acknowledged experts in document manipulation and verification and have retained some of the world’s foremost experts in AI/ML document analysis to vet our system.

Snappt accepts 100 percent of all financial documents and types. These are all secure document types generated by the original financial institution issuing them. One-hundred percent of all banking, payroll and utility companies supply documents as PDFs ONLY, making it the single guaranteed document verification method.

RENTER INSIGHT (EBRHA MEMBER) Renter Insight is the most comprehensive and affordable property management software platform built for inde-

pendent rental owners and managers.

Renter Insight’s cutting-edge platform, renowned for its innovative tools and easy-to-use interfac, is available to any size Rental Owner. Renter Insight provides enterprise-level tools including Accounting, Resident Screening, Maintenance Requests, Electronic Rent Payments, Renters Insurance, Financial Reporting, Unlimited User and Role Management, and much more. What sets Renter Insight apart: Usability: Designed by industry veterans that purposefully designed all aspects of the platform simultaneously to seamlessly work together. The result is the most intuitive software platform that users can learn in minutes, not months, which increase productivity and product adoption and increase NOI. No Unit Minimums: Truly no unit minimums with affordable pricing for all client sizes.

Built-In Accounting: No need to use third party accounting services saving hundreds annually.

Keep your bank account: Renter Insight works with all existing bank accounts; others require changing to their banking.

Superior Client Services: Free onboarding, training, phone, email, and chat support.

RENTREDI When managing properties, Rentredi stands out from the rest. It’s a big help for property managers. It handles rent, screens renters, manages repair requests, and takes care of the finances.

Rentredi makes it easier to talk with renters, keeps files safe, and helps fill

empty properties. Plus, its mobile app means you can run your business from anywhere. However, setting up takes time before you see the good stuff. And you may need to pick up some knowledge if you’re not tech-savvy. After that, using it is pretty simple.

Who would benefit from Rentredi the most? It’s for anyone who wants to expand their real estate company without adding more strain. Rentredi can help you achieve your objectives whether you manage a single property or several. The wonderful thing about modern business tools is that there is a solution for any issue.

RENTHERO According to Shoaib Mughal, founder and director at Marketixdigital, “My most valuable tool for my property management business is RentHero, which is a cutting-edge property management software that streamlines renter communication, rent collection and maintenance requests. It allows users to automate many tasks, ensuring rent is paid on time and maintenance issues are addressed promptly.

“It also provides renters with a user-friendly portal for convenience.

I appreciate RentHero because it simplifies the administrative side of property management, saving time and reducing stress. Its user-friendly interface enhances renter satisfaction, and the automated rent collection ensures a consistent cash flow, making it an indispensable tool for my business.”

Michelle Gamble is the editor of Rental Housing Magazine.

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Inform

T H R E E B I G G E S T H O U S I N G B O N D S C O U L D S O LV E H O U S I N G S H O R TA G E I N C A

BY MICHELLE GAMBLE

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alifornia has a significant housing problem. While some groups report different numbers, it’s generally estimated that “California must build 3.5 million housing units by 2025 to end the state’s housing shortage. This shortage has resulted in rising rents and prices, closed access to homeownership for many families, and forced many Californians to leave the state altogether,” stated the report Housing Under Production in California: 2023 published on California Yimby.

Policymakers have proposed three major bond measures directed at solving the housing shortage set to be voted on in 2024. These three measures are as follows: Bay Area Housing Finance Authority bond (proposed to spend $10 billion to $20 billion) – Assembly Bill 1319 modifies the Bay Area Housing Finance Authority’s (BAHFA) enabling statute to enhance BAHFA’s ability to protect housing stability and promote affordability for millions of Bay Area residents.

The bill allows BAHFA to expand

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programs, removes unintentional limitations on its authority and clarifies ambiguous provisions of law. Key changes authorize BAHFA to: • Employ new best practices for preventing homelessness; • Finance apartments affordable to moderate-income households; • Help cities and counties purchase sought-after residential buildings and land; and • Take advantage of the lower vote threshold for regional bonds and special taxes if voters pass ACA 1 (Aguiar-Curry) next November.

(Source: Association of Bay Area Governments) Affordable Housing Bond Act (proposed to spend $10 billion) – Assembly Bill 1657 (Wicks) would authorize the Affordable Housing Bond Act of 2024 to fund the state’s affordable housing programs, including affordable rental housing for lower income families, homeownership opportunities, and supportive housing for people experiencing homelessness.

(Source: Housing California)

A potential $30 billion-plus is on the table. If approved, billions of dollars could funnel toward housing projects. Pilot programs will be included in the funding to enable the housing industry to explore new and improved ways to scale up housing production, especially in the Bay Area. Experts suggest that 80 percent of the funds would be distributed to counties and cities dealing with housing shortages and homelessness issues.

Passage of these funding bonds would help reduce the homeless issues throughout the state and move the estimated 129,972 homeless people on the streets any given night into safe shelter (source: National Alliance to End Homelessness). “Supportive Housing” being included in the funding could offer ongoing homes for homeless people and take them off the streets of major urban areas where they often set up tent encampments that compromise the health, safety and security of the areas impacted.

With so much money set for approval, it shows proactive policies aimed at resolving overall housing issues in the Bay Area and beyond.

Michelle Gamble is the editor of Rental Housing Magazine.

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Behavioral Health Infrastructure Bond Act (proposed to spend $4.7 billion) – Governor Newsom’s legislative package of two bills proposing to modernize the state’s behavioral health system and create more behavioral health housing have been set for their initial hearings next week in policy committees.

(Source: California Association of Counties)

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Inform hen it comes to property management, like any other industry, some managers are better than others. Competition requires property managers to stay ahead of the curve to be successful. So, what common best practices can make your business thrive and stand out?

The following seven best practices can help ensure your success.

1

CONTINUING EDUCATION Property management certification in California requires the property manager to have a real estate broker’s license. If you want to take your education even further, consider becoming a Certified Project Manager. These extra skills will not only increase your individual marketability, but also position you as a leader and credible expert in your field.

2

SUPERIOR CUSTOMER SERVICE Superior customer service can make any business stand out from the competition. Customer service in general has fallen, and when you’re responsive and proactive, your renters will truly be pleasantly surprised and praise you. They have comparisons. They’ve often been ignored by businesses that are not responsive. You receive automatic good points for being alert and reactive, especially when it comes to maintenance requests where the renter may be compromised in some way (e.g., appliances breaking or heating or AC going out on a regular basis).

Make sure you set up an excellent system (use your portal or create one) to enable renters to easily request assistance when maintenance or

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BY MICHELLE GAMBLE

property issues come up. Establish a customer service policy designed to be responsive within hours. Offer effective communication and comment.

Create a management environment where customers feel comfortable to email, text or call. Don’t ignore problems that may not seem urgent to you, but affect your renters. These policies offer long-term benefits when renters feel loyalty and respect for your business.

3

METICULOUS MANAGEMENT Madhuram Prabhakar, founder Eggless Cooking, uses the best practice of being a meticulous manager. “Coming from a culinary background where every ingredient matters, I approach property management with the same meticulousness. Like in baking, a property’s success hinges on the right mix of ingredients – renters, maintenance, revenue, and relationship building.

“For me, effective renter screening has been key, much like selecting the best ingredients for a recipe,” continued Prabhakar. “Preventive maintenance, akin to perfecting the baking process, has saved us from major repairs. We also stand out with our homely touches to relationship building; just like garnishing a dish, we host seasonal get-togethers for our renters to foster a community feel. Finally, diversification of revenue streams is our secret sauce. We run Airbnb’s on the go, like running a successful food blog alongside my regular cooking. Perfecting these elements has helped my business stand out from mainstream property management companies, delivering a unique ‘culinary approach’ to property management.”

4

MAINTENANCE FOR RENTER RETENTION Strong emphasis on ongoing, proactive maintenance can make a difference with renter retention. For example, when you have a maintenance issue, like heating and AC going wrong, renters will be uncomfortable and frustrated in their own homes.

Weak maintenance policies can lead to renter vacancy and non-renewal of leases.

Jon Morgan Position, CEO of Venture Smarter, explained, “First and foremost, our proactive approach to property maintenance and upgrades has been a game-changer. We invest in regular inspections and preventive maintenance, ensuring our properties are always in top-notch condition.

This not only prolongs the life of our assets but also enhances the overall living experience for our renters. Happy renters tend to stay longer and take pride in their surroundings, which reduces turnover and vacancy rates significantly.”

5

KEEPING UP WITH TECHNOLOGY Another standout practice is to invest in technology. Implement smart building solutions that streamline operations, enhance security, and improve energy efficiency. Embrace innovative technologies that not only boosts your operational efficiency, but also positions your business as a modern and forward-thinking property management company. Plus, it adds value for your renters, making their lives more convenient and secure.

In today’s fast-paced world, staying ahead of the curve technologically is instrumental to success.

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7 BES T PR AC TICES OF PROPERT Y MANAGERS

6

MAXIMIZING PROFITABILITY You’re in business to make money and be profitable. However, if you do not balance the demands of things like vacancies, maintenance and overall expenses, you will find your net profit going down the drain. Remember, you need to be compassionate and responsible toward your renters, but also do the same for your own livelihood. You might encounter renters who demand more than is legally your responsibility. Don’t skimp on service or meet-

ing those requests, but also don’t go too far as to compromise your own business. It’s a fine line, and you need to stay somewhere in the middle. Generosity of your time and attention is up to you, but also don’t comply with unreasonable demands that can erode or compromise your business.

7

NURTURE YOUR RELATIONSHIPS You have an opportunity to show off your real estate knowledge and maybe build future relationships with renters. Renters often transition into

home buyers. Building strong relationships with renters can lead to other business opportunities. So, go that extra mile. Give your business that extra special touch. Send birthday or holiday cards. Call your renters when problems arise. Let them know with your personal touch that you care.

They will remember you, and they will be retained as renters. As an added bonus, they may hire you as their real estate agent when that time comes.

Michelle Gamble is the editor of Rental Housing Magazine.

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Connect

alifornia’s natural disaster devastation over the last five years has escalated the reluctance of property insurance companies to provide coverage, especially in areas ravaged by wildfires. In a state where fires, flooding and earthquakes have become commonplace to destroying homes and property, some insurance companies quit providing policies to California property owners.

As a result, companies that remain in the business have often escalated prices for certain regions in the state, making it difficult to afford an acceptable policy for your rentals.

Mid-market insurance companies – State Farm and Allstate among them – have stopped issuing new coverage and are only renewing existing policies. Farmers has also limited how many new policies it will write in California. “While the average home insurance premium in California may be relatively low compared to the national average, record wildfire losses and high inflation have led many insurance companies to raise premiums on existing customers or exit the state altogether to make up financial ground,” said the Polygenius article “Best Homeowners Insurance in California for 2023.” “In fact, just in the last year, premiums on home insurance policy renewals increased 11% in California, according to our latest analysis of internal policyholder data.”

According to an article titled “Best and Cheapest Home Insurance in California for 2023” published on Insurance.com, “The average cost of home insurance in California is $1,380 a year or $115 a month. Of course, California is a big state and rates vary by location; home insurance rates in Los Angeles are above

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BY MICHELLE GAMBLE

“The average cost of home insurance in California is $1,380 a year or $115 a month. average, while homeowners in San Jose pay below-average insurance rates.

“At $849 a year on average, Allstate is the cheapest home insurance company in California. That’s based on a policy with $300,000 in dwelling and liability coverage and a $1,000 deductible. Insurance.com’s analysis of multiple factors found that Travelers is the best home insurance company in California overall.”

Insurance.com goes on to cite the following insurance providers as the most affordable in the state (in no particular order): Travelers, USAA, AllState, Auto Club Enterprises, Nationwide, State Farm, CSAA Insurance, Mercury Insurance, Farmers.

According to MoneyGeek in an article titled “Average and Cheapest Homeowners Insurance Companies in California,” the cheapest home owners insurance by dwelling is as follows: Allstate: $1,333 ASI: $1,412 Travelers: $1,449 USAA: $1,580 AAA: $1,652 State Farm: $1,664 Universal North America: $1,777 Nationwide: $1,815 Hartford: $2,246 AIG: $2,392 MetLife: $2,711 Farmers: $2,949 Chubb: $3,048

HOW TO DETERMINE THE INSURANCE THAT IS RIGHT FOR YOU? However, when it comes to deciding on what insurance company best suits your needs, price does not always determine your choice. You want to start by comparing premium costs for select properties. It’s important to request a few quotes from insurance providers and compare. Sometimes it’s a balancing act to invest in a policy that works for your properties. For

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FINDING AFFORDABLE PROPERT Y INSUR ANCE IN C ALIFORNIA

greater risk of filing more.”

Also, consider the discounts you may qualify to enjoy. Common discounts include: bundling auto and home insurance, security and protective devices existing on the property, new home, claims-free, and paperless billing.

Any policy you select, should cover the following according to “Best Homeowner Insurance in California November 2023” by Amy Fontinelle and Kara McGinley publishing in USA Today: Dwelling – this coverage pays to repair damage to the structure of your house, unless it’s listed as an exclusion. It’s recommended that you have enough dwelling coverage to rebuild your house from the ground up after a covered disaster.

Other structures – this coverage pays to repair damage to other structures on your property, like a shed or pool house.

Personal property – this pays to replace your belongings if they’re destroyed by a covered disaster, like a wildfire.

example, you might trade off the cost of your premium versus the deductible.

The Moneygeek article also said, “Your deductible is the amount you’re responsible for paying toward a covered loss when you file a claim.

So if you filed a claim for $5,000 in roof damage and you have a $1,000 deductible, your insurer would reimburse you $4,000 for a new roof. A higher policy deductible means lower premiums, and vice versa. Just keep in mind that you’ll need to pay more out

of pocket in the event your property is damaged or you’re a victim of theft.”

Next, you need to understand the cost is not just based on your property’s overall value. Other factors can influence the insurance companies charge. Moneygeek said, “One of the biggest factors that plays a role in your home insurance premium is your claims history. You’ll typically pay more for home insurance if you have multiple claims on your record, since insurers perceive you as posing a

It’s a tough business in California where wildfires destroyed so much in the last several years. Insurance companies have to consider their best strategies to provide products to property owners without compromising their ability to keep their doors open when so many claims get filed.

Few property owners enjoy the reality of climate change, the financial fallout from it has become a reality of doing business in the Golden State.

Michelle Gamble is the editor of Rental Housing Magazine.

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Inspire REN T IN G HIS TO RI C A L H O MES – GUID EL INES TO FO L LOW

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hen it comes to renting homes or multiunit complexes or apartments, property owners must be aware specific rules and guidelines exist as to how the building must be managed and preserved. One of the key governing policies developed by the California Office of Historic Preservation outlines the guidelines in the Mills Act. According to the office, “The Mills Act is the single most important eco26 JANUARY+FEBRUARY 2024 / EBRHA.COM

nomic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. The Mills Act Program is administered and implemented by local governments. Mills Act contracts are between the property owner and the local government granting the tax abatement.

In some cases where property owners wish to restore and rent historical buildings, they can receive a 20 percent rehabilitation tax credit. In order

to receive the credit, the building must be listed in the National Register of Historic Places or “be certified as contributing to the significance of a ‘registered historic district,’” according to the National Park Service (NPS).

The NPS continues and adds, “If your property is located in a National Register district or a certified state or local district, it still must be designated by the National Park Service as a structure that retains historic integrity and contributes to the historic character of the district, thus qualifying as a ‘certified historic structure’.

Not every building in a district is contributing. When historic districts are designated, they are usually associated with a particular time period or ‘period of significance,’ such as ‘mid-1800s to 1935.’ In such a district, a 1950 office building would not contribute and would not be eligible for a 20 percent rehabilitation tax credit.”

However, property owners must follow rules, regulations and guidelines when it comes to altering historical buildings and making renovations for renters. According to the California Office of Historic Preservation, Department of Parks and Recreation’s report Drafting Effective Historic Preservation Ordinances: A Manual for California’s Local Governments, “Recent estimates suggest that at least 250 to 300 governments in California have enacted an historic preservation ordinance. Many of these ordinances, such as the ones from San Francisco and Los Gatos, have been in place for several decades or more, and community leaders frequently reevaluate and fine-tune key provisions to better achieve their preservation objectives.

Other California communities are just

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BY BREA HARPER

beginning to develop ordinances for the first time, using laws from other cities and towns as models.”

The report goes on to identify how historic resources should be identified. These concepts include the following: • Are the important historic or architectural features of buildings in the community of one style or type? Are they easily identifiable? Can clear and understandable standards and criteria for designation and permit review be devised?

• Should the ordinance merely require delays prior to the demolition of historical resources, or should the community be allowed to deny demolitions?

• What is the current state of repair of historical resources in the community? Are they in need of renovation, and if so, is it realistic to expect rehabilitation to occur? Is maintenance of existing structures a concern?

• Where there are known archaeological sites or where there is likelihood for archeological resources to be present, are there provisions for identifying and evaluating such resources, developing treatment plans and developing and enforcing mitigation measures?

WHAT DOES THIS MEAN TO YOUR HISTORIC RENTAL PROPERTY? These ordinances, standards and guidelines must be adhered to if you own or are considering owning a historic property and wish to receive the tax credit. In the city of Oakland, the government laid out its rules and regulations surrounding historic prop-

erties. The city’s website said, “The Oakland Cultural Heritage Survey (OCHS) is a general survey of every visible building in Oakland. It contains estimates on building age and possible historical or architectural interest.

The survey also includes detailed research and evaluation for many specific buildings and neighborhoods.

The OCHS staff maintain: • An extensive library of information on historic properties and districts in Oakland • Oakland Historic Property listings “A reconnaissance or ‘windshield survey’ of the entire city was completed in 1997. Field surveyors from the City Planning Department drove every street and rated every visible building with a preliminary estimate of its age and its possible historical or architectural interest. In addition, many buildings and neighborhoods have been researched and evaluated in more detail (“intensive survey”) by the Planning Department’s Cultural Heritage Survey project. All this information is available to the public as well as to city staff.”

Property owners who wish to receive the 20 percent tax credit, need to research all of the guidelines to ensure their properties qualify and continue to qualify. The city describes everything required on their website.

For the other guidelines in your city or county, please research “preservation of historic buildings” and add your city or county’s name to discover how to do everything.

Brea Harper is a Bay Area writer.

BLACK HISTORY MONTH SPOTLIGHT

ELAINE BROWN

Activist, writer and singer & property developer in Oakland Former Black Panther and activist Elaine Brown launched an $80 million affordable housing project in West Oakland. According to The Guardian article, “She Led the Black Panthers. Now She’s a Property Developer – for Oakland’s Poorest," by Ed Pilkington, “Brown insisted that the decision to pick this historically potent location for her new development was entirely coincidental. ‘It was serendipity,'" she said.

“But having settled on the Seventh Street block between Campbell and Willow streets, she is making the most of past narratives. She is calling the project the Black Panther, and when the complex opens in May, that name will stand proudly in 3-foot-high letters above the main entrance.

Brown said that what had moved her to build the 32,000-square-foot project in West Oakland was exactly the same motivation that propelled her leadership of the Black Panthers in the 1970s. ‘My goal then and my goal now is to create a model and an idea that will raise consciousness and give people something to fight for,’” she said.

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2024

Golden Opportunities for Buyers

BY GRANT CHAPPELL

A

s we conclude one of the most turbulent years since the 2008 crisis, several signs suggest we are in the early innings with more pain to come as several hundred billions of dollars of commercial real estate loans come due in the next couple of years. Seldom a week goes by without a story of a large office, apartment or retail building going back to the lender via foreclosure. While foreclosures are less common, so far in the East Bay as our office and apartment rents did not hit SF pre-pandemic levels, Oakland’s office vacancy rate hovers in the 30% range, setting the stage for distressed sales as loans come due and few buyers are willing to take on high vacancy properties unless the price is low.

News of distressed sales in the multi-family sector occasionally make the headlines in the San Francisco Business Journal and local publications. A recent 25-unit foreclosure sale of a new construction condominium project located at 603 Tennessee Street in the Mission Bay area of San Francisco (SF) sold for $14 million, just over $1 million less than the balance of the unpaid loan balance and interest tied to the property. Two listings of unfinished new construction projects in Oakland came to market – one on Broadway in Jack London and the other on 40th Street. Both the SF and Oakland projects noted some delays in signing off on permits that ultimately delayed delivery of the projects. A major SF property owner saw a sizable portion of their portfolio sold off to the lender versus pursuing a foreclosure when the $800 million loan was due for refinancing.

In March 2022, the Fed began raising rates to tame economic activity, and it appears to be working. East Bay YTD sales volumes are down by 61% since the 2022 high and the October 2023 inflation report suggested year-over-year inflation of 3.2% (though some CPI goalposts have moved1).

These rate increases were implemented at the highest pace in history, exposing interest-rate risk throughout the market 1

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2

zumper.com/blog/rental-price-data

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ers make offers at Cap Rates more in line with the cost of debt for a five-year fixed loan. Quotes for five-year fixed loans from most banks can range anywhere from 6.25% to 7.5%, with the exception of Fannie/Freddie products with higher prepayment penalty options.

Although it’s safer to assume rates will be “higher for longer” through at least the first half of 2024 due to US Treasury bond auctions struggling and core inflation persisting above 4%, there are plausible arguments to suggest rates will decline (or available credit will increase) in 2024. In addition to a 3.2% CPI print for October and the 2024 election cycle, the Fed may need a special credit facility (effectively lower rates) to handle the debt spiral (i.e., treasury debt service costs are an increasingly larger share of the US fiscal budget but buyers of treasuries are asking for a higher rate to take on the risk, which only increases the debt service costs, hence ‘debt spiral’). Even if liquidity increases, it can take time for such benefits to work its way down to commercial lending markets so it remains less important than the core focus of generating net operating income.

On the top line, according to Zumper, rent for 1bd/1ba units are down in Oakland (#11, $2,140, -2.7%), San Francisco (#3, $2,980, -1.3%) and most of the US, with the exception of New York (#1, $4,780/mo, up 9.8%), New Jersey (#2, $3,130, +1%), Miami (#5, $2,660, +6%) and Washington D.C.(#9, $2,390, +3.5%)2. Pre-COVID, SF had surpassed NY for the most expensive rental market in the US. Oakland’s -2.7% year-over-year change is relatively flat, and although not everyone experiences this average change, there are multiple factors to consider.

On the supply side, new inventory has been rising throughout California since the passage of SB330, SB9 and related pro-development laws in response to the 2019 housing crisis.

Pro-development laws can be a dual-edged sword. On the one hand, it’s good for value-add investors who boost property

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(e.g., First Republic Bank acquired by JP Morgan) and requiring a rebalancing of transaction terms to get deals done (i.e., higher cap rate/lower price; more cash/equity and/or creative deal terms).

Higher interest rates continue to plague the residential and multi-family market as sales remain sluggish. Over the past four quarters, sales of five-plus-unit buildings in Berkeley dropped down to 21 transactions, which totaled $74.5M from 50 transactions that totaled $184M over the same period a year prior; Oakland is down to 64 transactions, which totaled $145.5M from 147 transactions that totaled $453.1M. While most home loans are 30-year fixed rates, five-plus-unit apartment buildings carry five-year, 10-year-fixed rates. Once the fixed period is over, the loan adjusts higher, further squeezing cashflow in a soft rental market. Unless we see a softening in interest rates next year, this could force some owners to sell if viable refinance options are not available due to higher interest rates and lower valuations/appraisals.

A good illustration of navigating high interest rates is our team’s sale of 2020 Cedar, a large three-story, nine-unit building in North Berkeley that sold for $3.95M. The buyer was able to assume the loan at 3.1% with three years remaining of interest-only term and pay a 1% assumption fee with some principal paydown. Assumable loan terms and seller financing are often the first qualifying questions buyers ask in today’s market.

In the first half of 2023, our company was able to close a couple sizable sales securing financing in the 5.5% to 5.8% range.

The Mitchell Warren team closed a 48-unit sale on 41st Street in the Piedmont Ave neighborhood after several months of marketing and one price reduction as the market for low Cap Rate sales had evaporated with a dramatic increase in rates.

Our team closed a 12-unit sale in North Berkeley on Walnut Street, also after a price reduction from 2022 as interest buy-

revenues by adding new units in open spaces.

A good example of this is our listing (under contract) of 2520 Regent, a four-story, eight-unit building 0.25mi from the edge of the Berkeley campus. The property received four offers with most bids, including the winning bid, planning to build ADUs in the bottom-floor garage. Owners can expect to pay $250-$300 per gross square foot to build out the ADU over about 12 months and rent the new space for $3-$3.50/ SF/month. Assuming the higher cost and lower rent, this converts to an 8.3 Gross Rent Multiple.

On the other hand, new supply lowers market rents. SB330 has shifted power dynamics of acquiring entitlements, requiring cities to defend their logic for preventing new housing supply, or else pay a penalty to the state of $10K/unit. Entitlements have not been this easy to acquire in CA for at least 30 years and developers have taken notice. Over the past four quarters, the East Bay inventory increased by 2,700 with 60% absorbed, a -36% change in new inventory from the year prior when 4,270 new units were launched and 56% were absorbed. The rate of new housing supply to market is expected to slow due to high interest rates on construction loans, but the effect of new housing supply in California’s traditionally supply-constrained markets is an important factor to keep in mind.

A recent article in the SF Business Journal noted three major projects in Oakland, totaling more than 1,000 units will be coming online in 2024 in the Downtown/Uptown neighborhoods. oWow’s 18-story, 222-unit project located at 1510 Webster will be the tallest mass timber project on the West Coast and the second tallest behind a 25-story project in Milwaukee. Behring’s 39-story, 452-unit located at 1900 Broadway and Holland’s 16-story, 330-unit project located at 24th and Waverly are both slated for delivery in 2024, along with seven other residential projects in Oakland totaling more than 700 units. This influx of new rentals will continue to put downward pressure on rents in surrounding neighboring neighborhoods as developers offer free-rent move-in incentives, along with other amenities including rooftop decks, gym and co-work areas.

On the demand side, there are two reasons to be optimistic for growth. One reason is a recent Redfin survey stating that 10% of properties for sale are by sellers returning to the office3. If the Redfin survey is a sign that the work-from-home (“WFH”) trend will reverse, then we could see the population of the East Bay counties recover from their 2.1% drop since 2020.

Another interesting metric that may also shift, coming from the University of Toronto, is “the recovery of cell phone activity since 2019,” which is 74% for Oakland, 67% for San Francisco and 96% for San Jose4. Another reason for optimism is the end of the eviction moratorium that will provide a way for owners to enforce property rights and collect expected revenues.

Conversations with local brokers support an optimistic outlook: 3 4

“...it’s safer to assume rates will be “higher for longer” through at least the first half of 2024...”

“In the world of multifamily real estate in 2024, we’re in an exciting spot. Prices have been on a steady slide since 2022, and the trend continues into 2024. Right now, with prices per square foot at $300 or even less, it’s a golden opportunity for buyers.

Grabbing a piece of this market today could mean looking back in 10 years and feeling pretty smart about the investment you made.” – Joey Wang, KW Commercial “In a recent conversation with Kent Mitchell, a seasoned NAI Broker, he noted that Oakland and Berkeley’s more affordable rental market and proximity/access to SF should bode well for 2024 and beyond. He’s been an East Bay investor and broker for over 15 years and remembered tougher times in the rental and sales market and feels bullish that the East Bay will weather with fewer distressed sales than 2008 crisis.”

Warren Buffett’s famous quote, “Be greedy when others are fearful and fearful when others are greedy” will likely ring true for smart investors over the next six months since there’s no obvious reason for the Fed to save the market. We have seen cap rates come up over the past six months, which is sending a signal to owners of distressed assets that the value of their assets could decline further. After all, leveraged works in both directions and there’s no pain-free way to de-lever. Investors can find distressed investment opportunities over the next three to six months by spending time with a handful of active and established brokers. Something as simple as spending one hour every two weeks can help navigate the asymmetric information of commercial real estate markets and figure out where pricing and terms need to be to get deals done.

Grant Chappell works with NAI Broker.

unusualwhales.com/news/10-of-u-s-home-sellers-are-former-remote-workers-who-are-being-called-back-into-the-office downtownrecovery.com/charts/rankings JANUARY+FEBRUARY 2024 / EBRHA.COM 31

Protecting Costa-Hawkins UNDER ATTACK...AGAIN To stop the so-called "Justice for Renters" initiative in 2024, the East Bay Rental Housing Association is asking for your support.

We need to fight this third attempt to repeal Costa-Hawkins, led by the same anti-housing activists that failed twice with Propositions 10 and 21 from 2018 and 2020. We are helping our state affiliate, CalRHA, raise $5 million towards this campaign, so we are all in this together.

WHAT IS COSTA-HAWKINS? The Costa-Hawkins Rental Housing Act is a California state law that exempts single-family homes, condominiums, and new construction built after 1995 from rent control ordinances. It also allows rental housing providers to reset the rental rate on rent-controlled units after the renters have moved out — a policy known as vacancy decontrol.

Be sure to attend our Monthly Member Meeting to discuss the importance of Cost-Hawkins and EBRHA’s campaign to protect it.

JAN 16 32 JANUARY+FEBRUARY 2024 / EBRHA.COM

Protect CostaHawkins Meeting

TUESDAY JAN 16th @ 5pm

JANUARY+FEBRUARY 2024 / EBRHA.COM 33

DESIGN

TRENDS Housing Never Looked So Good

BY MICHELLE GAMBLE

34 JANUARY+FEBRUARY 2024 / EBRHA.COM

JANUARY+FEBRUARY 2024 / EBRHA.COM 35

NEW DESIGNS IN LIVING FUNCTIONALITY “Spaces are increasingly multi-purpose, flexible and adaptable to remote work and relaxed living,” said Swamy. “Modular layouts and convertible furniture are all becoming increasingly popular.”

What are modular layouts? “A modular design is an approach 36 JANUARY+FEBRUARY 2024 / EBRHA.COM

for product designing which is used to produce a complete product by integrating or combining smaller parts that are independent of each other,” cited an article titled “What is a Modular Design? Everything You Want to Know in 8 Easy Answers!” that appeared on the Unext blog. “With the modular design approach, a complex product (for example, a car) can be broken down or divided into smaller and simpler components that are independently designed and manufactured. Each of these components is then integrated (or assembled) to form the final product.”

In housing, modular homes can be mistaken for manufactured homes – and while you can have both, it's defined slightly differently. When you consider the concept, it could be compared to mobile homes of yesterday, but not exactly the same. It’s amazing to see the difference. Many modular homes look quite chic and cutting-edge in design. These homes resemble nothing of the old mobile-home look and feel. They can be stacked and two-stories high. They can have floor-to-ceiling picture windows to take advantage of beautiful views. They resemble traditionally built homes, and in some cases, it’s difficult to tell the difference between regular and modular homes.

According to Next Modular, “A modular home (or prefabricated home) is built in a factory to about 80-90% completion and then trucked over to the building site. A modular home, unlike its manufactured counterpart, does not ship fully assembled, nor is it built on a chassis. It is built to about 80-90% completion in a factory before transportation to the homebuyer’s property. The home arrives at the job site in multiple pieces, and a crane operator sets each piece in its place on the foundation. Once it is completed, a prefabricated modular home looks indistinguishable from a traditionally built home.”

BIO-ARCHITECTURE ON THE RISE Organic, eco-friendly architecture is at the forefront of what is being called “bio-architecture”. According to the report The Practice of Biophilic Design by Stephen R. Kellert and Elizabeth F. Calabrese, “Biophilia is the inherent human inclination to affiliate with nature that even in the modern world continues to be critical to people’s physical and mental health and wellbeing (Wilson 1986, Kellert and Wilson 1993, Kellert 1997, 2012). The idea of biophilia originates in an understanding of human evolution, where for more than 99% of our species history we biologically developed in adaptive response to natural not artificial or human created forces.”

“Biophilic design principles emphasize the integration of nature into structures to improve well-being,” said Swamy.

Thus, there is a move toward utilizing local and natural materials, which not only adds a unique touch but also reduces the environmental impact of construction,” said Ryan Nelson, a real estate and rental property expert and founder and

OPENING SPREAD: SLAVUNADOBE STOCK. OPPOSITE: JOVANNIG/ADOBE STOCK

I

t’s always fun to see the next generation of architetural and interior designs when it comes to housing. Interior and exterior design trends provide a sneak peek of what the cities and towns are going to look like in the near future and provide insight into how our lifestyles influence the new designs.

New houses, multi-unit complexes, and more will continue to be built, as California faces an ongoing housing shortage. These new home designs represent lifestyle shifts impacting our culture and society. Cutting-edge designers search for innovative ideas to meet the changing needs of society. Thus, the changes to come reveal what designers have created to go beyond basic shelter and accommodate the demands of modern life, which also differentiates properties and makes some more desirable than others.

Even if you only intend to remodel, it becomes important for the sake of competition to create spaces that meet the requirements of renters whose lives no longer resemble their routines of just five years ago. The pandemic, its influence on work styles (full-time remote or hybrid remote work), changes in family dynamics (parents needing to live with children and vice versa), economic impacts of issues like inflation, and shrinking dollars that require people to do more with less impact the demands on rental housing.

Plainly stated, people now have more demands placed on their domiciles while also managing tight budgets and paying increased bills, which makes expendable income shrink.

When renters have fewer dollars to spend on outside recreation and entertainment, the money they invest in their homes means they stay home more often and expect that home to satisfy as many personal and professional needs as possible.

“A well-designed and well-appointed exterior makes a great first impression on potential renters,” said Priyanka Swamy, CEO of Perfect Locks LLC Partitioning. “A well-designed property often indicates a well-kept and up-to-date space, which increases renter demand and potential rental value. Upgraded exteriors also demonstrate a focus on safety, security and energy efficiency, which makes the property more attractive to prospective renters. In today’s ever-changing landscape of design, it’s essential to stay on top of these trends. It’s not just about style but also about function and sustainability.”

So, what can we expect to see in interior and exterior designs in 2024?

CEO of Rental Real Estate. “Modern exteriors often showcase a harmonious balance between contemporary design and eco-conscious elements, setting a new standard for residential architecture.”

Exterior designs in new housing developments are increasingly focusing on blending aesthetics with sustainability. Green architecture principles are gaining ground, with features like living walls, solar panel arrays, and rainwater harvesting systems becoming more common.

Another emerging trend offers a throwback to another era of natural materials (e.g., bricks, cobblestones, real wood).

While there is a resurgence in brick home designs, in the San Francisco Bay Area where brick homes became popular in the late 1900s, builders cannot build homes entirely out of brick. Brick homes are not earthquake friendly. One good shake and these structures can crumble, which is why brick is banned. However, this ban doesn’t preclude using bricks in a mixed-media design with other materials. Thus, a new trend is shifting toward combining multiple materials, including wood, stone and metal and brick. “[These materials] provide not only a unique aesthetic but also practical benefits (so increased durability and easier maintenance),” said Nelson. “One of my favorite examples is using cedar shake siding along with stone and brick. This can deliver such a grand appearance while offering variety in texture and color. Trust me, in today’s market, you want a building that stands out in its uniqueness and quality.”

MAXIMIZING FLOOR PLANS “In the design of interior spaces and floor plans in new housing and apartments, I noticed a strong emphasis on open and flexible layouts,” noted Nelson. “Developers are increasingly creating spaces that flow seamlessly from one area to another, promoting a sense of spaciousness and versatility. High ceilings, large windows, and the use of neutral color palettes are common features, enhancing natural light and creating a visually appealing atmosphere. Additionally, there is a growing focus on incorporating sustainable and energy-efficient elements, such as energy-saving appliances and smart home technology, into the interior design.

“Unique and interesting concepts in new apartments and duplexes often revolve around maximizing functionality in smaller spaces. Built-in storage solutions, like under-staircase storage or convertible furniture, are popular to make the most of every square foot. Furthermore, designers frequently incorporate eco-friendly materials and energy-efficient fixtures. Some apartments also integrate smart home automation, allowing residents to control lighting, security and climate with ease. Moreover, communal spaces within apartment complexes are being thoughtfully designed, with amenities like rooftop gardens, fitness centers, and co-working spaces to enhance residents’ overall living experience.”

COMMUNITY EXPERIENCES The pandemic definitely changed living patterns. The home has become some people’s everything, and as a result many housing development planners recognize more than ever the value of safety and security. To create a sense of community and enhance curb appeal, developers are incorporating pedestrian-friendly pathways, communal green spaces, and artistic façades.

Some developers include indoor and outdoor recreational spaces. Clean, well-designed pathways link everything together. You can walk outside your multi-unit complex, which leads right to the recreation center where you can exercise or work in designated spaces, or takes you to an open park area.

This trend will continue to grow and expand with fresh, new ideas of how to keep renters safe, connected, and easily able to walk to the grocery store that might even be a part of the complex. Discussions about what are called smart cities are underway, and in some cases, already planned. The concept is to make the place you live, work and play be your primary residence. Ease and convenience to basic services will be available all in one spot. Private security will be offered to reduce crime and create safety and security.

One thing is clear: the future of housing design is looking quite different than it did in 2023. This year promises renters to see some intriguing and exciting changes.

Michelle Gamble is the editor of Rental Housing Magazine.

JANUARY+FEBRUARY 2024 / EBRHA.COM 37

Industry Partners EB RH A D IREC TO RY ACCESSORY DWELLING UNITS Adapt Dwellings, Inc. Chris Paizis | 510.319.9045 adaptdwellings.com

ATTORNEYS — REAL ESTATE/CORP. Barth Calderon LLP 714.704.4828 barthattorneys.com

SYMBIHOM LLC 510.930.8900 symbihom.com

Burnham Brown Charles Alfonzo | 510.835.6825 burnhambrown.com

ACCOUNTING & TAX Hunter Tax Associates 925.362.1350 huntertaxassociates.com

BANKING/LENDING Arena Commercial Capital Jason Bowden | 510.224.3894 arenacommercialcapital.com

Friedrich Properties 510.895.8310 besttaxcpa.com

Bay Area Mortgage Group 925.719.0660 bayareamortgagegroup.com

ACCOUNTING SOFTWARE Balanced Asset Solutions 805.284.1950 balancedassetsolutions.com

First Foundation Bank Michelle Li | 510.250.8133 ff.inc.com

AFFILIATIONS ALN Apartment Data 800.643.6416 alndata.com ASSOCIATIONS Hamilton Families Mayo Lunt | 415.321.2612 ATTORNEYS McKeown & Associates 510.710.1325

Law Office of John Gutierrez 510.647.0600 jgutierrezlaw.com ATTORNEYS — EVICTIONS/ PROPERTY OWNER DEFENSE Bornstein Law Daniel Bornstein | 415.409.7611 bornstein.law

Burnham Brown Charles Alfonzo | 510.835.6825 burnhambrown.com The Law Offices of Alan J. Horwitz Alan J. Horwitz | 510.839.2074 alanhorwitzlaw.com The Shepherd Law Group Michael Shepherd | 510.531.0129 theshepherdlawgroup.com Zacks, Freedman & Patterson, PC 415.956.8100 zfplaw.com

King Hou Lam, Home Mortgage 510.517.3253 kinglamloans.com Story by J.P. Morgan Shane Nebbia | 201.961.4022 story.jpmorgan.com

GOVERNMENT AGENCIES City of Oakland Housing and Community Development 510.788.0462 oaklandca.gov/rap

Oakland Housing Authority Leased Housing | 510.874.1500 oakha.org Oakland Rent Adjustment Program (RAP) Marvin Nettles | 510.238.6246 mnettles@oaklandca.gov oaklandca.gov/RAP StopWaste.Org 510.891.6558 HANDYMAN SERVICES Start to Finish 510.727.9128 INSPECTIONS Edrington & Associates Steve Edrington | 510.749.4880 edringtonandassociates.com INSURANCE

BUILDING SUPPLIES & REMODELING

Acrisure Rick Callaway | 925.771 2334 acrisure.com

BEHR® Kristen Fuller | 415.416.0994 kfuller@behr.com | behr.com

Commercial Coverage Paul Tradelius | 415.436.9800 comcov.com

Home Depot Brian Aguirre | 770.681.1675 brian_aguirre@homedepot. com | homedepot.com/c/ Pro_Xtra

Foxen Pete Gherson | 805.729.5393 pghersen@foxen.com

CONSTRUCTION Precision Concrete Cutting 650.867.8657 pccnorcal.com CONTRACTORS & RESTORATION BluSky Restoration Contractors 415.678.7800 goblusky.com DOORS & GATES R & S Overhead Garage Door Sean Boatright | 510.483.9700, x14 rsdoors.com ENERGY CONSERVATION GoPowerEV 415.298.8315 gopowerev.com

38 JANUARY+FEBRUARY 2024 / EBRHA.COM

Jain L. Williams State Farm Insurance Jain Williams | 510.530.3222 jain@jainwilliams.com Kelly Lux — State Farm Insurance Kelly Lux | 510.521.1222 Kelly.lux.gjcg@statefarm.com PFN Insurance Services 510.483.6667 pfninsurance.com Toggle Insurance (a Farmer's Company) 818.679.4516 ebrhanow.com/TOGGLE

INTERCOMS & ACCESS CONTROLS R & S Overhead Garage Door Sean Boatright | 510.483.9700, x14 rsdoors.com

ADT Multifamily Joseph Knaack | 714.277.2586 JosephKnaack@adt.com LAUNDRY EQUIPMENT WASH Multifamily Laundry Systems, LLC 800.421.6897 wash.com/contact-us/ LEAD, MOLD & PEST MANAGEMENT Alameda County Healthy Homes Dept.

510.567.8282 aclppp.org LITIGATION SUPPORT SERVICES Edrington & Associates Steve Edrington | 510.749.4880 edringtonandassociates.com PROPERTY MANAGEMENT Advent Properties Inc. Darryl Glass | 510.500.7531 adventpropertiesinc.com dglass@adventpropertiesinc.com

Aventis Property Management 925.319.4600 aventismanagement.com Bay Property Group 510.836.0330 baypropertygroup.com Beacon Properties Aaron Young | 510.428.1864 beaconbayarea.com Lapham Company Jon M. Shahoian | 510.594.7600 laphamcompany.com Openworld Properties 510.681.7771 openworldproperties.com Seville Property Management Maya Clark | 510.244.1289 sevillepropertymanagement.com SKM Property Management 925.820.3921 skm-properties.com/properties Continued on page 40

JANUARY+FEBRUARY 2024 / EBRHA.COM 39

SUPPL IER D IREC TO RY

PROPERTY MANAGEMENT SOFTWARE Azibo 408.890.1094 | azibo.com

DoorLoop 786.373.5842 doorloop.com Ebby (Beekin) Allison Wright allison@beekin.co Rent.com 510.206.9403 rent.com Renter Insight 303.586.4420 Snappt Kyle Nelson | 310.383.5465 snappt.com Story by J.P. Morgan Shane Nebbia | 201.961.4022 Yardi Systems 800.866.1124 yardi.com

REAL ESTATE BROKERS & AGENTS CBRE Keith Manson | 510.874.1919 cbre.com

Edrington & Associates Steve Edrington | 510.749.4880 edringtonandassociates.com Lapham Company Tsegab Assefa | 510.594.0643 laphamcompany.com Litton / Fuller Group 510.693.5444 littonfullergroup.com NAI Northern California Grant Chappell | 510.336.4721 nainorcal.com Owens Real Estate Deeana Owens | 510.225.5810 owensrealestate.com Pacific Coast Real Estate 510.915.9721 | pacificcoastre.com The Pinza Group Steven Pinza | 510.725.4775 pinzagroup.com The Prescott Company David Weglarz | 510.398.1027 theprescottcompany.com

40 JANUARY+FEBRUARY 2024 / EBRHA.COM

Winkler Real Estate Group 510.528.2200 RENTAL SERVICES ReLISTO Eric Baird | 415-237-1819 relisto.com ROOFERS Fidelity Roof Company Doug Kellor | 510.547.6330 fidelityroof.com

General Roofing Company Michael Wakerling 510.536.3356 generalroof.com SEISMIC ENGINEERING & CONSTRUCTION Quake Brace Manufacturing Company 510.495.1575 quakebracing.com

West Coast Premier Construction, Inc. Homy Sikaroudi | 510.271.0950 wcpc.inc.com TENANT SCREENING SERVICE Intellirent Cassandra Joachim 415.849.4400 myintellirent.com

TenantAlert 866.272.8400 EBRHAscreening.com UTILITY BILLING & MANAGEMENT Ecology Action 831.515.1341

Google Fiber 415.770.2766 Livable 877.789.6027 comesave@livable.com livable.com WASTE & RECYCLING MAINTENANCE Bay Area Bin Support Nancy Fiame | 888.920.BINS bayareabinsupport.com

Green Glove Heroes 510.862.6061 greengloveheroes.com WASTE MANAGEMENT Thermostat Care 510.224.5086 thermostatcare.org

EBRHA would like to welcome our newest industry partners.

JENKOATAMAN/ADOBE STOCK

Continued from page 38

City of Oakland Rent Adjustment Program

Rent Adjustment Program Housing & Community Development 250 Frank H. Ogawa Plaza Suite 5313 Oakland, CA 94612 oaklandca.gov/RAP rap@oaklandca.gov (510) 238-372`

*Announcements*

RAP Fee Owners of rental units covered by the RAP Ordinance or the Just Cause for Eviction Ordinance must pay an annual fee of $101/unit. All fees are payable on or after January 1st and are delinquent if paid after March 1st. Owners who timely pay the annual RAP fee are allowed to pass on half of the fee to tenants for the current year.

Questions? Contact the Business Tax Office at (510) 238-3704 or BtWebSupport@oaklandca.gov.

Oakland's Phase-Out Moratorium Owners of units covered under the Just Cause for Eviction Ordinance may now terminate tenancies for reasons listed under Just Cause (e.g., failure to pay, refusing entry, etc), and collect late fees.

Tenants cannot be evicted for failure to pay during March 2020 – July 14, 2023, if the tenant's failure to pay was due to a COVID19-related financial hardship (e.g., medical expenses, loss of income, etc.). Late fees cannot be applied to rents that came due during the moratorium if the delay was due to COVID-19.

For questions, please contact a RAP Housing Counselor at 510-238-3721 or rap@oaklandca.gov.

CPI Effective August 1, 2023, to July 31, 2024, the CPI is 2.5%.

Moratorium on Rent Increases Oakland’s Phase-Out Moratorium continues to prohibit rent increases beyond the CPI of 2.5% (including banking) on units covered under the RAP Ordinance. Owners of covered units may still file petitions but must wait until after June 30, 2024 before passing along banked or petitioned-based rent increases.

Contemplating a rent increase? Contact a RAP Housing Counselor at 510-238-3721 or rap@oaklandca.gov.

JANUARY+FEBRUARY 2024 / EBRHA.COM 41

Last Look H OW TO M A N AGE H OA RD ER S

H

oarding is not the same as collecting say antiques or other collector’s items. In fact, hoarding is a psychological disorder and protected under the Fair Housing Act. As property owners you may find one of your renters hoards often piles of junk, garbage, debris and other stuff that can be a hazard to not only the renter but any renters surrounding the house or apartment. As a serious problem, property owners must be careful in how they handle the situation to avoid violating that renter’s rights and create a legal problem.

Hoarding is defined as a persistent difficulty discarding or parting with possessions because of a perceived need to save them. Hoarders can be surrounded by literal mounds of “stuff,” and not all of it garbage. It can be an excessive

42 JANUARY+FEBRUARY 2024 / EBRHA.COM

amount of clothing, knickknacks, household goods, and also garbage. Homes can literally be filled wall to wall and from ground to ceiling with mounds of stuff. Materials begin to rot and decay and cause unpleasant odors and attract vermin. Hoarding can pose health and safety hazards and code violations. It can’t be ignored without risk to everyone involved.

In order to protect your interests if you face managing a hoarding situation, here are some recommendations: Step 1: Documentation – much like any legal situation, you have to create documentation and stick to the facts.

The moment you realize there is a hoarding situation, begin this documentation. Also, if this person is violating city code, then make sure she/he has been informed.

SOUPSTOCK/ADOBE STOCK.

BY MICHELLE GAMBLE

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“Hoarding can pose health and safety hazards and code violations. It can’t be ignored without risk to everyone involved.”

Step 2: Offer to help this person. Direct him or her toward clean-up, and if resisted, try persuading this person to find professional counseling.

Step 3: Give the renter notice. You need to ensure the renter knows that if he/she doesn’t correct the situation, they will be evicted.

Step 4: Problem not solved then it’s time to seek legal resolution. You will need to get an attorney and take legal action.

Step 5: If you have a code compliance issue or health department rules and regulations, make sure your attorney or you provide information to the renter, so he/she knows they are on notice. Start eviction proceedings.

Step 6: No response? Time to start eviction proceedings based on city/county rules, regulations, etc.

THE HIGH-TECH, HUMAN APPROACH TO INSURANCE Rick Callaway | 925.771 2334 | acrisure.com rcallaway@acrisure.com | i c Ô ø E JANUARY+FEBRUARY 2024 / EBRHA.COM 43

LOCAL KNOWLEDGE, LOCAL SUPPORT, LOCAL ADVOCACY, WHEN YOU NEED IT. EAST BAY RENTAL HOUSING ASSOCIATION (EBRHA) is a nonprofit trade organization representing rental owners and managers of apartment buildings and communities, small multi-unit properties (2-4 homes), condominiums, and single family homes.

EBRHA members range in size from small investors with just one property to large property management companies that own or manage hundreds of units.

Our membership consists of more than 1,500 rental housing owners, property managers, attorneys and other service contractors. Altogether, EBRHA represents over 43,000 rental units and serves over 25 cities throughout Alameda and Contra Costa counties.

Industry Partner Companies who provide products , services, and/or industry expertise for rental housing providers

Property Management Co. Businesses who manage/own 21+ rental housing units/homes in Alameda and/or Contra Costa counties

Rental Community Individual multifamily properties who typically have 10+ units and staff in Alameda and/or Contra Costa counties.

Independent Rental Owner An individual who owns/ manages 20 units or fewer in Alameda and/or Contra Costa counties.

EDUCATION, NETWORKING, & EVENTS: • Monthly Mixers to meet other housing providers in our community • Annual in-person events to learn about industry resources and trends • Open Q+A sessions with board members, industry experts, and other seasoned providers • Weekly Webinars featuring new services, products, laws, forms, and more!

INDUSTRY UPDATES: • Subscription to bi-monthly Rental Housing magazine, monthly Rentrospect newsletter, and weekly digest.

• Newsflash, Red Alerts, and more virtual message updates from EBRHA

COMPLIANCE • EBRHA RPM Certification Courses included with membership • 1:1 support to help you navigate current laws • The latest Rental Forms with optional 1:1 consultations (available 24/7 through our digital library) • Reliable renter screening services through Intellirent ADVOCACY • Committees organized around our efforts and mission • Legal & Political Action Funds • Rallies, designated lobbyist efforts, and active bill tracking

3664 GRAND AVENUE • SUITE B • OAKLAND, CA 94610

WHY SHOULD YOU RENEW YOUR EBRHA MEMBERSHIP? ASK YOURSELF: 1. Has managing rental property expectations/ relationships been a challenge in recent months?

4. Are you worried about the protection of your property rights?

7. Are you unsure who’s defending your business interests?

2. Are there unit vacancies you need to fill right now?

5. Do you have at-risk renters who have been paying rent reliably this year?

8. Are you concerned about the health of your rental housing business in 2023?

3. Is it difficult to constantly navigate all the housing legislative changes?

6. Have any of your renters not paid rent OR are they paying reduced rent?

Why not join EBRHA?

If you answered “YES” to any of the questions above, then EBRHA is a partner that you can’t afford to be without. Membership provides endless benefits!

DID YOU KNOW? EBRHA SERVES ALAMEDA AND CONTRA COSTA COUNTIES California: Alameda County

California: Contra Costa County

Founded: March 25, 1853 Population: 1,510,000

Founded: February 18, 1850 Population: 1,050,000

Area: 821 Seat: Oakland

Area: 804 Seat: Martinez

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