President's Message

A Frontal Assault on Rental Housing

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It seems like yesterday we were all at the Annual Holiday Party/Toy Drive enjoying ourselves and discussing what 2019 might bring and here we are in February already. A lot has taken place in the last month and, yet, there is still a lot to do. Based on my perspective and experience, 2019 is shaping up to be another frontal assault on the rental housing industry, and AACSC intends to meet it head on. The Board of Directors met proactively in January in order to get a head start on the challenges and issues we will be facing. In addition to our regularly scheduled Board meeting, the Board of Directors met at a “special meeting” in early January to establish our committees, committee chairs and members for 2019, and to set out our top priorities for the year ahead of schedule. As you might imagine, legislative activities ranked high on the priority list.

In last month’s issue, I wrote that legislation would be our primary focus in 2019 and, as anticipated, we are already seeing a significant amount of proposed legislation on a state and local level which will directly affect the housing industry. There are several discernable themes throughout the bills. However, if I had to choose one phrase to sum up the emerging trend for 2019 legislation, it would be “tenant protections.” Of particular importance in this area are four statewide topics addressed below which will almost certainly come out as bills.

First, it is widely expected that legislators will sponsor and introduce a “mandatory Section 8” bill prohibiting landlords from denying housing to an applicant based on the applicant’s receipt of Section 8 funds. The basis for the legislation will rest on Section 8 being a “source of income” which, as most of you already know, is a protected category under Fair Housing laws.

The second anticipated bill deals with security deposits. Specifically, the maximum amount a landlord may collect as a security deposit from an active military member. Current law permits landlords to charge tenants up to a maximum of two months’ rent for an unfurnished apartment and three months’ rent for a furnished apartment. The anticipated legislation will cap the allowable security deposit at approximately 50 percent of the current permissible maximums. In other words, the maximum allowable security deposit for an active member of the military will be capped at one month’s rent for an unfurnished apartment and two months’ rent for a furnished unit.

We also anticipate “criminal history” being a significant issue in connection with a landlord’s screening policies and procedures. Sources who are familiar with the legislation indicate that as written, a landlord may be permitted to look at criminal history going back a maximum of seven years, regardless of the crime of which the individual was convicted. In other words, if passed, landlords will be prohibited from denying housing to an individual based on a conviction occurring seven years and one day prior to receipt of the applicant’s application, even if the conviction was for murder, rape, aggravated assault, or any other heinous felony. Furthermore, even if the conviction occurred within the seven year window, landlords will still be required to jump through a litany of analytical hoops before they can deny the applicant housing based on those convictions. While HUD issued a “guidelines” memo on this topic in April 2016, California legislators appear to have taken the guidelines to heart and decided to go even further than HUD by increasing the requirements and making it law.

Finally, we are already receiving information about state legislators’ renewed efforts to pass laws in connection with rent control, rent caps, and “vacancy control” which, of course, means amending Costa Hawkins. While the state bills appear to focus on larger topics, the local level political environment has not changed much from the end of 2018, at which time we saw “rent control” and “Prop 10” as the dominant themes. Currently, there are multiple cities within our geographic boundaries wrestling with the idea of rent control in one form or another, including Inglewood and Long Beach. While Inglewood is moving on the issue at a slower pace, Long Beach is moving at a nimble pace.

In January, Southern Cities representatives met with the Mayor of Long Beach to discuss the City’s thoughts, intentions, and plans on issues ranging from rent stabilization, relocation fees, and just cause evictions. Prior to the meeting, the City hired a consulting firm who drafted a staff report which may be released by the time you are reading this article. It is anticipated that the report will suggest the implementation of the requirements listed above as a means of protecting tenants and affordable housing in the area. However, that does not necessarily mean they will, in fact, be implemented. The meeting with Mayor Garcia went very well and it is my belief that he listened to the concerns of those in attendance and is committed to reaching what he considers to be a balance of the interests of all involved. Due to space constraints, I cannot write about all of the legislation affecting housing providers of which I am currently aware.

We are barely into the legislative session and, in addition to the legislation addressed above, the industry is seeing statewide bills related to “homelessness prevention,” “accessory dwelling units” (land use), and “affordable housing.” The fight is not over! As I stated in last month’s meetings and message, 2019 will see an increased effort by tenants’ rights advocates to diminish the rights of housing providers through increased legislative prohibitions and regulations.

Finally, in addition to the preparation for the legislative battle we anticipate, the Board of Directors has been actively reviewing its internal operations in an effort to bring its members increased value. In addition to developing an increased educational program for our members, we continue the search for an Association Executive with the knowledge, experience, and skill sets required to run the day-to-day operations in an effective and efficient manner, given the politically charged environment we are facing.

In all, the Association’s Board has been proactive in its efforts to address the concerns of our members and we intend to keep the trend going. AACSC’s mission and duty is to promote, protect, and enhance the rental housing industry while preserving your private property rights. As President, I appreciate the opportunity to serve you, our members.

A Proactive Approach to 2019

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As last month’s “President’s Message” pointed out, a bit of reflection is good, but it is equally important to prevent ourselves from lingering in the past. The entire rental housing industry faced difficult challenges in 2018, and many of those challenges will continue to confront us during 2019. In 2018, we were presented with rent control on both state and local levels, a growing tenant’s rights movement (which seems to be gaining momentum) and state legislators who do not appear to understand the difficulties endured by housing providers in the wake of onerous anti-landlord laws. Nonetheless, looking back long enough to review the lessons we learned from both our successes and failures should be viewed as nothing more than an opportunity to revise our strategies and return even stronger.

If we want to move our interests forward, we need to adapt to changes in our industry by anticipating the challenges we will face and developing proactive strategies to deal with them. Other than extrapolating and learning from our experiences and lessons, what occurred in 2018 will be of little consequence, but what is ahead of us will be shaped by it. With that in mind, I want to take this opportunity to briefly address 2019, and where I see AACSC going during that year.

As with years past, our greatest focus in 2019 will be legislative matters. AACSC has always been known as the preeminent apartment association, especially when it comes to our knowledge and activity on the legislative front; 2019 will be no exception. AACSC is set to implement a more robust legislative affairs approach which includes increased lobbying on the Federal, State and local levels, increased involvement in the decision making process at city hall, increased levels of communication with our members regarding those legislative matters affecting their properties and businesses and, hopefully, even greater member involvement as a result.

At the time I am writing this, we are slightly more than two weeks into December, 2018, and the legislators have already put forth at least three bills which will place undue burdens on the day-to-day business activities of landlords. One such bill is SB 18 (Skinner) which, if passed, will provide free legal counseling to any residential tenant facing an eviction. We also anticipate new bills in 2019 involving assistive and/or comfort animals, criminal background checks, and increased occupancy limits. With that insight, AACSC is already reviewing the bills presented and will be presenting the members with information about those bills shortly.

Furthermore, we will provide the contact information for those in Sacramento who support the bills, as well as talking points to guide your communications with those representatives. In fact, it is our intention to provide you with some legislative updates more frequently so you can track the legislative session as it moves along in 2019. In addition to advancing our legislative presence, AACSC is raising our commitment to our members.

While AACSC members have always been active, engaged, and committed to improving the housing industry, the past few years have demonstrated a surprisingly new level of awareness and involvement on the part of landlords. In fact, never before have I seen so many housing providers who got involved, played a role, and made their voices heard. And what was the result of all of that increased involvement? We beat rent control in Long Beach, Sacramento, and virtually every other city in California on whose ballot it appeared in 2018. In short, we won.

In addition to increasing our legislative efforts in 2019, AACSC will also increase our involvement and efforts to work closely with our membership.

Rather than allowing the energy of our members to go underutilized, AACSC intends to capitalize on their increased involvement by providing you with a greater depth of information and services in order to continue the forward movement. Specifically, we will be broadening our communications, increasing your access to key industry leaders and service providers, increasing our Board Member presence at the member meetings, increasing our members’ educational opportunities, and deepening our relationships at the local city council level so we can effectively present and protect your position on topics of interest. We recognize your efforts and want you to know we appreciate you. We will be there with you to promote, protect and enhance the rental housing industry, while fighting to preserve your private property rights.

Finally, before concluding this message to our members, I should address the Association’s change in leadership for 2019. Each year, some Board members leave, and some Board members remain. Sometimes it feels like a revolving door exists on the Association through which the same Board members go around and around, never really exiting. However, the December 2018 election of Board members gave the Association a new group of Board members who appear to have a fresh way of seeing things and a level of energy and passion for this industry that few people know. When you take into consideration those leaving the Board in 2018 and those newly elected for 2019, the makeup of the Association’s Board of Directors changed significantly, and I am excited to work with this new group of people. While I don’t have enough space to provide you with the level of information I have about these individuals, I can provide you with a bit of insight about them.

Niki Coleman retired as a Captain in the United States Marine Corps (USMC). While on active duty she was stationed at the Pentagon in Washington D.C. where she oversaw the budgeting and expenditures of aviation accounts for the USMC to the tune of billions of dollars. She also owns property in Long Beach, both as a private investor and with partners.

Julie Haff, a licensed real estate agent, owns and operates her own and clients’ residential rental units throughout the State and sits in leadership positions on multiple other Boards of Directors.

Jesse Howard is a local business man and graduate of U.S.C. who owns and operates a local footwear company while managing his own portfolio of properties in the Long Beach area.

Rocky Madan is a local landlord who brings a tremendous amount of practical business know ledge and experience to the Board.

Marjorie Masters has been a Long Beach apartment owner for more than 30 years, who also just happens to have an MBA from the Stanford School of Business and has worked for some of the largest corporations you may have heard of, including Star-Kist, Heinz, and Proctor & Gamble.

In all, this is a very bright and energetic new group of individuals with a lot to offer the Association and its members. Each has already volunteered to sit on one or more committees, and each of whom appear to be sincerely concerned about the health and well being of our industry and Association. They have already changed the energy and enthusiasm of the existing Board members, and I am looking forward to working collaboratively with them to further the interests of the Association and our industry as a whole.

As the 2019 President of the Association, I want you to know that the leadership of AACSC (including both the Executive Committee and our Board members) has a clear vision of our goals for 2019 and a tremendous amount of confidence in our ability to achieve that vision. We appreciate that you allow us to serve you, and we hope you will continue to partner with us to make 2019 an exceptional year.

Reflection and Moving Forward

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This is the time of year when we all need to take the appropriate time to reflect on the year, make important distinctions, gather up our wins and losses, and evaluate what happened. Then we take everything we’ve learned through our entire lives and gather it all up to move forward and plan the new year. Proudly, I get to say that this has been, in many ways, one of the best years AACSC has ever had—the forward motion, positive changes made, challenges met, and finances for the year—each have not been better in all our history that we can recount. For that, I am extremely proud of our current staff and Executive Board and Officers for their leadership, decisiveness, wisdom, and courage in the face of all the industry naysayers, ill-informed, and those who refuse change no matter how bad things get.

The problem is that some of us spend far too much time looking into that tiny, rear-view mirror of the past and not enough time looking into that massive windshield of the future. When we get stuck on the past, it is a killer in business and progress, and we always need to be on guard for that. The world never stops spinning and growing, and if we cannot grasp that, then we are in big trouble no matter what we do or whom we do it with. Reflection is important, no doubt, but staying there too long is counterintuitive, counterproductive, and has been the source of decline and/or stagnation everywhere you see it, including our own businesses or families. Like any plant on the earth, if it is not growing it is dying, or like my mentor, Darren Hardy says, “If you’re not improving, you’re falling behind.”

The past year took a lot of effort, time, knowledge, courage, introspection, and a boatload of humility to ask for the help we’ve asked for from you—our members, our Staff, our Board, and outside consultants and professionals in order to put us in the position we have arrived at today—in one of the most promising positions we’ve been in since those of us who have been affiliated the longest with AACSC have seen in a long time. There has been a lot of growth and change, and when those things happen, they feel tough—they feel chaotic, but the numbers don’t lie. Change is tough, but necessary. Change is natural. Change is necessary to stay ahead of the wrong philosophies of our local and statewide economics, such as enacting the poorly thought out confines of rent control and other punishing and hindering policies. If we don’t believe these philo sophies will be reintroduced again at a later point with upgraded messaging and thinking (aka: CHANGE) then we are in for big trouble in the future. At the same time, we need to upgrade and change as well to combat for the future win. The same is true for our innerworkings of our association—to remain relevant, to reach and hold onto being the premier association — we need to think about the changes we need to make, and we need our members far more involved and engaged.

As President of the AACSC this year, I came in with two major goals, which #1 had to do with Board Engagement. Admittedly, before this year, the engagement of our Board was not what it should have been, but let’s face it—several years ago, and for many years prior, there was an Executive Leader who ran the show, did so well, and did so much that there wasn’t much left for anyone else to do! A superpower she was, indeed! But, by this time in 2018, change was beyond necessary and change came to the AACSC in fantastic ways; now, I have never seen this Board so deeply engaged, knowledgeable, and continuing to learn and grow—and I have to say I am extremely proud of them for rising to that challenge and blowing the goal away in ways I never imagined.

Goal #2 was to have the best financial year we’ve had in the last five years, and we pulled together and decimated that goal as well. At the beginning of the year, we pushed and pushed for higher budgeting goals, and pushed ourselves, our members, and our Staff to deliver, and even though we didn’t hit every goal the way we wanted, we sure ended on a positive note to the likes of which we never expected or can recall from our recent past.

At the same time, there is also news that is not positive that we also need to reflect on and plan for 2019 and beyond. As of now, we’ve missed some of our deadlines in getting next year’s Board and Officers elected, which we usually have done by now, and that leaves some uncertainty moving forward. No matter how that turns out, we need our members’ voices now more than ever in the coming years to hold our feet to the fire and to make sure we are going after the proper goals and mission of this Association—to preserve, protect, and enhance the rental housing industry. Our members’ voices are very powerful, and you need to check in on us and inspect what you expect from us. You need to make sure we are changing with the times and situations and staying ahead of the opposition and naysayers—within our circle along with externally, and frankly, as a member, I would spend most of my time on the internal—what are we doing and delivering as an association? How are we helping you and doing what we say?

We need to see to it that we are the leaders of education in property operations and management. We need dedicated staff working full-time on legislative advocacy, growing our membership footprint, and combining forces to educate our lawmakers on the unintended consequences of their laws and actions, as well as to educate renters in the same way. We need to open our doors to the opposition to educate them as well and come to viable solutions that don’t include punishing anyone but instead working out solutions that can fit us all.

We are very hopeful after this tumultuous, yet fantastic year we’ve had in our association and industry, but the hard work has truly just begun, and we cannot allow the rear-view dwellers to send us backwards. We need to continue the forward push; 2019 is going to be the most important year the AACSC has faced in many, many years and we need our members to be highly engaged and involved. We need you on committees to see what we are doing and to help be the voice of forward motion to keep us on track to meet and exceed your expectations.

Cheers to 2018, cheers to you, and cheers to 2019!

This has been an absolute honor, and I cannot be prouder of this experience and hopeful for our future.

Thanksgiving and the Moment of Truth

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Of all the months for elections to be held, we've decided on November, the absolute worst month for such a divisive act - not to mention disrupting our Thanksgiving, which is the best holiday. It's almost an oxymoron to put both in the same article, let alone sentence, but here we are trying to put a note about each in our magazine and articles.

Traditionally, we haven't done much in the way of putting out voter guides as it may "ruffle feathers," and I get that. But there is no reason I cannot tell people how I plan to vote, so that's what I am going to do here. And though I don't have the room to explain all the details, you can bet that concerning our industry, I've done my research (I hope you have, too) and have decided on the following (but you should always vote the way you think is right for you).

Proposition 1: Bonds to Fund Specified Housing Assistance Programs. SUPPORT

Proposition 2: Bonds to Fund Existing Housing Program for Individuals with Mental Illness. SUPPORT

Proposition 3:
Bonds to Fund Proj1ects for Water Supply and QuaJity, Watershed, Fish, Wildlife, Water Conveyance, and Groundwater Sustainability and Storage. SUPPORT

Proposition 4: Bonds funding Construction at Hospitals Providing Children's Health Care.  SUPPORT

Proposition 5: Property Transfer Tax Changes. SUPPORT

Proposition 6: Eliminates Road Repair and Transportation Funding and Requires Electorate Approval for any Measure to Enact Certain Vehicle Fuel Taxes and Fees. I will SUPPORT, but you can bet they will go after something else next to raise taxes.

Proposition 8: State Regulation of Kidney Dialysis Clinics and Limits Charges for Patient Care. Too much wrong with this, so I will OPPOSE.

Proposition 10: Could repeal. the Costa-Hawkins housing safeguard. OPPOSE, OPPOSE, OPPOSE!

LOS ANGELES COUNTY BALLOT MEASURE:
Measure W: Public Health and Safe, Clean Water Program. Too much wrong with this: I will OPPOSE.

CITY OF LONG BEACH BALLOT MEASURES:
Measure AAA: City Auditor's Authority. SUPPORT
Measure CCC: Ethics Commission. SUPPORT
Measure DOD: Citizen Redistricting Commission. SUPPORT
Measure WW: Hotel Workplace Requirements and Restrictions. Way too much wrong with this; I will OPPOSE.

As far as for which people I am voting for office, I typically like to see how Craig Huey breaks it down. His no~nonsense approach voter guide always helps to "cut through the rhetoric, election propaganda, and biased media coverage." Here, you will find breakdowns (or Governor, Statewide Offices, Legislatures, Judges, and more: https://www.craighuey.com/ la_ voter _guide_)

One word of caution: when you get to certain offices up for election and find that there are only two people running and they are from the same party, but not your party- make sure to do your research first.

Finally, Thanksgiving-food comas and aromas, family, fellowship, unplugging, unwinding, naps, relaxation, FOOTBALL and another nap.

Some info I dug up and would like to remind everyone about this fantastic holiday:

Thanksgiving originated as a harvest festival and has been celebrated nationally since 1789. The event that Americans commonly call the "First Thanksgiving" was celebrated by the Pilgrims after their first harvest in the "New World" in October 1621. This feast lasted three days and was attended by 90 Native Americans and 53 Pilgrims.

Happy Thanksgiving, and get out the vote!

It Sure Is Scary!

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It seems like each year I find out an increasing number of people are Halloween lovers—fanatics even—and the holiday seems to be gaining in popularity all around due to the love people have of graphic shows like Game of Thrones, or their general comfort in becoming more festive, dressing up weird or creepy, and turning their decor toward the dark. People seem to be coming out of the woodwork (pun totally intended) each season to outdo themselves and others in dark, creep-o, or weirdo. And, no—I am not describing some of the bills and propositions circulating in Sacramento each year. (Although I do admit that sometimes there are not many things scarier!) Just making an observation about Halloween is all.

So, in this month’s issue, it seems appropriate to give some safety advice and fun facts I’ve gathered from different sources in time for the holiday.

Fun Facts:

  • Jack-O-Lanterns were first made from turnips.
  • Halloween is more Irish than … St. Patrick’s Day? (What?) Its origins come from a Celtic festival for the dead called “Samhain.” Celts believed the ghosts of the dead roamed Earth on this holiday, so people would dress in costumes and leave “treats” out on their front doors to appease the roaming spirits.
    As it evolved, people then had to dance for their treats.
  • In Alabama it’s illegal to dress up as a priest, nun or rabbi, and—get this—in California it’s illegal to use silly string! Really? (Pay no attention no the weirdo comment above!)

Safety Tips for Trick-or-Treaters:

  • Stay in large groups with a responsible adult (let this carry through to November when you step into voting booths, too).
  • Have flashlights, glow sticks or other lights / reflectors incorporated with costumes so each person can be easily seen.
  • Examine everything carefully before ingesting it (let this also carry through to November in the voting booths before you swallow a bill or proposition before thoroughly inspecting it).
  • Warn all candy-givers, friends and neighbors about the dangers of allowing Prop 10 to pass, and Vote NO!

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