President's Message

The World is Changing

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Greetings from the front lines. The legislative front that is. The California Legislature has introduced almost 3,000 bills this year, and 150 of them will affect the rental housing industry. The assaults are coming in every direction with the most alarming being Bill AB1506, which is an effort to repeal the Costa-Hawkins Act. For 20 years this one act has successfully blocked runaway rent control and vacancy decontrol policies related to things like evictions. In years past, we as rental property owners and managers have had to rise to the occasion periodically and join to fight one negative issue or another. But I am of the opinion that the world around us is changing and the days of the occasional battle are over. We need to adjust to this new environment and budget our time, energy and finances toward working against destructive legislation full time. We don’t have a choice any longer.

On the local front, tenants rights groups are trying to arrange meetings with any organization or city commission that is willing to meet with them in order to tell their “Just Cause Eviction” story. What can I say that hasn’t been said before about Just Cause Eviction? I don’t know, but maybe it just hasn’t been said well enough. If it had, maybe we wouldn’t still be dealing with it. Someday it would be nice to not have to keep explaining it. It would be nice if people would just get it. We can win this one and when we do, it will be a win for both owners and tenants.

Do you want to know how to help? Start by talking to your tenants! The so-called tenant rights groups count on our relationship with tenants being adversarial. If it isn’t, their reason to exist vanishes. Think about the tenants you have that you know will get it, and reach out to them. You fix your leaky roofs, burst plumbing or worn electrical systems because you’re protecting your investment. Your tenants are critical to your investment, too. How much of your time do you invest in them—to educate them on how bad legislation with a pretty label isn’t going to do them any good? If you aren’t communicating with them, I can promise you the other guys are. If your tenants always hear from them and never hear from you, what do you think is going to happen? If you want help telling the story, reach out to AACSC. We will help you.

As for State legislation, you can do a lot there, too. When we send out a Red Alert to call a legislator in opposition to a proposed bill, please make the call. You can call five legislators in five minutes!

Also, donate to the AACSC PAC. We use the money to support leaders who understand our issues. We use it for good legislation and against bad legislation. We’ll be OK in the long run if we pull together and work at it.

More Affordable Housing

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Housing providers have always been better Aadvocates for tenants than the so called tenants rights groups. Sound counterintuitive? Not really if you think it through.

The majority of housing providers rely on rental income to fund their retirements. You wouldn’t want to be at war with the individuals who fund your way of paying your bills, would you? Is it in the best interest of tenants’ rights groups for housing providers and tenants to be at war with each other? Very possibly.

If housing providers—yes, all you retirees know who you are—are made out to be bad guys, that ignites the kind of “good guy vs. bad guy” emotion that leads to successful fund raising. Is beating the “bad guys” their only issue? Fortunately no. Tenant advocates are trying as hard as housing providers to stimulate the construction of more affordable housing. Maybe their problem is a marketing problem.

Building more housing isn’t as emotional an issue as beating down the “bad landlord.” Take away that emotional appeal and you lose donations and maybe your job. If their real value, which is to advocate for the construction of more housing, isn’t emotional enough to sustain their fund raising, then maybe it’s time to redefine their mission. Is there anything to be proud of in finding below market housing for a needy tenant by defunding the retirement income of a housing provider who spent a lifetime fixing leaky plumbing and repairing old roofs in order to have money to live on down the road? Not if you’re being honest with yourself.

Housing providers, for better or for worse, do have a sort of marital bond with tenants. One partner’s job is to make a good home for the other to live in. The other’s job is to treat their home with respect and pay the rent. It’s a fair exchange. When things are going well, it’s an easy relationship. When things aren’t going so well, that’s when the strength of the relationship begins to show.

The problems are usually financial. The housing provider may fall on hard times and not keep the property in the shape they normally would. For the tenant who finds themselves in a financial jam, one of their first pleas for help is to their housing provider. Most of the time, the problem on both sides gets resolved, but a major reason for this is their reasonable business relationship. Take that away with adversarial rules like REAP and Rent Control, and that bond is forever broken.

Let’s not let that happen! It’s in tenants’ and housing providers’ best interests to maintain a fair relationship. Tenants’ rights organizations won’t like it. They can’t profit by it. When you understand that, it makes all the sense in the world for housing providers and tenants to stick together.

Tremendous Opportunity

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It seems like I was just out enjoying your company at the AACSC Holiday Party, but now I’m writing to you in February! It’s tough to keep up. I want to send out a special thank you to the AACSC Board and staff for a great evening at our Installation Dinner. Last year was very productive, but this year is full of promise and tremendous opportunity. We’ve got the right group in place to make it happen.

What are your plans for your rental business this year? Are you looking for some ideas? There are a wealth of great ideas available through NAA. Start with their website www.naahq.org, scroll to the bottom of the home page, and click on News & Publications. Here are some examples of NAA articles that will get you thinking: “Attracting Young Residents with Website Design,” “Pet Services on the Rise,” “Why Good Maintenance Leads to Good Resident Relations,” “Outsourcing Accounting and Back Office Function,” “Package Management - An Expected Amenity,” “Roofing: Tips to Help Protect your Property.”

I also like to read their economic predictions for our industry in the coming year. Here are some highlights: continuing low cap rates, lower demand for high-priced one-bedroom apartments, and millennials clustering more in urban centers. Their quote from Kim Bettencourt, Fannie Mae, for the residential rental business in the coming year: “A combination of low interest rates, a healthy spread between cap rates and U.S. Treasury Rates, continued job growth and demand for multifamily rentals from Millennials, coupled with low home ownership rates present a positive scenario for multifamily fundamentals over the next 12 months.”

Finally, some thoughts regarding Nancy Ahlswede. I joined the Board of AACSC shortly after Nancy retired. Prior to that, I would regularly see her at our monthly membership meetings and always looked forward to her legislative reports. In fact, I would say that the primary motivation I had for attending the membership meetings was to hear her reports. She was that good. Last month I attended the reception that AACSC had at the Association’s offices to remember Nancy. There must have been 20 or 30 photographs of Nancy with various state and local politicians, past and present AACSC Board members, Nancy giving out industry awards, Nancy presiding over membership meetings and our annual trade show. There were pictures from various times throughout her 28 years with AACSC. I don’t think there are many of us who could document our business and professional life as clearly as she did through all of the photographs taken of her as our executive director.

Looking at those photographs and seeing her in a way that I wasn’t able to while she managed AACSC, I couldn’t help thinking that I had just had the privilege of seeing the summary of an important person’s life who had truly left their mark.

Get Involved!

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Happy New Year everyone! I can’t tell you how much I’m looking forward to serving as your President this year. I expect a number of great things to happen in 2017.

For starters, I think that by the time you read this, USC will have whipped Penn State in the Rose Bowl. (Sorry UCLA fans.) I think we’ll have a good year in the rental real estate business, and be able to manage around any legislation that’s passed this year affecting our industry.

I don’t know about you, but I have a big wish list for my real estate business this year, and maybe the best way to ensure that those wishes all come true is to put together some good New Year’s resolutions and start working on them. Do you have a plan yet for 2017? Are your goals in place yet? If not, here are some suggestions to help you get started.

Help your business and your industry by getting involved with one of the AACSC committees.

AACSC has local and state legislative committees, a trade show committee, member ship committee, golf tournament fundraising committee and Political Action committee. Get involved. Your help is needed. You’ll meet great people, learn a lot, and make a difference.

Lest we forget our regular order of business as we wait to see what will be on our legislative calendar this year, nevertheless we will hold out an optimistic view that we will continue to be successful as AACSC works with our lobbyist to fend off negative laws that will impact our industry.

We will also be offering a full schedule of great educational classes this year. Get the schedule now and sign up for the classes that will help you up your game. AACSC is working on a certification program for landlords that will educate, test and verify to all interested parties (like the city or pros pective tenants) that you have the knowledge and tools to run a great rental business. Watch for announcements on this program on AACSC’s website.

I also want to thank all of our vendors who continue to sponsor our events and would like to acknowledge the NEW Ambassadors Committee.

This new group is excited to get involved and it is a great way to see what AACSC is all about. Our Ambassadors are informed of all the activity around the Association so be sure to look for them at all of our events. Just a hint—they will be the ones with the badge that says AACSC Ambassador on it. Let them know you are interested in joining the team and we will get you connected, too.

Finally, 2017 is shaping up to be a great year and I would like to personally invite you to the AACSC 2017 Board Installation Dinner on January 19th at the Virginia Country Club. We have some great new board members that I would like you to meet. They are bringing us new ideas, new energy and a new perspective that will be very useful as we begin to work on this year’s issues and challenges.

Cheers!

Reflections

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I love the holiday season. It brings back memories of a happy childhood, Santa, exciting gifts, visits with family and the food. The food is the best. The aroma of turkey baking for hours, sweet potatoes, and pumpkin pie—I can’t get enough. There are also a lot of people who use this time of year to donate their time and give generously to people who are either less fortunate or have fallen on hard times. It’s a special time for sure, but sometimes I think I take it all for granted and don’t set aside enough time to remember the people who helped ensure that I could enjoy all those wonderful memories.

I was reminded of this recently while reading an incredible book called The Last Stand of the Tin Can Sailors. It’s the story of the last naval battle in history. It happened during the waning months of WWII and pitted the US Navy against the Imperial Japanese fleet. I purchased the book while on a tour of the battleship USS Iowa in San Pedro Harbor.

During the battle, the USS Samuel B. Roberts, DE-413 was sunk, and the survivors drifted on life boats or whatever they could hold onto for three days until they were finally picked up. Bob Despain was one of those sailors picked up. He happened to be on the USS Iowa the day I visited, and he signed my copy. The book is filled with stories about the efforts of incredible people making unbelievable sacrifices. They faced a determined foe and didn’t blink. On top of that, when they came home, they weren’t looking for a handout.

Earl “Blue” Archer, a Kalinin Bay VC-3 Avenger pilot suffered a serious back injury while flying through the brambles of flak. He had an option to take an 80 or 90 percent disability benefit and begin a life of inactivity, or he could take three or four aspirins twice a day and continue flying planes in the naval reserve. He decided he could make a living and passed on the disability payment.

These are the men who helped make sure that I could enjoy all those lovely holiday memories while I was growing up. Their contributions can also be celebrated on December 7th, Pearl Harbor Day.

Is there anything we can learn from these people that we can apply to the struggles we face in our own lives today? I think so. If we want to use their example of not backing down against a determined foe, it might help us defend our property rights next year.

I hope that you will join me and take some time to reflect on the people who have helped us get here and maybe draw inspiration from them to help us going forward. And if you are looking for a worthy cause this holiday season, a visit to the USS Iowa, or a donation to the non-profit organization that maintains the USS Iowa, helps to keep the contributions of these great Americans alive for future generations.

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