News

October 2017

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It’s October and I can’t believe that there are only 86 shopping days left until Christmas. Of course, this does not include Hanukkah, Kwanzaa or other forms of holiday celebration. In the end, I love all the holidays—from Halloween to Thanks - giving to Christmas. Whether it is created by Hallmark Cards, made up to celebrate chocolate, our Administrative Assistants, grandparents, etc., I find joy in the celebration and reminder that there are so many things to be grateful for and that we should not take anything for granted. So enjoy the beginning of Fall and all the upcoming holidays.

Now on to some more pressing news. An update this month:

  • At the direction of the Los Angeles County Supervisors, staff have not yet returned with their report on Tenant Protections. Until this happens, a workgroup will not be able to be formed. Will keep you advised of any progress.
  • Legislature is on holiday recess until the first of the year. At this writing, the Governor still has an opportunity to sign bills and veto, so we will update you on this next month.
  • Tenant rights groups are beginning to protest at our Management Companies. Be aware as they may come anytime and are wearing black masks (that may change as well). These groups are hosting community training sessions to teach them how to be a community rights advocate.
  • Rent Control continues to ramp up and while things appear to be relatively quite right now, we also know that there is a continued push to take this Statewide.


At the Association, I need to give a BIG THANK YOU to the AACSC staff for making the Trade Show a GREAT success this year. Jeannie helped us up the ante on the look, Tom brought us over 30 NEW vendors. Our Board Members really stepped up and helped us meet and greet members, en courage new members to join us in our fight against Rent Control, and our PAC Trustees shared with everyone who came by about the value and benefit of contributing to the PAC. Sophia, Donna, Rachael, Oliver and Terri did everything else in our AACSC booth and as usual we enjoyed seeing all of you!

Upping Our Game

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As I start to wrap up my second and last year as President of the Board of AACSC, I have been doing a lot of reflecting on my term—what went well, what didn’t and what direction I’d like to see both the organization and our businesses as landlords move toward.

Our future depends on a couple of simple ideas really. We need to keep upping our game by becoming more professional as landlords. We need to unite as never before, to counter the organizations that are trying to use our tenants against us to promote their rental business-killing agendas.

We’ll have better, more successful rental property businesses if we run them like pros. Professional property managers do a great job and whether or not you use one to manage your properties, you need to be just as smart. Don’t use exclusionary language in your advertising. Don’t ignore your before and after property condition check lists. Don’t rent to anyone without doing your due diligence. Do send your last tenant their remaining security deposit with full accounting within the required time frame. Do document all communication with your tenants. Do take the time to educate yourself on a regular basis so that you stay up with any new regulatory changes.

I see the day coming when we’ll all be required to take continuing education classes as a condition of accepting rental payments for our properties. Don’t look at this as a negative. It will be a big positive for you if it keeps you from making a costly mistake due to ignorance.

Our need to unite as landlords is expanding now to include builders and Realtors because the tenant exploiter groups are trying to damage their business just like they are trying to do with ours.

We work in a wonderful industry. It’s hard work, but over time, we’ll do very well owning property. You can meet, and make friends with a lot of interesting people, from other landlords, property managers, service providers and yes, your tenants. Finally, if you do it right you’ll have something of great value to pass on to your children. Let’s make sure we do it right.

Pet Policy Gone Wild

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New “assistance animals” regulations proposed by the Fair Employment and Housing Council (FEHC) will likely cause heartburn in the rental housing community. The attempt to bring clarity in the murky area of service and support animal needs versus fraud is fraught with ambiguity. It is understandable why rental property owners are confused about the law, existing and proposed. Unless you’re a lawyer who regularly studies these issues, it is hard to know where one assistance animal law begins and another one ends. When does “reasonable accommodation” become unreasonable? Ultimately, rental property owners are scared of being sued and, therefore, often choose to allow support animals onto their property, even when they suspect fraud is being perpetrated on them.

But owners have very important, reasonable and necessary reasons for having a no-pets policy. Animals can be dangerous, spread disease, interfere with the quiet enjoyment of others, and damage property. An owner’s right to keep animals off a property, unless to accommodate a person with a real need, therefore, must be protected. Unfortunately, current laws, including future laws under this Proposal, fail to protect owners from those fraudulently gaining access for their animals to rental properties.

Rental housing owners and managers support and understand the need for providing reasonable accommodations to those who legitimately need an emotional support animal, as these animals (or “comfort animals”) can provide a therapeutic benefit to those with a mental or psychiatric disability.

We also recognize that service and support animal fraud is rampant and easily perpetrated under our current laws and regulations. More and more individuals are pretending their pets are legitimate service or emotional support animals when, in fact, the person has no legitimate need for the animal or the animal itself is not legitimately a service or support animal. Ultimately, that is the main concern we have expressed in regard to FEHC’s Proposal: the proposed regulations do little to protect rental property owners from fraudulent requests for support animals.

Support and service animal fraud is widespread in our society. Fake assistance animals are everywhere. Multiple news reports suggest that it is more than a few bad apples that are perpetrating the fraud. Rental property owners should not be forced to accommodate people who are perpetrating fraud on them, nor should laws and regulations facilitate such fraud. Unfortunately, this Proposal does just that, because it contains few, if any, effective anti-abuse mechanisms to prevent people from gaming the system.

People requesting a reasonable accommodation for a support animal should have a legitimate disability that requires them to have a support animal. They should have a real diagnosis and prescription for a support animal by a real medical or mental health professional with expertise to give an opinion about the disability at issue and the need for a service or support animal. The disability diagnosis and need for a support animal should also be current. Any one with a real disability and a real need for a sup port animal should have this kind of documentation. Without these standards, there are no standards. Anyone could self-diagnose, tell their friends or “peer support group” they have a disability and a need for a support animal, and then use that friend or group as a source to verify their disability. Alternatively, a person who was diagnosed with a disability five years ago, and who might not currently have a disability or need for an accommodation, could use that stale prescription to game the system. We are sure that this is not the way the law is supposed to work.
We submitted, on behalf of the Association, detailed comments on the FEHC’s Assistance Animal Proposal, including a number of ways the Proposal is deficient in preventing fraud and subject to abusive conduct:

  • Diagnosis or assessment by a licensed medical or mental health professional is not required.
  • The need for a support animal is not required to be a current need.
  • The person verifying a person’s disability or need for an accommodation does not need to be a medical or mental health professional or need to have specific training or education about support animals.
  • When an owner knows about a disability but not the need for an accommodation, the owners should still be able to request reliable information describing the needed accommodation and the nexus between disability and accommodation.

A meaningful review of a requested accommodation should allow rental property owners to make reasonable requests for certain reliable documents from reliable sources that are specifically defined. The following is a list of provisions that should be contained within the regulation to prevent fraud and abuse, and to ensure that reasonable accommodations are provided to those with legitimate needs:

  • Owners should be able to require disability and need for accommodation verification documents to come from a licensed medical or mental health professional.
  • The documentation should describe the nature, severity and duration of the disability.
  • The disability, need for the accommodation, and verifying documentation should be current (i.e., not more than one year old), and on letterhead from a mental health professional.
  • The medical or mental health professionals must have expertise to give an opinion about the person’s medical condition and the need for the accommodation.
  • Owners should be able to request new verification documents if the previous “doctor’s note” was not described as permanent.
  • The person seeking the accommodation must be under the current care of the prescribing medical or mental health professional.
  • Verification from a “letter mill” should be prohibited entirely.

Our comment letter to FEHC on assistive animals high lighted all the ways in which the Proposal represents an unbalanced approach to addressing the issue of assistive animals in rental housing. We discussed the failure of the Proposal to consider the quiet enjoyment of other tenants, nuisance issues, the safety and health of other tenants, pet fraud, and the need for rental housing providers to be able to establish reasonable rules for tenants who are provided a reasonable accommodation. In short, the needs of property owners and other tenants are not properly accounted for or taken into consideration, and the Proposal should be amended to better reflect the realities of landlord tenant relationships and the respective needs of each group.

Tax Reform

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Tax reform is front and center on the congressional agenda, and there is a real chance it will become law this year. The last comprehensive tax reform legislation was the Tax Reform Act of 1986 (TRA 1986) signed into law 30 years ago by President Ronald Reagan. We all remember how that bill devastated the industry for years, so it is imperative that we engage with policymakers to ensure a more positive outcome.

In the years since TRA 1986, legislation has changed the tax code—mainly at the margins—focusing on rate changes and other targeted pro visions while comprehensive reform has eluded policymakers.

The election of Donald Trump and continued Republican control of the Congress has changed the outlook for tax reform. One-party rule where reform is a priority for all of the key players has increased the odds that broad-based legis lation can become law.

At this stage of the process, House Republicans are taking the lead on reform. While President Trump made a number of proposals during the 2016 campaign, it is House Republicans who have put forward the most detailed plan. Entitled “A Better Way Forward for Tax Reform,” the House GOP released a “blueprint” for reform last summer, which is the starting point for their internal discussions. The blueprint would:

• Reduce the top tax rate on LLCs, partnerships, S Corporations and other pass-thru entities to 25 percent from 39.6 percent;
• Tax capital gains, dividends, and interest at a maximum rate of 16.5 percent;
• Replace depreciation with immediate expensing of all investment except for land;
• Eliminate the deduction for business interest;
• Eliminate like-kind exchanges;
• Eliminate the Low-Income Housing Tax Credit; and
• Repeal the estate tax while retaining stepped-up basis for inherited assets.

It is important to note that while the Blueprint appears to eliminate the Low-Income Housing Tax Credit (LIHTC), there are good indications it may be put back into the House GOP proposal.

As the most developed tax reform product in circulation at the moment, the Blueprint is the centerpiece of conversation around tax reform. However, it is not yet legislation, and there could be significant changes made before an actual bill is introduced.

Moreover, the White House and Senate still need to flesh out their own proposals. There is much time to go before a reform agree ment is reached, if at all, and we can expect the details of any agreement to change several times along the way.

For our part, the apartment housing industry’s primary objective in reform is to support legislation that promotes economic growth and investment in rental housing without unfairly burdening apartment owners and renters relative to other asset classes. To this end, we are pushing lawmakers to ensure the following priorities are reflected in any bill that moves forward.

Tax reform must protect “flow-through entities” (e.g., LLCs, partnerships, S Corporations, etc.), which are the dominant business structure in our industry.

Under this model, a firm’s earnings are passed through to the partners who pay taxes on their individual tax returns. Accordingly, Congress must not reduce corporate tax rates financed by forcing flow through entities to pay higher taxes by subjecting them to a corporate-level tax or by denying credits and deductions.

It is also a priority for the apartment housing industry to maintain “like-kind exchanges” where property owners can defer tax on the gain on sale of an asset if, instead of selling their property, they exchange it for another comparable prop erty. These rules encourage property owners to remain invested in the real estate market. Such an important tool for investment must be maintained in a reformed tax code. Notably, with the exception of land, the expensing proposal in the House Republican Blueprint provides for de facto like-kind exchanges.

Tax reform should also take care to preserve investment incentives. Borrowing is a central part of how apartment housing is financed (a typical development project could be financed with 1/3 capital and 2/3 debt and the tax code has long provided a full deduction for interest). Indeed, without business interest deductibility, the cost of debt financing would increase and shift many real estate business models. This would inhibit devel opment activity at a time when we face significant affordability challenges.

Policymakers should also take care when making changes to cost recovery rules like depreciation so they do not harm real estate investment. Apartment buildings are currently depreciated on a 27.5-year schedule. While House Republicans are proposing to allow buildings to be immediately expensed, others have suggested extending the current law depreciation period. This would surely lead to reduced development and invest ment and ultimately undermine real estate values and stifle job creation.

Finally, protecting the Low-Income Housing Tax Credit (LIHTC) is a priority for the apartment housing industry. The LIHTC is the central vehicle producing housing for moderate- and low-income families. We are in a period of crisis in housing affordability and need stronger incentives like the LIHTC to effectively respond. This program must remain a vital part of the strategy to address our nation’s housing needs.

You will notice some overlap between what is being proposed, at least in the House GOP Blue print, and the apartment housing industry’s priorities. It is important to remember that policy makers are truly looking to reshape how taxes are levied in this country and that perhaps what they propose could effectively replace what is in the tax code now and keep the apartment housing industry whole. We remain open minded on this point as we continue to press for our top priorities and evaluate in detail what tax reform proposals mean for our business.

Every member of the apartment housing industry must be engaged in the advocacy campaign on tax reform. That means contacting your members of Congress and communicating our message.

Changes to the tax code will impact all of us, and it is our responsibility to ensure whatever reform is passed does not harm our ability to provide housing to one-third of the nation. To learn more about how you can get involved in shaping the debate, contact Peter Fromknecht at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and take our Advocacy Interview at http://re.spon.se/OTmUtG to see who you might know on Capitol Hill! Your relationships with lawmakers and your willingness to act on those relationships will make the difference between success and failure on tax reform.

A Tribute to Nancy Ahlswede

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As I stepped into my new office in September of 2013, I began to look around the office to get a sense of who was here before. It was a surreal feeling to walk among binders and binders filled with memos, emails and past magazines that were once under the authority of someone I knew had the hearts of this membership. After a few days of getting to know the staff and talking with some of the board members it suddenly dawned on me that I was not alone in this process. I was about to walk into the footsteps of a legend in the multifamily industry.

As the months went by and I began to meet more and more people, the comments started with this statement, “Oh, you are the new Nancy”. But I knew immediately that there was more to this Association than just being the “new Nancy.” Nancy left a legacy that will never be matched. She was a force to be reckoned with. It was clear that her devotion to this industry went beyond her position as Executive Director—it was her passion. When I finally met Nancy, we talked for close to two hours and when I left that meeting with her, I knew that I could always go to her to ask questions and get advice. As with anything in life, when the opportunity is not there any longer you always wish you had more time to ask just one more question or learn just one more tidbit that will help your organization.

Over the next few pages it is only fitting that we share some thoughts that come directly from those who loved and admired her the most. So, in her memory, we share these tributes.

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Ron Kingston was honored to give the eulogy at Nancy’s funeral. Here are a few excerpts from the eulogy:

Nancy—

Was a master collaborator who was result-driven. People from all walks of life would conclude that the solution that was reached when Nancy was involved in negotiations of an issue was always the best possible.

Had organizational skills that assured success. Just a few years ago, she was hospitalized during the annual trade show. That did not interfere with making the trade show extremely successful. This skill was passed on to her daughter, Katherine.

At times, I wondered if they should have considered installing a hide a bed or futon in the office due to the number of hours they would work.

Was the eternal optimist. Just three weeks ago she and I talked about her plans for her 70th birthday party which would be on a boat in the Long Beach harbor. And during that same conversation she was planning on how she would resume being with her family, Larry, Katherine, Chip, Jennifer and the three grandchildren—Cooper (who loves video games), Donovan (who loves sports such as flag football) and Nixon (who was just baptized).

Has a legacy that can never be forgotten. Each one of us should always remember that she would push forward during extremely difficult and challenging times.

Michael D. Pintek, Board Emeritus
We in the legal profession would refer to Nancy as a “Force Majeure” (a superior or irresistible force). The small acorn that was the Association 28 years ago, through the work and efforts of the officers, board of directors and membership, who were the roots, under the guidance, administration and dedication of Nancy, who was the lignin that held it all together, has grown into a mighty oak tree. Nancy’s star shined bright on all of us while enriching our lives and illuminating the path in front of us.

Bob Luskin
I had the pleasure of working with Nancy for over 20 years. Nancy wan an amazing person. She has made the Apartment Association what it is today. Nancy will be missed.

Allen & Mary Ann Wood
Nancy lives on in our hearts and memories. Not only as a great lady who led the Apartment Association for so many years, but also as a very dear friend.

Sharon Coughlin
Nancy was definitely destined to be a leader of this organization that so generously devotes their time and energy in fighting for the rights of people in the rental housing industry both for owners as well as for tenants. Her amazing knowledge provided anyone interested in seeking a career in property management the understanding of how great it truly is to SERVE people. I was always amazed by her as a woman, a great mother and most of all a great leader to be inspired by.

Pat Thornton
I was shocked and saddened by this news. Brian and I always felt so welcome at the monthly meetings. She always had a ready smile and enthusiasm and the ability to spread hope and joy!

Grace Velazquez, GGB Properties, Inc.
Despite being a “new-comer” to the industry, Nancy took the time to get to know me and showed genuine care. Nancy’s passion was contagious and I hope that her legacy will live on.

Rebecca Moffett, A Better Property Management, and Past Board President, and Board Emeritus
Nancy was dedicated to landlords and their property rights and she always put them first. She was smart, well known, connected and knew how to work a crowd or a council meeting. She had intuitive gifts that were unparalleled with anyone I have ever known. She had great command of her job, of legislative bills and happenings, of other Asso ciations’ trials and tribulations, etc. Nancy knew everyone, never forgot a name and was a brilliant strategist. When Nancy spoke, you listened. She made sure everyone was well informed on all the issues and she listened to people to make sure that the board members could arrive at a consensus on most issues. She held everyone to a high standard which everyone wanted to meet and it was easy as we followed the lead of Nancy and the high bar she set for herself. She praised everyone on their good deeds, thanked volunteers with certificates and personalized plaques and paperweights. No matter what you volunteered for, you were acknowledged in many ways.

Sandra Feliciano, Broker
She was the reason I attended the CAM courses and received my designation. I appreciate all that she did for our industry. She will truly be missed.

Wendy Henning
What a “gal”...she made me feel like a long-time friend. I will miss her personality and gracious nature.

Virginia (Ginny) Ball
I so appreciate Nancy’s help in coming to Whittier on many evenings to help me start the Whittier Apartment Association. It is still going strong, but it is with her help that we got it “off the ground!”

Alejandra Kostuch
Nancy, the lady that always had answers no matter what it was about.

Coy Herring, Past President and Director Emeritus Through Nancy’s tireless and brilliant leadership we endured, survived and flourished. Through her abundant friendship we all were rewarded.

John & “Bub” Pratt, Past
Board President (1993-1994) I remember when the Board asked her to be Executive Officer. I believe that was 1991 when Phil Dauk was President of the Board and I was Vice President. Nancy was a tremendous help to our Association. She wore many hats for us as editor of the magazine, legislative advocate and executive officer. I don’t know how she did it all. Not to mention herding 20 or so cats (Board of Directors). She is certainly missed by all. Our sympathy to Larry and the family.

Evelyn Arnold
What a loss to our industry and to the world! Nancy was one of a kind who was always fighting for the rights of the small apartment owners and others. May she rest in peace.

Kelly Geonetta,
R.E.M.S., Inc. To all the people that she touched with her smile. To her family and friends. Thank you.

Gina Trinidad
Thank you Nancy for all of what you have done and for all the times you fought for us. You will be remembered and prayed for.


This has been a wonderful 28 years journey with you. It has been said that a person who is passionate about what they do, never works a day in his/her life. I thank you for the opportunity to be one of those people.”
Nancy Ahlswede, 2012

When you wake up tomorrow and each day following think of what you learned from Nancy. Think of what you will do that she taught you that you will continue to do. Let her inspire us to do better. Let her energy, ability, and forward movement not wane.

Larry would often times say “One of the things that I loved about Nancy was that she was the smartest woman that I ever knew.” – Ron Kingston

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333 W. Broadway St., Suite 101
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(562) 426-8341

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