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The residential rental housing industry is under assault. Politically. Economically. Morally. Socially. The wide-spread negative narrative juxtaposed with California's "housing crisis" has put residential rental property owners in the cross-hairs of complaint akin to the Robber Barons of the Old West. From city council chambers to the legislative halls of the Capitol the chorus of claimed avarice and greed follow in the wake of anecdotal examples of a few outlier's excessive rent increases. The aberrant actions of a few have unnecessarily tainted the entire rental housing community. It brings to mind a favorite Pogoism: "We have met the enemy and they are us."

A number of very significant legislative proposals have surfaced in the wake of this industry criticism. We will report on these from time to time as the session heats up with committee hearings and floor votes. And we will look to you for grass roots support through active response to appropriate Red Alerts. While important in and of themselves, they pale in comparison with the most significant challenge facing the industry in the last 20 years: a proposed ballot initiative coined the "Affordable Housing Act" that would gut the Costa-Hawkins Rental Housing Act, thereby paving the way for local enactment of strict forms of rent and price control on all rental properties.

The proponents organized under the banner "Coali­tion for Affordable Housing" have amassed over $1 million and collected the 25 percent signature threshold as of the end of February. It is expected that they will spend whatever it takes to get the ballot initiative qualified for the November 2018 statewide ballot. They have until June 25 to collect the 365,880 signatures needed to qualify for the November General Election.

It is past time for individual rental property owners to be complacent about the events and circum­stances surrounding this industry. Our Association is certainly not taking the important issues of the day lying down. We have and will continue to develop and implement a comprehensive action plan to actively oppose this proposed initiative. Every day we will be initiating or participating in worthwhile activities to inform our members and the public the actual and practical impact of the ballot initiative:

  • On single-family homeowners that could face rent and price control mandates including the neces­sity to argue before rent boards for fair return.
  • On renters who unquestionably will find it extremely difficult to find replacement housing.
  • On property owners and renters when 58 coun­ties and over 482 cities can define and implement a confusing array of rent control ordinances, charter provisions or regulations.
  • On businesses, including the financial markets, and government.

Notice to owners: Get involved. Support your Asso­ciation's political activities and educate yourself about the major issues of the day. Join MCSC's grass roots campaign against the proposed initiative. Talk to your friends and neighbors and local political representatives. Most importantly, talk to your residents. Let them know you are a faithful steward of your property and their well being. Look at their circumstances from their viewpoint. Many, if not most, tenants are there by choice, not circumstance. Also, but not last, contribute financially to MCSC's efforts to derail or defeat the proposed initiative.
Yes, the issue is one of the biggest we have faced in some time. Are you ready to step in with both feet and help us?

We Honor Nancy Ahlswede

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Nancy Ahlswede

We honor Nancy Ahlswede who passed away December 14, 2016.  Nancy was the Executive Director for the Apartment Association, California Southern Cities for 28 years. Her passion for the industry, drive to protect landlords, owners, property managers and property management companies went beyond the boundaries of her job.  Nancy wrote the book on how to get legislation through all the red tape in Sacramento and was known throughout the region for her tenacity and drive.

Nancy served on many committees and was a constant presence at the City Council of Long Beach, where she spent many hours working with the City Council representatives to understand the multi-family industry.  In the words of one of our members who knew her well, she writes, “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 and housing industry both for owners as well as for tenants.  Her amazing knowledge combined with strength in getting things ‘Done,’ and warmth with a sense of humor,  always provided anyone interested in seeking a career in property management the understanding of how great serving people truly is”.

Her legacy will live forever and she will be greatly missed.  As we plan to honor her, please watch our website and Facebook for updates.  The Association will also be dedicating the February magazine to her memory.  Please send the Association (at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) any comments, pictures or memories you have that you would like to share for this special lady. We've lost a warrior.

Housing Affordability

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White House Toolkit Points to Local Barriers to Affordability Crisis

In September the Obama Administration weighed in on one of the seminal issues impacting local communities and one with which our industry finds itself struggling again—housing afford ability.

What might surprise you is that the message from the White House was not directed at property owners. The Housing Development Toolkit (avail able on the whitehouse.gov website) opens with this: Over the past three decades, local barriers to housing development have intensified. The accumulation of such barriers—including zoning, other land use regulations, and lengthy development approval processes—has reduced the ability of many housing markets to respond to growing demand.

The toolkit discusses in specific detail the costs that these barriers impose on local households, the economies and even the environment as well as their role in exacerbating gentrification and income inequality. This is a welcome message from the Administration.

As many of you are experiencing firsthand, the issue of housing affordability increasingly dominates local news and policymaker debates. Beyond the statistics, low- and moderate-income families struggle to find housing that meets their needs at a price they can afford. This is an issue in the usual suspect markets on the coasts, but also in places like Austin, Texas; Nashville, Tennessee; and Colorado Springs, Colorado.

While this current crisis is not breaking news, the scale and scope of the problem seem greater than in previous cycles as does the intensity of the advocacy efforts by tenant-rights’ organizations.

Last month a few NAA affiliate offices and events were picketed by protesters and, in one case, an Association Executive was personally the target of an advocacy campaign. The White House efforts could not come at a better time.

What many advocates seem unwilling to acknowledge is that the seeds for our current crisis were sown long ago in local land development and use policies. As the Housing Development Toolkit notes, when the recovery from the 2008 recession began, many communities were not positioned to take advantage:

In a growing number of metropolitan areas, the returning health of the housing market and vibrant job growth haven’t led to resurgent construction industries and expanding housing options for working families, due to state and local rules inhibiting new housing development that have proliferated in recent decades.

There is also of course the added complicating factor of stagnant wages. No- or low-wage growth is hard enough in markets where demand is “normal.” It is downright dangerous in the growing list of markets where exorbitant development costs and red-hot demand accelerate rent increases.

The toolkit goes on to describe a number of excellent policy options available to local governments to streamline the development process and increase apartment housing supply. Nearly all are positioned as incentives to development and even mandatory inclusionary zoning is described in both mandatory and voluntary terms but the toolkit’s recommendation tilts more towards voluntary incentive for IZ like density bonuses or streamlined approval processes. Rent control is not on the list of policy recommendations.

While not on the list of policy recommendations, the toolkit does make a case of sorts for source-of income protection for Section 8 voucher holders, characterizing a property owner’s choice not to participate in the Section 8 program as “discrimination.” We will continue to respectfully disagree with the Administration on this and stand in support of the freedom of a private owner to take on the responsibilities, and burdens, that come with accepting Section 8 vouchers. NAA has been a vocal, aggressive champion of this program for decades, including its voluntary nature.

Also missing from the toolkit is a strategy for fighting NIMBYism (Not in My Back Yard) that pervades in so many jurisdictions. Truth-be-told, many of the hurdles put in the place of apartment development were put there by NIMBYists who would sacrifice anything to prevent more supply of apartments. More and more local governments, with help from private sector employers, non-profit organizations and others, are standing up to these forces. Those efforts must be replicated around the nation if we are ever to make a dent in this affordability challenge.

Nothing in the toolkit is earth-shattering; however, the focus and emphasis it places on local governments and their central role in the affordability crisis are extremely important. Our hope is that local governments listen and future Administrations make the same commitment.

Make sure to mark your calendars for the 2017 NAA Capitol Conference and Lobby Day on March 7-8, 2017. Our goal is to create another record-breaking event, bringing in more advocates to reach all 535 members of Congress. Registration opens in early November.

Greg can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 

 

 

It's Not Over Til It's Over

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Many experts on both sides of the political aisle know full well that our great State’s utmost economic threat right now is the crisis in our housing economy. We mentioned recently about how some laws are just cleverly named but end up doing the opposite of what they are titled, and although I believe that all Americans (all people worldwide, actually) should have a basic healthcare plan—as well as a basic investment, time management, career, education, and retirement plan, too—there is no doubt that the “Affordable Care Act” has indeed not achieved what it was titled. No matter how you feel about the ACA, there is no denying that prices skyrocketed following its inception. Although it made it more affordable for some people, it has not come close to achieving the level of care promised and it pushed prices out of reach of others. It’s much more of a burden for the public than a benefit, and certainly we can do better.

This is the same type of a play on words we are up against now for the “Affordable Housing Act” now being considered across the State, which is the repeal of the one thing keeping current rent controlled cities afloat—the Costa-Hawkins Rental Housing Act. As many of you know, Costa-Hawkins allows vacancy decontrol. It keeps rent-controlled cities from directing pricing on vacant apartments, keeps cities from being able to include condos and single-family residences into the ordinances, and keeps from adding properties built after February 1995 from becoming part of a “rent stabilization ordinance.” The latter is one of the most important details of Costa-Hawkins because it keeps new development on the table. Our problem is not a price control problem; it’s a supply problem and a ton of red tape to jump through from city to city to keep development moving forward.

It is no wonder that the NAACP, California Community Builders, United Latinos Vote, California Senior Advocates League, American G.I. Forum, Howard Jarvis Taxpayers Association, and CalTax (just to name a few) are all against this repeal and rent control initiatives themselves. It hurts who they want to protect, especially minority communities.

The State and cities really need to make up their minds on what they want to do if they plan to allow an increasing number of people to live/migrate here. If they don’t want to turn people away, then they need to unlock the bottleneck of new development to make a place for new settlement instead of punishing housing providers and current residents by making it impossible to find quality accommodations at an affordable price. I love our melting pot here in LA and I would love to see it expanded, but this isn’t the way.

The repeal of this law (and really the current allowance of rent control to be initiated in cities has been and) will continue to hurt families, workers, and businesses—most of which are the people who it aims to protect, along with the newcomers who are risking a lot moving here.

Look no further than what is already happening in rent-controlled communities to the union workers and specialized tradesmen/women due to those ordinances even with having the ability to increase market rents on a vacancy: Minimum work and purchases (spending by the housing providers) for the upkeep and remodeling of apartments. This affects maintenance supply stores to the workers themselves as well as their office teams—schedulers, billers, and the like. It limits the work of painters, plumbers, electricians, suppliers, builders, pest control companies, gardeners, tax in come for the city, and more—which is not the goal of rent control, but the repeatedly proven reality. This goes much deeper than it seems most of these pushers of the wrong kind of change care to look at. They are taking this at face value—the name only—and making very incorrect assumptions that have already and will continue to reinforce the unintended consequences raining down on our people and economies.

Don’t let this happen. Spread the word and prepare to get out the vote; this is going to be a fight that none of us can afford to lose because it affects every facet of our economy. Keep abreast of what’s going on as well as keep engaging with our Association and PAC. Donate today to help the fight—we all need to get ahead of this before we allow it to destroy our economy and the many pains that will surely follow.

April 2018

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Unless you live under a rock, and I highly doubt you could not have heard it there too, we have all heard about the Rent Control ordinance that is being circulated around Long Beach AND the Statewide Rent Control issue that continues to threaten the repeal of Costa­Hawkins. I want to thank all of you who have called to ask questions. Neither of these issues are good for our industry-this includes our tenants. As such, I encourage you to take time to get informed and educate yourself on what could be in store if this passes. NOW is the time to get involved. If you have not renewed or joined AACSC, I encourage you to do so TODAY.

Nevertheless, we want you to know that AACSC is fully engaged at all levels. We are working with Realtors, CAA, PacWest and SPOA and will continue to do so on your behalf. Your voices will be heard and AACSC is involved.

There is no more time to sit on the sidelines-the time in NOW and AACSC is the right Association that has the only local, statewide and national connec­tions as we fight to protect your property rights.

Now, let's move on to the 12th Annual AACSC Golf Tournament. If you have not already secured your spot, I would highly recommend that you contact us today. We are looking forward to another sell out and a great day on the links. Of course I want to thank our sponsors for their continuing support of this great event. This is a terrific way to thank your best customers, talk with potential new customers or use it as a way to thank your business partners, staff or just have a great day on the links. I am waiting for your call.
Finally, last year we held an Apartment Repair & Maintenance Series of classes that was extremely well-received and we are having another one this year (see page 40). You don't want to miss this series of four classes and the best part about it is that it is a "hands on" course. So if you have crew who like to hammer, bang, build or fix stuff-this is the series of classes for them and we guarantee they will all walk away with information they can use on your properties. Besides, it is a great way to relieve stress. The classes can also be taken individually.

Finally, April is time to talk about all the NEW laws that are being considered for 2018 so we look forward to making sure that you stay informed. To that end, we will be updating you each month as we find out more information. For now, we are encou­raging you to contribute to the PAC so that we can effectively fight the rent control ordinance here in Long Beach. Don't forget to read our weekly e­newsletter, The Beacon, to learn about all the educational classes we have scheduled and see you this month at Sea Cliff Country Club for a day of golf. Even if you don't golf, you can attend to bid on all the great auction items and end the day with a great din­ner with friends. Either way, we want you there!

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Contact AACSC

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California Southern Cities
333 W. Broadway St., Suite 101
Long Beach, CA 90802
(562) 426-8341

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