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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.

Capitol Conference Advocacy Hits Critical Apartment Concerns

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On March 8 and 9 NAA will host its annual Capitol Conference and bring before Congress some of our most important issues. I say some because there are of course many, many concerns about which we would love to bend a Representative or Senator’s ear. To really be effective, however, we have to hone in on a couple of topics. This year those issues are reform of the Section 8 program, enabling a right-to-cure period for alleged violations of the Americans with Disabilities Act (ADA) and reform and reauthorization of the National Flood Insurance Program (NFIP). Here is how we arrived at this particular list and why you should care.

Selecting issues for Lobby Day is complicated. First, you must identify topics that are of actual concern to the industry. Second, it’s preferable for the issues to come with a specific “ask” or request to take action. “You should support apartment housing” is great but “You should support apartment housing by sponsoring this legislation” is better. It gives Members of Congress a specific action and allows us to track whether or not they agreed to our request. Finally, speaking to issues that are moving in Congress makes us timely and more likely to be on the radar.

All three of the 2016 Capitol Conference issues hit close to home for a significant portion of NAA members. For example, many members interact with the Section 8 program in some way, either by choice or by local mandate. The program, while critical to affordable housing, can be extremely burdensome for owners and reform is something on which the apartment industry has been working for over a decade. There is bipartisan legislation on the table that mitigates some of these burdens. The House of Representatives has already passed the bill with NAA’s support. We need to thank them and prod the Senate to take action. This benefits owners who participate in Section 8 now and in the future.

Compliance with the ADA is a central part of every apartment owner’s regulatory life. As our members strive to create and maintain accessible communities, they encounter complex even conflicting guidance. As well, there are differing opinions on compliant design and construction standards as well as the role of proven alternative methods of achieving accessibility goals. This results in lots of litigation. A growing trend is litigation initiated purely for financial gain and not to increase accessibility. Our view is that the focus ought to be on curing design or construction defects not generating settlement fees. To that end, we support bipartisan legislation to allow for up to 120 days to cure an alleged ADA violation before litigation can be initiated.

According to the National Severe Storms Laboratory, flooding causes more damage and takes more lives than any other kind of severe weather-related event. Losses average $5 billion per year. Multifamily structures face significant, unique challenges when it comes to mitigating for flood damage. And, while most multifamily mortgages require flood insurance coverage, there is a lack of affordable, private coverage in the marketplace. As a result, the NFIP is critical to managing risk and protecting multifamily investments. The program expires in September of 2017 and is in need of reform to ensure its long-term financial viability, increase its effectiveness for multifamily owners and reduce exposure for the taxpayer.

Though expiration of the NFIP is 18 months off, the Congressional calendar between now and then is not our friend. Being an election year, we essentially lose the latter half of 2016 for any real legislating. Likewise, next year a new Congress and Administration will be getting settled which also will cost at least the first few months of the year. There is bipartisan, bicameral legislation on the table right now that we need to support to keep the ball rolling on NFIP reform and reauthorization.

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

 

 

 

 

Spring Cleaning

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Spring Cleaning, Maintenance, and Organizational Tips Ahh! The wonderful smells and sights of Spring popping up are the things I really look forward to each March—well, here in Southern California anyway where we typically get better seasons all year ’round. We all know this is the precursor to Summer being here, which is what we can’t wait for — long days, late sunsets, kickbacks and campfires, more sun, and more fun. But, of course, we cannot relax for too long otherwise the metaphorical weeds of life will certainly take over and choke out the good in life we’ve been nurturing. The same is true for your properties... and landscaping, of course.

Spring cleaning isn’t just for your storage rooms and garages. My friend and CEO of Sky Properties, Kari Negri, brought to us not long ago a nicely detailed monthly “laundry list” and I am happy to revisit some of that here this month.

Hopefully you’ve already renewed business licenses and rent registrations for the City of L.A. and elsewhere as needed, and don’t forget to make sure PRHIP Registrations are up to date as well for Long Beach. Most of us are on top of the fact that this is an excellent time to make sure our lawns are reseeded and maybe a touch of some new flowers are added to our landscaping, but did we also make sure to get laundry providers or the maintenance team to get behind those dryers and clean? What about getting an approved vendor up on the roof to clear gutters and debris? Check out our 2018 Vendor Sourcebook for help with anything, and don’t get up on the roof yourself unless you are trained and qualified.

I know one of your favorite things to do is to make sure your business tax returns are filed by March 15th… or is it? Either way — that’s when they are due, so we need to hustle if we aren’t ready now. March is also a good time to get decks resealed (provided they are dry) as well as schedule annual Smoke and C/O Detector inspections. And, since we are not the only ones with Spring Cleaning to do, it would also be wise to check properties for fall/trip hazards in walkways; and to also make sure, if you still have timers on your exterior lights, that they are updated accordingly. We went to photo cells at all our properties and the benefits have been fantastic - the cost was inexpensive, nobody has to go back to or charge the property unnecessary fees to make the simple timer change, and then there are no complaints because the lights are always on and off when they should be. Win/win… and we have vendors for that, too!

Some other things to organize within your businesses are getting your Team’s vacation times in order for the summer as well as to make sure everyone is on track for any benefit open enrollments that need to happen.

Lastly, I want to remind everyone about Legislation (“Leg.”) Day in Sacramento. This is such a great experience and if you haven’t done it before, you need to add it to your bucket list. Just going through the halls of the Capitol Building with all the rich California history is one thing—and we have certainly come a long way from when the first Legislature convened in a two-story adobe hotel in San Jose—but getting to see the process, being a lobbyist for the day, and participating in real democracy within our Republic just gives you a healthy boost of pride in our State and Country. Please join the AACSC for this trip to NorCal; make your voice be heard directly by the ears of our great legislators and come and experience this impressive event on April 10th and 11th, 2018. Contact us right away for details and I cannot wait to see you there!

February 2018

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I want to begin this month by thanking our members for all the phone calls, emails and questions regarding our ongoing effort to fight the battle of Rent Control and repealing Costa-Hawkins.

We the People


Three words that, with your calls and testimony, translated into the defeat of AB1506. Your voices were heard!

Thank You

But the fight is not over and we continue to need your attention as we move into 2018. Here are some Top Tips for what and how you need to be involved this year to support our Association and the multi - family industry:

  1. Red Alerts – Call, email and respond as requested. This DOES make a difference!
  2. Calls to Action – This could be alerting you to an issue or important event where you can make a difference.
  3. Contribute to the PAC – This is how we support those elected officials who may be on important committees in Sacramento and local electeds within our territory.
  4. Contribute with unrestricted funds to AACSC Funds within this category may be used for postage, creating flyers, letters, sending email, etc.
  5. Stay alert – If you hear of something happening, we need to know so call us.
  6. Help us with our membership. We know that there are many owners who are not members, yet they are benefitting from all the work being done on their behalf. If you know someone who is not a member, please encourage them to join. We need all the voices and strength working together to fight these threats; i.e., Rent Control, Just Cause Eviction, Jury Trials…
  7. Attend our Membership Meetings and bring a friend.
  8. Attend AACSC Events – This is a great way to introduce non-members to the benefits that we offer.
  9. Educate – AACSC is the best place to learn and grow in the multifamily industry. Offering both classroom courses, National certifications and online classes for those who can’t leave the office.
  10. ASK US! If there is something we haven’t covered, call and let us know you want to be involved, we are always looking for those who want to be included.

Limited Housing Supply and Costs

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Overview

Rental property owners and developers are easy targets to blame for California’s newest round of housing affordability issues and shortages. It is unfortunate because the misguided blame may lead to significantly harsher regulations over the industry in the coming years—regulations that will likely serve to perpetuate and exacerbate the problem in the long run.

California’s Housing Shortage and Affordability Problems

The problem is well documented. California does not have enough housing to meet demand. In fact, according to a recent independent report by the State’s Legislative Analyst’s Office, the State produces 100,000 fewer housing units than is needed to meet demand.1 Supply and demand economics are therefore in full force here in the State. When everyone is competing for the same limited supply of housing, costs are going to go up.

But supply and demand is not the only driving force creating affordability and shortage problems. Community resistance to housing, stringent environmental policies, lack of fiscal incentives for local governments to approve housing, limited land, lack of incentives for developers to build, burden some government regulations, long and difficult permitting process, and the high cost of building all serve to constrain new housing construction.2

And it is not just the popular and dense coastal urban areas of California that are impacted by the current shortage. As people get priced out of major cities, they begin to migrate inland; ultimately creating a supply and demand problem that in creases housing costs, rents, and prices in sub urban and other inland areas.

The shortage and affordability issues create widespread problems for all Californians, and those seeking to move here. Rents become unaffordable for more and more people. People are forced to move further away from where they work, or move out of state completely. It discourages people from living in California, which not only impacts the State’s economy, it keeps California businesses from attracting the most qualified people to work for them. Rental property owners also feel the squeeze because local governments and State lawmakers begin passing laws aimed at regulating the rental and construction industries.

What the Experts Recommend

In 2015, the Legislative Analyst Office (LAO) provided recommendations to the California Legislature about how to begin addressing California’s housing issues. In sum, it told the Legislature that it needed to pass laws to help facilitate the development of market rate housing in coastal areas. The LAO followed up with a report in 2016 after certain tenant advocacy groups expressed concerns that building market rate housing will not help low-income tenants, and that the Legislature should focus on regulations that help low-income tenants, such as stronger rent controls. The LAO’s response was swift and clear:

“Many housing programs—vouchers, rent control, and inclusionary housing—attempt to make housing more affordable without increasing the overall supply of housing. This approach does very little to address the underlying cause of California’s high housing costs: a housing shortage. Any approach that does not address the state’s housing shortage faces the following problems.”3

The LOA went on to state voucher programs, rent control and inclusionary housing programs only help select few, while doing nothing in terms of addressing the real problems. Forcing rental property owners to provide below market rate does not reduce or eliminate competition, the driv ing force of supply and demand economics. More over, forcing owners and developers to provide below market rate rentals ultimately discourages development and improvement of rental property.

Government’s Reaction to the Housing Problems

So how have the State and local governments responded to the housing shortage? To begin with, in 2017, the Legislature introduced over 130 housing related bills, nearly 50 percent more than typical legislative years. Among the bills are ones that help generate funding to build affordable housing and remove obstacles to development. Then there are the ones that seek to regulate the rental property ownership and development industry.

On the supply side, a few bills are aimed at increasing funding to build affordable housing. ACA 11 (Caballero) imposes a quarter per cent sales tax to generate yearly funding for middle-income earner housing. SB 3 (Beall) is a 3-billion-dollar one-time State general obligation bond to build and rehabilitate low-income housing. SB 2 (Atkins) would impose a $75 fee on all real estate recordings (with the notable exception that the fee would not apply to a single-family home sale), which in turn would generate a regular stream of funding for affordable housing. While these bills promote development of housing, none of them increase market rate housing.

On the regulation side, there appears to be a target on the backs of rental property owners, managers and developers. Both on the State and local level, rent control is on the agenda. Despite consensus among experts that rent control does nothing to solve the State’s housing supply problems, and actually leads to the development of fewer homes, and homes remaining off the market, lawmakers continue to target rental property owners for regulation. AB 1506 (Bloom) is probably the worst bill in years.

It essentially allows all cities and counties in the State to adopt the strictest forms of rent control on all types of housing. Currently, under the Costa-Hawkins Act of 1995, newly constructed units and single-family homes are protected from rent control. Moreover, owners of controlled units are able to raise rents to market rate when a vacancy occurs.

Bloom’s bill would remove all of those protections, allowing local governments to control even vacant units (a form of rent control called “vacancy control”). Owners would be required to keep their rents artificially below markets forever.

Rent control, especially the most severe kind like vacancy control, makes building rental units cost prohibitive. Owners cannot make money off of them, so investors stop investing. Owners of current rental units eventually get out of the rental business because renting property be comes unprofitable. Ultimately, rent control increases the housing shortage problem, which then in creases competition and costs, and makes housing even more unaffordable. It also encourages legislative bodies to adopt additional restrictions on rental properties.

Assembly Member Bloom has since pulled his bill back for this year, but promised to bring it back next year with some amendments.

Several members of the Legislature that seek to repeal the Costa-Hawkins Act or amend the Act to severely injure the important aspects of the Act join Assembly Member Bloom. Tenant groups are using AB 1506 as a plat form to organize and demand changes in several laws.

Inclusionary housing mandates are also back on the table. Inclusionary housing mandates force developers to build affordable housing units as part of a larger market rate development without the requirement of the government providing density bonuses or sufficient cost offsets. Without offsets, the costs associated with the “affordable units” are borne by the property owner and possibly the other tenants.

Again, the more burdensome development is, the less investors are inclined to develop. These kinds of mandates, as noted by the LAO, do nothing to address the housing shortage.

Locally, there are several communities considering adopting rent control regulations to address affordability issues. Rent control is a hot topic, promoted by well-organized tenant advocacy groups. It will continue to be discussed, and ultimately, some communities will cave. Communities that ordinarily would not have given a second thought to regulation a few years ago have recently considered rent control. Concord and Burlingame are just two of many examples that considered rent control. Other cities are “strengthening” rent control laws.

This past April, the City of Long Beach considered adopting an ordinance that would permit every tenant to use the same credit report for 90 days. One significant explanation to adopt the ordinance is the cost of credit reports is simply too expensive.

If rent control and inclusionary housing mandates have not captured your interest, the State administration, notably the Department of Fair Employment and Housing Council (DFEHC) has proposed three significant regulations that should affect every property owner and manager.

Occupancy limits have not changed in decades. If the DFEH draft regulation becomes law, owners and managers could not discriminate against tenants that want 15 occupants in a three-bedroom, nine occupants in a two-bedroom, and six occupants in a one-bedroom rental unit. Owners would no longer be permitted to advertise that a rental unit has a living room, dining room, and kitchenette because those rooms could be used as a bedroom.

The second draft regulation would sharply limit an owner’s/manager’s ability to refuse to rent to previously convicted felons. Our concerns are legitimate.

We are liable and subject to forfeiture and nuisance abatement laws for criminal activity on our property; we have the “unequivocal” right to deny registered sex offenders to “protect a person at risk or for some other reason.” We have the legal duty and moral obligation to keep tenants and property safe. And on top of all of this we would be required to understand how to consider a new legal standard… we would have to establish a legally-sufficient justification relating to criminal history information by proving that our screening standards are substantial and legitimate and nondiscriminatory without any guidance as to what those terms mean. We would even be required to understand the “nature and severity” and the appropriate amount of time that has passed since conviction and we are not given any specific guidance as to what those factors mean.

Finally, one very topical issue DFEHC is considering is adopting a regulation concerning emotional support animals. Unfortunately, the proposed regulation does not curb rampant support animal fraud. It does not adequately address verification requirements including: 1) assessment by a licensed medical or mental health professional; a prescription by a licensed professional; the need for the animal does not need to be current; and 2) the verification process does not discuss what additional information an owner can ask for and from what sources. The vagueness is concerning because of risk of asking the wrong question and the potential for a discrimination lawsuit. We are also very concerned that the draft regulations do not adequately consider the quiet enjoyment of other tenants, nuisance issues, and the safety and health of other tenants.

Rent control, price control, affordable housing mandates for new housing, tenant screening, use (or abuse) of credit reports, and occupancy limits represent just some of the major issues we are confronted with today. We hope you will join us in supporting the industry.

As one notable industry leader has said: join us at the table or you will be on the table.

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