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Handover of Control Calms House Republicans

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One of those characteristics of the United States’ experiment with democracy that we tout as a shining example for the rest of the world is the peaceful transfer of power. The fact that every four (or eight) years a new President takes office via the voting booth and not by the tip of a sword or barrel of a gun is pretty amazing. Similarly impressive was the handover of control of the House Republican caucus (and by extension, the House of Representatives itself) last month. Due in large part to the fact that Rep. Paul Ryan (R-Wis.) was willing to take the job of Speaker, a potentially divisive vote within the caucus was avoided. He truly was “the one” who could unite the caucus and put a pin in the intraparty squabbling which dominated for the past several months. Now, let’s see how long he can maintain it.

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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!

Plans for the Future

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Late summer and early fall are typically busy times for us landlords. When you’re busy building your rental business or maintaining a smooth running business, it doesn’t give you a lot of time to think about the future. For those of us who have spent their working careers doing what we do and are at the point of finally being able to slow down a little, either because of retiring out of the business or turning over day-to-day management to our children or property manager, you have the luxury of reducing your stress levels and thinking about the future.

The future and how you can support the industry that sup ported you and your family is what I’d like to talk to you about. To the point, I want you to consider AACSC in your estate planning. As we go through life, we are supported in a number of ways. We get support from family, church, close friends and schools to name a few. Many of us also try to help the less fortunate through charitable giving.

If you worked for a major company like Boeing or GE, you’d probably never think about adding them to your list of beneficiaries and donating to them after you retire. When you are in our business, organizations like AACSC work tirelessly to help you succeed in your real estate business asking nothing in return—no share of your monthly income or profits from a property sale. You send AACSC dues that are used to provide you with services or to fight legislative battles for your benefit. That fight is ongoing. AACSC has been around for over 90 years.

AACSC has been helping landlords long before any of us got into the business and will be doing the same long after we’re gone. If you decide to leave your property to your children, to the church or to anyone your care about, they will be the ones needing AACSC’s help. AACSC could really use your help. Your beneficiaries managing your property will need our help. Can we count on you?

New Legistlative Challenges in Property Management

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It’s a new year, and with it comes many changes and new legislative challenges for the Association. We expect some remarkably bad bills we helped defeat in previous years to return this year. The list includes a proposed mandate that property managers accept Section 8 tenants. In addition to new legislative measures, a number of proposed State regulations affecting property management are expected to be voted on this year. During this time the impact of a new federal administration will unquestionably affect a broad spectrum of residents of our State.

Here’s a sample of what’s coming up this legislative year:

Democratic Super-majority: The results of the November 2016 election in California provided the Democrats with a super-majority in both houses of the Legislature. That means at least two-thirds of the 40 Senators and 80 Assembly Members are registered Democrats. That’s enough for them to approve tax increases, suspend legislative rules, pass urgency legislation, move constitutional amendments to the ballot, and overturn the Governor’s vetoes without any support from Republicans.

While the super-majority theoretically gives the Democrats vast powers to enact legislation of their liking, there may be a sufficient number of moderate and pro-business Democrats to provide a counterbalance on a limited number of issues in the progressive agenda. Still, it will be an uphill battle fending off the various anti-property management bills coming this year. It is evident this year more than ever: Association members must be proactive in calling their respective legislators to voice their concerns about the impact of legislative proposals on their business.

Section 8 Housing Bill: Last year’s awful Section 8 housing bill is coming back in 2017. As you may recall, the bill would force all residential rental property owners to participate in the Section 8 housing program. One of the adverse impacts of this proposal is to compel rental property owners to accept all Section 8 government-mandated lease terms and regulations—the manual of which is approximately 400 pages long. In the guise of pre venting discrimination based on “source of income,” the bill creates a special class of residents with more rights and fewer responsibilities than other resi dents. The significant administrative bur dens imposed on property owners who participate in the Section 8 program drive up costs and increase vacancies.

The Section 8 program is a voluntary federal program and should remain voluntary as intended under federal law. The bill unfortunately transforms this voluntary federal program into a mandatory one for thousands of California property owners, many of whom have legitimate business reasons for not wanting to participate in the program.

Price Control Bill: For the third legislative session in a row, a housing price control bill will be introduced. Commonly referred to as “inclusionary housing,” the price control mandates prohibit owners from setting the initial and subsequent rates on a percentage of their units. The bill will also seek to overturn Palmer/Sixth Street Properties L.P. v. City of Los Angeles, the case which upheld the Costa Hawkins Act exemption of newly constructed rental units from price controls. California’s much publicized “housing crisis” is beginning to be recognized (finally!) as caused by local and state government policies that stifle private capital investment.

Immigration Bill: The Association will be cosponsoring an immigration-related housing bill this legislative session. The bill would prohibit all government entities in all California jurisdictions from requiring rental property owners and managers from compiling, disclosing, reporting, providing or otherwise taking any action based on the immigration or citizenship status of a tenant or prospective tenant. The bill would also restate existing law that prohibits rental property owners from independently performing any of these acts.

The bill is an extension to a 2007 bill that was sponsored by the Apartment Association, California Southern Cities and the Apartment Association of Orange County which barred cities and counties from requiring owners to take action against tenants based on their citizenship. That bill came about in response to anti-immigration ordinances that were being introduced and adopted by local governments throughout the country. One such ordinance enacted by California’s own City of Escondido sought to ban rental property owners from renting to undocumented immigrants. Another ordinance, out of Hazeleton, Pennsylvania, sought to make it more difficult for undocumented immigrants to live and work in the city. The ordinances required anyone renting housing to obtain an occupancy permit for which only those lawfully present in the United States were eligible. The ordinances also prohibited property owners from renting to unauthorized immigrants and city businesses from hiring them. The 2017 bill will ensure all rental property owners and tenants are protected from these types of discriminatory policies.

We expect the introduction of over 140 bills this year that will affect property managers and owners. In future articles, we will feature other legislative measures that should be of great interest.

Multi-Family Rehab Loan Program

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The City of Long Beach offers 0% interest loans to qualified owners of multi-family rental properties consisting of five or more units located within the City.

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

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