My dad was a cattle rancher, my mom a farmer from Iowa. They had little experience with suburbia growing up. I, however was born in OakTown. Kaiser Hospital, Grand Avenue. Thankfully, they left that environment before my lack of pigment got me more than a couple of stiff beatings. That was back when “down and out” was good. No need for the .44 going off in your ear.
Having spent most of my life thereafter in country suburban settings, where “dogs run free,” I have never been exposed to real estate developments as a remote possibility for a residence.
I am a minimalist. My lovely and attractive wife is not. So now we live in a 5 bedroom 3 bath monster of a home in a brand new subdivision. I have a 60’ x 60’ lawn in the back. Like I need this at the age of 65.
At this age, I am retired from the 9-5. I keep some rental property in California, but we have moved to Washington State to be near my wife’s aged parents, and her siblings. I still write my blogs and keep my tenants happy, but it only takes a few hours a day. There are countless things to do in this playland of lakes, farms, parks, and trees. Especially with my 4 year old Lab buddy, Lexie.
The neighborhood homeowners’ association was recently handed down to the community, from the developer. Having all this extra time, and an interest in the community, I volunteered for service on the board. It was the best decision I’ve made up here.
There is so much to learn, and we do every day. It seems as though we are reinventing the wheel, as this has to be happening in thousands of developed communities across the land. We find new resources every day, and have diverese opinions regarding exactly how far an HOA should go to “maintain order.” My philosophy is to live and let live, just as long as the lawn are trimmed and nobody trys to paint their house bright red. Others on the board are far more “by the book.” There are rather obvious special interests that some of the members are sensitive to, and others that we just ignore.
Responsibility and enforcement are key issues that we continue to struggle with. Although the Community “covenants, conditions, and restrictions” or CC&Rs, spell out some guidelines, but the board has to interpret how literally we wish to enforce them.It’s harder to be objective when its your best friend and next door neighbor who has his panel truck parked in his driveway. But, if its OK for one, then its OK for all. There are issues with which we all agree, but are just too petty to inforce. Then there are others that simply get taken out of our hands. We agreed that the kids in our development could have those movable basketball hoops. I hate them, but the kids gotta do something, right. One of the members just would not leave it alone, and kept on digging. You know what, he was right! The County has forbidden it so it is now out of our hands. Who would have known. Now we have a set of rules that has been written down all along. That would have been nice to have tucked into the “welcome to the Board” kit we never got.
It is an evolution, but one I am proud to be part of. It does remind one to keep an open mind, and an active participation. I recently found myself in a development very near my house that did not put forth the effort to maintain these standards. Let’s just say that I feel the effort we are putting towards this is well worth it. We got one rock, and we all gotta live on it. Done blow it!
Mountain View voters will decide this fall whether Google and other businesses should be slapped with an employee “head tax” to help alleviate the traffic and housing problems that plague Silicon Valley.
The City Council voted unanimously late Tuesday to place a measure on the November ballot asking residents to authorize taxing businesses between $9 and $149 per employee, depending on their size. If the measure passes, the tax could generate upwards of $6 million a year for the city, with $3.3 million coming from Google alone.
But the city’s Chamber of Commerce, which opposed the decision, says it now hopes to persuade a majority of council members to lower the proposed maximum tax rates before settling on the ballot’s language.
The bulk of money raised through the head tax would pay for transit projects, including bicycle and pedestrian enhancements, and 10 percent would go toward providing affordable housing and homeless services.
Jesse Cupp, a Mountain View resident and chair of the city’s Visual Arts Committee, introduced himself to the council as a Google shareholder who favors a “top-heavy” progressive tax.
“Why shouldn’t one company pay the majority of the business tax if they are the one company that strains city resources the most?” he said. “Their impact on housing and traffic is disproportionately large compared to all other companies in the city, and they should cover the cost.”
The council chose to forge ahead with its controversial proposal just weeks after Seattle walked back a similar plan amid fierce opposition from local business titans such as Amazon and Starbucks. Mountain View Mayor Lenny Siegel noted that unlike Seattle’s proposal, which was primarily meant to ease homelessness, this one would benefit not only his city’s residents but also Google’s employees, who face the same transportation and housing challenges.
On Tuesday night, he again reiterated those issues well into a nearly three-hour discussion that culminated with the council’s unanimous vote.
“Our needs for transit are enormous,” he said. “We can’t rely on not only the federal government, but the VTA.”
While Google has stayed quiet on the issue, the Silicon Valley Leadership Group and Mountain View Chamber of Commerce have not. Representatives of both groups spoke against the tax Tuesday.
The Chamber’s Bruce Humphrey pushed for an alternate tax model his organization recently put forward that asks businesses with more than 1,000 workers to pay a flat $100 per employee rate. Some council members, including Vice Mayor Lisa Matichak and Councilman John McAlister, praised the plan’s simplicity, while others, such as Councilwoman Pat Showalter, criticized it for burdening small businesses. Humphrey noted that a benefit of the Chamber’s model is that it doesn’t stick one company with 60 percent of the tax.
The model the council ultimately approved would charge the city’s roughly 3,700 businesses a progressive flat rate based on their size and a progressive per employee rate. Businesses with up to 50 employees would be charged a base rate of up to $75 per year and those with more would be charged a base rate plus a per-employee fee that climbs with the work force’s size, up to a maximum of $150 each at Google, which employs a little more than 23,000.
On Wednesday, Chamber CEO Tony Siress said the business group would push to get a majority of council members to publicly commit to a base rate of $50 or less — to protect the smallest companies.
“This is just a new cost on top of high wages, high rents and all the costs of doing business in the Bay Area,” Siress said.
But Siegel said he doubts the Chamber will garner much support for a lower base rate, which the council had earlier proposed should be $100.
“We lowered it to $75 already, which I saw as a compromise,” Siegel said Wednesday.
During the Tuesday meeting, Councilman Chris Clark recommended that the council fine-tune certain elements of the plan, such as provisions for out-of-town and seasonal businesses, and suggested that the city continue engaging with the Chamber to come up with a mutually satisfactory iteration of the approved plan.
Mountain View’s current business tax has been in place since 1954 and is based on businesses’ square footage, which Siegel has characterized as “anachronistic as well as low.” Councilman Ken Rosenberg said he initially felt uncomfortable approving a tax increase until he realized just how outdated the city’s current rates are.
“We keep couching this as a Google tax, but it’s a business license update,” he said. “Business license fees are $30 and that’s weird. It’s weird because it hasn’t changed in decades. So that seems like a bargain frankly. It doesn’t seem like a tough sell.”
The head tax model already exists in San Jose, Sunnyvale and Redwood City. Cupertino city officials were considering a similar tax until last week, when they suddenly decided to wait and spend more time crafting a viable plan while engaging with the business community. The city plans to pursue the tax again next year.
In a survey of more than 900 likely Mountain View voters, 62 percent supported the head tax. Those who didn’t indicated that businesses should pay their fair share for fixing the problems they helped create.
The tax, to be phased in over two years starting in 2020, requires the approval of a simple majority of voters.
Staff writer Ethan Baron contributed to this story.
Q: I read your recent column stating that e-mail is no longer allowed as a way for HOA board members to vote. Our architectural review committee meets once a month to review and approve applications, but there are often “emergency” situations that arise where owners want approval between the monthly meetings. In these limited situations, would the committee members be permitted to vote by email to approve applications? (G.Q. via e-mail)
A: No. The Florida Homeowners’ Association Act does not permit architectural review committees to use e-mail to vote on the approval or rejection of members’ applications.
Section 720.303(2)(a) of the statute addresses board meetings, and contains the new provision that members of the board may use e-mail to communicate, but may not use e-mail to cast votes on association matters. In my opinion, this was already the law before the statute was changed to specifically say this.
The same subsection of the statute states that contains the requirements for board procedures also applies to meetings of committees making a final decision regarding spending association funds and the meetings of committees that approve or disapprove architectural decisions.
Architectural committees are also generally required to comply with the requirements applicable to the board for purposes of meeting notice posting and minute keeping.
Q: I am a unit owner in a condominium. The board has been discussing hiring a management company to oversee our community. This has been a heated topic at recent board meetings and many owners are concerned that the board may choose a company that may not align with our best interest. Do the owners have any say in this decision? (W.D. via e-mail)
A: Section 718.111(3) of the Florida Condominium Act provides that the powers of condominium associations include the ability to contract for the management of the condominium property. Section 718.3025 of the Statute lists certain provisions that must be included in management contracts, or the agreements may be unenforceable.
Most association bylaws confer all of the powers of the association upon the board, except where the statute or condominium documents require a vote of the unit owners. The statute does not require an owner vote to hire a management company and very few condominium documents do (though I do see it from time to time). Therefore, your board likely has the authority, unless the condominium documents provide otherwise.
However, this decision must be made at an open meeting of the board and the intent to enter into the agreement must be listed as an agenda item on the posted notice. Unit owners are entitled to speak at all open board meetings, so you do have a “say” in the matter, but not a vote.
Q: Our board recently approved an amendment to the annual budget. The majority of owners who attended the meeting were against the change. My question is whether the board can increase assessments and amend the budget without approval of the owners? (M.M. via e-mail)
A: Probably. First, you must confirm that the board of directors is given the authority in the condominium documents to adopt the budget in the first instance. This is the case in the vast majority of associations.
If the board is empowered to adopt the budget, it is empowered to amend the budget. However, any amendment to the budget must be done by following the procedures required for initial adoption of the budget. This includes, among other things, sending all owners a copy of the proposed revised budget and notice of the board meeting where the proposed revised budget will be considered. The notice must be mailed or delivered to each unit owner at least 14 days in advance and posted conspicuously on the condominium property 14 days in advance.
There is a procedure for unit owners to seek to “overrule” a budget adopted by a condominium association which exceeds the previous year’s assessments by 115%. Increases for non-recurring expenses and reserves are excluded from this computation. The process is, however, rather burdensome on the owners and I have rarely seen it employed, and never employed effectively.
As the Thursday deadline for approving items for the November ballot approaches, Republican supporters of an initiative to repeal the recent gas tax increase are hoping to hear an echo from another citizen tax revolt from 40 years ago: Proposition 13.
That measure, passed overwhelmingly by voters in 1978, significantly rolled back property taxes and placed strict limits on future annual increases on homeowners and commercial property owners. Some say it helped create the political climate that launched Ronald Reagan into the White House.
How do the politics of the gas tax repeal compare with those around Proposition 13?
“I think it’s very similar to Prop. 13,” said political consultant Dave Gilliard, who’s running the gas tax repeal campaign.
“There’s a lot of building anger among the shrinking middle class and those who have aspirations to make it into the middle class but can’t because of the high cost of living in California. And I think this ballot measure is an outlet for that anger.”
Compared with property taxes, which mostly affect homeowners, fuel taxes are “a broad-based tax that hits literally everybody,” noted GOP consultant Wayne Johnson. “So (compared with Prop. 13) it’s a much better motivator for people and it crystallizes people’s thinking because it’s easy to understand.”
Johnson, who worked with anti-tax crusader and Proposition 13 co-author Paul Gann decades ago and is now working for Republican gubernatorial candidate John Cox, said last year’s passage of the transportation measure SB 1 highlights how Democrats have contributed to the state’s affordability crisis.
“It’s a very easy, recognizable example of the failure of the last eight years. There’s been a lot of prosperity that’s forgotten millions of Californians,” Johnson said, adding that prosperity for coastal Californians allows Democratic politicians to “sip their chardonnay on the deck of their $4 million home thinking everything is fine.”
Johnson is hoping the gas tax repeal, if it qualifies for November, will help drive Republican voters to the polls.
There are similarities between the California political climate in 1978 and today, notably the large state budget surplus. Forty years ago the surplus was $2.9 billion, much larger as a percentage of the state budget than today’s $9 billion surplus. It led many Republicans then — as now — to say the state should refund the money to taxpayers rather than spend it.
However, Mark Baldassare, who heads the Public Policy Institute of California (PPIC), said the differences between then and now outweigh the similarities.
“Proposition 13 came at a time when Californians were very anxious, not just about the cost of housing but about the cost of everything,” Baldassare said.
By election day in 1978, the U.S. inflation rate was nearly 9 percent.
“There was a general concern about prices spiraling out of control and the economy being in a place where it was difficult for people to know what they were going to need to live on,” Baldassare said, because of both inflation and the lack of controls on property tax increases.
By comparison, today’s inflation rate is under 3 percent. And Baldassare said while housing prices have spiraled up quickly in recent years, leaving many unable to afford a home, “most Californians feel they are generally in good shape financially.”
PPIC recently released a study examining voter attitudes about Proposition 13 today. A majority of Californians (57 percent) and likely voters (65 percent) feel that Proposition 13 has been “mostly a good thing for the state.” Even among Californians ages 35 to 54, a slight majority think limiting property tax increases has been mostly a good thing.
Not all Republicans see the gas tax as this year’s version of Proposition 13. GOP consultant Rob Stutzman, who worked unsuccessfully to convince the Republican congressional delegation from California not to support the repeal, said the two issues are fundamentally different.
“The gas tax is simply unpopular,” Stutzman said.
But, he added, “It’s not costing anyone their home.”
He said polling he has seen suggests support for repealing the tax increase is in the low 50s, with opinion pretty divided on the cost/benefit analysis of raising gas taxes to fund transportation improvements.
“The problem with that thinking is this repeal isn’t wildly popular — it’s only moderately popular,” Stutzman said. “And it will draw a $30 to $40 million campaign, some of it funded by Republican donors like road construction and engineering companies, to oppose it. That essentially works against Republican interests.”
Stutzman adds there’s no evidence that the gas tax could help a Republican candidate running statewide — like John Cox — overcome their large disadvantages in voter registration.
Then there’s the current governor, Jerry Brown. In 2014, he told the Los Angeles Times that he’d learned from his failure to have a bank of campaign cash to draw upon to ward off political enemies.
Brown suggested if he’d had such an account in 1978, he could have used it to promote an alternative measure to Proposition 13.
Four years ago he told the Times, “There may be things to be done that will involve a ballot measure,” adding, “I do think having a credible war chest will overcome whatever infirmities lame-duck governors might ordinarily suffer from.”
He learned the lesson well. Brown’s political account is currently flush with $15 million — some of which could surely be spent to oppose the gas tax repeal if it qualifies for the ballot.
More than 60 percent of American households own pets, yet many landlords do not accept pets. As a landlord, accepting some species of pets may help you fill vacant units faster. What’s more, pet owners often stay longer (since it is difficult to find pet-friendly housing) and you can charge more for your properties.
Learn the upkeep and maintenance issues associated with different types of pets to decide what pets to allow at your rental properties.
Fish have a lot going for them from a landlord’s perspective, because there are few risks for property damage or complaints from neighbors over pet noise. Unless the fish tank breaks, there are no negative consequences.
Reptiles and Amphibians
Like fish, reptiles are quiet pets. Turtles, lizards, geckoes and even snakes can all make good pets. They need little care and cleanup and won’t make the apartment smell — unless the tenant neglects to clean the cage.
Some landlords are creeped out by the idea of a snake getting loose in the apartment. Case-by-case evaluation can help you gauge the pet owner’s responsibility and decide whether to allow the pet on site.
Hamsters, gerbils, guinea pigs, mice, rats and rabbits are all examples of small animals that renters might own. These pets are generally low-maintenance and quiet. If you’re concerned about the damage an escaped rat or rabbit might do — think raid the garbage or bite through electrical cords — require that tenants keep their small animals caged or in an exercise pen at all times.
Property damage and noise can be a concern with cats that scratch walls, urinate in the house or yowl at all hours. Nonetheless, cats can make great pets — it really depends on the animal’s personality. Collect a pet deposit to ward against cat damage. Do not request cat declawing since this removes the cat’s natural defenses and leaves the animal helpless.
While dogs make great companions, they can cause property damage. Pet accidents in the house can damage carpeting or flooring, while dogs can scratch at doors. To mitigate pet damage, you could require tenants to crate their dogs when they are out of the apartment. Provide a trashcan for the backyard so the yard does not become filled with pet waste.
Some landlords like to allow small dogs under the belief they will cause less damage, however, dogs of any size can be well-behaved or poorly behaved. Since many homeowners’ insurance companies refuse to insure when certain dogs are on site because they perceive these dogs are more dangerous than other breeds, you may wish to impose breed restrictions.
Breeds commonly disallowed by insurance companies include:
- Pit bulls
- Doberman pinschers
- Staffordshire terriers
- Chow chows
- Great Danes
- German shepherds
- Alaskan malamutes
- Siberian huskies
Consider your comfort level with different types of pets and the damage they may cause to decide what’s right for your rentals. When you use sensible precautions with allowing pets in rental properties, you can feel good about helping pet owners find safe homes and keeping pets out of animal shelters while safeguarding your rentals for the next tenant.
As an apartment operator, do you know what residents think amenities are worth? In this amenity crazed market, multifamily housing leaders need to understand what features like hardwood floors, appliances types – even a unit with a view of the swimming pool – mean to property performance and leasing.
Factoring key influences and property amenity valuations can lead to smarter decisions when setting rents for assets, industry professionals said in a recent webinar on the subject.
It’s not always an easy concept to wrap your head around but data science, drawn from a wealth of national lease performance information that reveals what residents are willing to pay for certain amenities, is helping to clear the picture.
Amenities come in three flavors: Rentable items not necessarily associated with an individual unit, building amenities like fitness rooms and pools; and amenities that differentiate units. Their value varies from one community to another and class, and is based on a number of factors that include competitor offerings, amenity quality, location, renter preferences in the market and seasonality.
The only true way to measure amenity valuation is drawing scientific conclusions based on the impact of leases on the rent roll, according to analysis done by RealPage. Ultimately, how quickly units with some or all of the bells and whistles move on the market and at what kind of rent premiums they generate – if any – determine whether operators are getting their bang for the buck.
Establishing how amenity valuations impact apartment leases, occupancy
Most amenities add value to a property but they can come at a price if they’re not the right fit. Their valuation should be assessed from time to time to determine if they effectively drive revenue, says Senior Vice President of RealPage Revenue Management Amy Dreyfuss.
“Generally, the share of total rent is attributed 5 percent of your rent roll, more in high rise at 9 percent,” says Dreyfuss, who has more than 20 years of experience in multifamily operations and revenue management and oversees RealPage’s LRO and YieldStar products. “What does it cost if you get the amenity valuation wrong?”
RealPage’s data science team has spent considerable time mining lease and amenity data from multifamily properties across the country to understand how amenities impact new, existing and rehabilitated assets or those targeted for acquisitions.
To establish a baseline, RealPage’s data science team has parsed thousands of pieces of information available from the company’s vast data warehouse of amenities listed by apartments of all types in various markets and submarkets across the country.
“The aggregation of data took a lot of work, pulling from a lot of property management systems,” said Rich Hughes, head of RealPage’s data science group.
Once amenity categories were determined, the team went about the business of comparing geographic locations, rents, lease-up times and many other factors to establish a baseline within given markets and submarkets.
Isolating an amenity type and determining value
Amenity valuation calculations examined price differences for units with an amenity versus those without, variation in leasing velocity for the differently amenitized units and benchmarked pricing for features at properties in the subject’s competitive community set.
With that analysis, clients can isolate an amenity type and determine its true value.
Hughes notes that an amenity may first appear to be something that a resident is willing to pay more for in rent, but the unit types, location and other dynamics ultimately determine value to the rent roll.
Sometimes outfitting units with a certain feature, like subway tile backsplashes, may be necessary to compete in a specific market. In other instances, it can be a perk that generates additional lease revenue and separates the community from others.
Also, the number of days on the market at a given premium is a key indicator. For example, higher-priced units with fireplaceslanguish compared to those that rent quicker without the amenity reveal the worth to the resident.
Dreyfuss said lease transaction data revealed for one client the impact of wood-style flooring. Over a four month period, units with the flooring leased on average 19 days faster than similar units without the amenity.
“It’s a pretty significant difference,” she said. “The purpose of amenity pricing is to normalize demand. This is a clear indication there is opportunity to increase the value of this amenity.”
Hughes notes that the study showed 435 similar leases for wood-style flooring with average price point of $18 dollars that were vacant 25 days before being leased in the same market.
“That can be an associated value of what can be charged for wood floors.”
Preferred unit amenities and achievable premiums vary considerably from one metropolitan area and specific neighborhood to another as well.
Getting a premium for the ability to do laundry in an apartment in Texas, Oklahoma, New Mexico and Colorado is more realistic than other states because data shows that’s what residents there prefer. The same goes for ground-floor units in Nevada, Louisiana and South Carolina, whereas renters are willing to pay more for higher floors in the Michigan, Kentucky, Alabama, Mississippi and New Mexico.
Too much of a good thing can lessen the impact of amenities
The arm’s race for amenities is surely to continue,especially in renovations. They are a great way of telling the story of a unit through listings and other marketing efforts right down to the finish on kitchen appliances. But operators should be cautious not to over-amenitize, Hughes said.
“The data we’ve seen shows there comes a point that too much amenity load on a unit is bad for it,” he said. “That being said, a small bedroom in an urban area with great views on the top floor, I would fully expect that to have a really high amenity package.”
But, too much of a good thing can just add costs that can diminish the return on investment, especially when working determining styles of appliances and other amenities.
“As with most things, being in the middle of a pack in terms of amenity structures seems to be fairly safe,” Hughes said.
He added that trying to be the leader of value-adds comes with its own sets of problems.
“I would encourage having a diverse offering and tell your story because not everything is right for everybody. But not every amenity is for everybody, so preferred amenities can go for a premium. If you find one strongly favored you might want to have an upcharge for that.”
And only the data science of amenity valuation can help determine that.
See how RealPage is helping simplify the lives of property owners and managers by providing the data they need to make smarter investment decisions. Learn more about RealPage Revenue Management here and RealWorld sessions specific to amenities here.