How Property Management Leaders Can Achieve Better Work-Life Balance

By Alex Osenenko –

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Growth Opportunities: The Iceberg Report

Right now in the United States, there are about 22 million single family rental homes and multi-family rental properties that have up to four units. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This offers a vast opportunity to the 32,000 small or mid-sized property management companies.

There are a lot of social and economic factors that keep rentals in high demand. Over the next five years, about 8 million single family rentals will come into the professional management market. The opportunity is clear, and to take advantage of these opportunities, it’s important and necessary to establish trust between property managers and landlords and investors. This is one of the divides that’s keeping property managers from growing and acquiring new business. To effectively win all the new business that’s available in local management markets, property management companies need to demonstrate their value and give landlords and investors who have been managing on their own a reason to trust that their properties are better off with professional management.

Tony LeBlanc and the Need to Establish Balance

Any problem in an organization can be traced to the top. If the leadership is off balance, the team will never reach its potential. The CEO’s mood or the director’s attitude affects the team. Tony LeBlanc is a successful property management entrepreneur, and he made the choice to balance himself and his team to achieve better results. The business is growing and thriving because of his efforts. He spoke to Alex about the need to balance personal and professional goals, and why it matters to property management executives.

Tony is from New Brunswick, Canada. He owns and operates a property management company, Ground Floor Property Management, with three locations, and he’s been in business for eight years. He was born into the field; as a child he lived in a building where his mother was the resident property manager. Tony worked in the technology field after college and began investing in real estate. Then, he got back to property management and built a company that went from 0 units to 1,000 units in two years.

Advice for Fast Growth: Call Everyone

This type of fast growth came from calling everyone he knew. Tony called all the Realtor friends he worked with previously and used his relationships and connections to quickly establish himself. There was a snowball effect from picking up the phone and letting people know he was in business. Property management is a people business and a relationship business. It’s hard to earn new business sitting in the office. Go out and meet every Realtor in town and anyone associated with the rental business. Connect and create relationships to increase the amount of business you’re doing.

Fourandhalf note: We were at the recent Inman Connect San Francisco 2017 – Real Estate Conference, where high-powered real estate agents meet to stay ahead of the industry. Of the real estate agents we spoke to, the majority of them did not have a relationship with any of the property management companies in their community. It is important for property management owners to be aggressive in conveying their value propositions to people like real estate agents, where there is a great opportunity for a mutual partnership.

Balance and Confidence – Define Your Property Management Purpose

What does it mean when Tony says the property management industry is off balance? When you study this industry, you see a lot of the same trends. It’s chaotic and stressful and busy. There’s a lot of negativity associated with the work, and that negativity often comes from the property managers themselves. There is a lot going on at once in a property manager’s day. Everyone knows it’s stressful. But, if you’re in a position of weakness – either you’re having issues at home, or your health isn’t where you want it to be, or you’re not connected to yourself spiritually – you won’t be clear about where your business is going, and the stress and the chaos that comes with an average day will be magnified.

You need a purpose to what you’re doing, and if you don’t have that purpose, the daily grind is going to be much harder to endure.

Every day that you come into the office, you need to know where you’re going and why you’re doing what you do. Not only do you need to know that – your staff and your team need to know that as well. Everybody needs to be aligned with what all this is for.

Tony has a two-year roadmap that he shared with his team and a list of goals and opportunities that he wants to achieve. But, the statistic that resonated with them more than anything else is this:

Last year, Tony’s team housed almost 2,000 families.

That’s the purpose that will balance and motivate a team; knowing that 2,000 families have relied on them. Well-balanced and empathetic property managers will understand that people are counting on them to take care of their homes, their futures, their safety, and the place that their children grow up. You cannot take the real–life part of this job for granted. Property management includes a lot of pushing paper and conducting move-in inspections and taking calls, but the purpose is to provide an exceptional experience for everyone you come across. You’re protecting an owner’s investment and helping tenants feel comfortable in their homes.

Building a Trust Bridge Between Tenants and Owners

This may remind you of the podcast conversation with Lisa Wise, who advised leading with empathy. A lot of property management entrepreneurs think of tenants as a necessary evil. They mentally set up an adversarial relationship with these pesky entities who are only good for paying rent. If you change your thinking, you change the way you provide property management, and you change the experience for everyone who works with you.

Property management shouldn’t be a tenant-versus-owner dichotomy. Your business cannot be all about the owner, because if you cannot keep good tenants in place, it doesn’t matter how many new owners you start working with. You won’t have tenants to fill their properties. Taking care of tenants is just as important as taking care of owners.

This is part of the trust bridge that the property management industry needs. Policies and systems are critical, but empathy is absolutely necessary. There are a lot of different ways to say no. You can say no and still be helpful. If something doesn’t work between you and a tenant, leave them with an out and be sure to end the relationship on a positive note. If you live in a small community, word spreads fast through other tenants and property managers. Leading with empathy will build you a better business.

Routines and Rituals: How to Start Balancing Personal and Professional Goals

Personal lives always bleed into office lives, and balancing the two takes some work. At home, Tony has a protocol in place, which starts with waking up at 5:00 in the morning and taking care of himself and his personal priorities. He works out, drinks a smoothie, and takes the time to write appreciative notes to his children and his girlfriend. Then, he meditates and journals and reviews study material that’s relevant to his business and his professional goals. All of this is done in what he calls his morning power hour. His day is moving on a positive note before his children are even awake.

At the office, the day begins with a morning huddle with his staff. Everyone gets together to review the previous day. This puts everyone on the same page and ensures the whole team is aware of any new notices, new maintenance emergencies, and new applications. Then, each team member has the opportunity to define their number one priority for the day. It might be collecting rent or making deposits. The leasing agent might have a good lead. Everyone is calibrated and ready to start the day.

Jim Kwik, a renowned mental coach, talks about the need for routine, and how a healthy brain needs one ingrained. Most people don’t have this, and it sounds intimidating when you hear about the discipline that someone like Tony possesses. Don’t be intimidated – just be willing to start somewhere.

Pick one or two things that are weakest for you and where you get the most value. Start there, and if you can build a routine with just those one or two things, they will become intuitive and instinctual, and part of your everyday life. Then, you can start incorporating more things into the routine and it will be manageable. So, if you’re thinking your health is where you’re weakest and you value being able to live a longer, healthier life – make a visit to the gym a part of that morning routine. If you can’t get a whole workout in, give yourself the opportunity to sweat hard for 10 minutes. This is a matter of taking an assessment of yourself and being real. Find that weakness and start with something simple.

Healthy Leader/Healthy Staff: Centering Your Team

Tony admits that sometimes his own routine is a bit over the top, and a little aggressive for most people. He doesn’t expect his team to be just like him, but he does tone it down a bit and offer tips and advice that everyone can apply to their lives. Office discussions will include fitness and nutrition and relationships. Many people have kids, and he recognizes the importance of having real conversations. There’s nothing superficial about the growth and balance that he wants to achieve. Tony is willing to ask deep questions, and he creates an environment where his team feels safe answering those questions.

The team huddle sets the tone for the day and centers everyone. From that, other things are put into place to protect that sense of balance and healthy behavior.

For example, the office hours are 8:30 to 4:30, but the doors don’t open to the public until 9:30. That gives the staff an hour to catch up and prepare. On Friday afternoons, the office closes at 1:00 for training sessions or catching up and preparing for the week ahead. Focusing and planning for the next week is a big component of the business. Those Friday afternoons are critical because everyone can decompress and wrap up from the week.

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Sponsor for Today’s Podcast – Property Management CMO Consulting 

The second sponsor for today’s podcast is Alex Osenenko, who is offering intensive consulting sessions on marketing. A lot of property management companies underspend on marketing. That cuts off their ability to grow, and it can cost the business hundreds of thousands of dollars in opportunity. Here’s an example. Company A spends $50,000 a year on marketing and gets 70 new contracts. Company B spends $20,000 on marketing and only gets 30 contracts. In annual contract value, that’s a $100,000 difference. With CMO strategic level consulting, you’ll get a marketing plan with a blueprint that can be deployed using specific channels. It’s a unit economics model that gets down to profitability so you know what each property is worth to you. You can remodel your fee structure so you get more add-on value services. By bringing value to your clients, you make money. This is expensive, and will cost $5,000 for a full day. If you’re interested, email alex@fourandhalf.com to get an intake form.  

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Using Gamification in the Pursuit of Balance and Success

Gamification can help with motivation and accountability. Something as simple as awarding yourself points for the things you accomplish can provide a way to track your progress and feel good about what you accomplish. Tony calls his morning routine the Core Four. There are four major areas he’s touching, and he wants to do two things in each of those areas. So, he can earn up to four points per day. His goal is to reach those 28 points per week. Every Sunday night, he reviews his week and determines what happened if he didn’t reach that goal and what he has to do to correct the course for the following week.

The same thing applies to his professional routine, which he calls the Key Four. Every Sunday night or Monday morning, he plans four major tasks that he needs to accomplish that week. Maybe his 90-day goal is to increase revenue by a certain amount. He breaks out his benchmarks and his targets and he establishes those four tasks every week that will get him closer to that revenue goal. Making it a game is a tactic that’s fun and simple and accountable.

Consulting, Coaching, and Personal Development

It’s easy to dismiss personal development and coaching as schemes designed to separate successful people from their money. However, the right coach or the right book or the right community of like-minded people can change your life and alter your path. For Tony, it was realizing his software job was setting his life off balance after he read The Monk Who Sold His Ferrari by Robin Sharma. That is when he became more interested in personal development.

This is a world where it’s hard to figure things out on your own. Having a community or a coach who can challenge you to think differently and expect more from yourself makes an enormous difference in your balance and your ability to achieve success. Most people out there, professional athletes included, need a coach. You need someone to push you through these things.

As a property manager, do yourself a favor and give yourself a break. You need to bestow permission upon yourself to live a great and balanced life. Property management doesn’t always feel like one of the best industries out there, but it is. Property managers are doing work that matters. It’s becoming more mainstream, and to get to the next level, property managers need to be professionals. Be accountable with yourself and others, and find your balance.

If you have any questions about what Tony and Alex have talked about today, please contact Fourandhalf.

Some Apartment Markets Are Facing Challenges

Apartment rents are not growing as quickly as they had been, according to research firm RealPage Inc.

In a few overbuilt downtowns, apartment rents are starting to fall. But experts claim that demand for apartment units continues to be so strong, the trend won’t last for long.

“The story in these markets is the apartment story writ large: the high levels of apartment construction are not enough to house the 1.2 million or so new households formed each year without increased single-family construction,” says John Affleck, research strategist with the CoStar Group.

Apartment rents are still growing, but not as quickly as they had been, in markets across the country, according to research firm RealPage Inc. Rent growth is slowing the most in a handful of cities where developers have opened thousands of new apartments recently.

Rents fall in Houston

In Houston, rents dropped by 1.6 percent on average over the past year, according to RealPage. In the top “urban core” neighborhoods where developers have opened the most new apartments, rents have fallen by more than 10.0 percent. Apartment occupancy rate in the city averaged 92.9 percent in mid-2017, down 180 basis points from the high of 2015.

“There is still some pain immediately ahead for Houston, mainly reflecting that another 22,000 or so apartments will be delivered in the coming few months,” says Greg Willett, chief economist for RealPage.

However, the outlook for Houston is strong. “Once we get past early 2018, however, the completion pace will slow to a trickle in a metro likely to be experiencing robust employment growth,” says Willett. “The metro has the potential to move from performance laggard status to star positioning very quickly.”

New York City

The rents in New York City are barely growing. Revenue growth was close to zero over the 12 months that ended in mid-2017. “So not terrible, but very little rent growth,” says Barbara Denham, senior economist with research firm Reis Inc.

Developers are expected to open 20,000 new apartments in New York City this year, according to RealPage. That’s about 25 percent up from the year before. “Some further rent cuts are possible,” says Willett. “Queens will join Manhattan and Brooklyn among the areas struggling to digest sizable new supply.”

Nashville, Tenn.

Developers are now opening new apartments in Nashville at a rate of nearly 8,000 a year. That’s about double the rate of completions in 2016 and 2015, according to RealPage. The occupancy rate was 95 percent at mid-year, 160 basis points lower than it was 12 months ago.

Rents still grew by 3.4 percent in Nashville over the 12 months ended at mid-year. That’s close to twice the overall rate of inflation. But it’s less than half the rent growth compared with the year before, when developers opened half as many new apartments. “And the downtown submarket—where construction is heaviest—is suffering sizable rent cuts,” says Willett.

Rents are growing in smaller markets

Not all apartment markets are cooling off. The places where the pace of rent growth sped up the most include Colorado Springs, Colo.; Ventura County, Calif.; Tacoma, Wash. and Sacramento, Calif. Effective rents grew on average between 5.0 percent and 8.0 percent in these markets over the 12 months that ended in mid-2017.

These towns don’t have much in common, except they are located in close proximity to markets with very expensive apartment rents, including Denver, Los Angeles, Seattle and San Francisco, according to Denham.

Source: NRE Investor

Turn breakrooms and cafes into all-day assets

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Need to confer with colleagues at Red Hat, a Boston-based cloud software company? Grab a seat near the coffee pot for a quick discussion. The small offices behind these conversation stations are enclosed phone booths where employees can make private calls without disturbing others. | AEI

Far from distracting employees, breakout areas and spaces for socialization can actually improve productivity. A casual chat over lunch can spark an idea. Bumping into a colleague on the way to the coffee pot can lead to collaboration.

“Previously, business owners didn’t want to waste square footage on plazas, multipurpose rooms, breakout areas and socializing spaces. They wanted to see how many bodies they could fit in the space,” explains David Chason, Partner of AEI U.S. Studio. “It has come full circle in the last six to eight years. Designers have always put that into our designs, but clients and business owners
are now listening to that and using square footage in a different way that affects retention of employees.”

Thoughtful renovation can turn a humdrum breakroom into a space that achieves maximum use throughout the workday. Try these tips to draw people in.

• Pay attention to café and breakroom design. “Food draws everyone together,” says Amy Klinefelter, Interior Designer for Gresham, Smith and Partners. “Providing large gathering spaces to collaborate and eat together is a great way to draw in younger employees and retain them longer.”
• Instead of a breakroom, look at social spaces with multiple functions in mind. Chason views these areas as the “town center” around which the workplace revolves. “We look at spaces as cities,” he adds. “You’ve got houses in the suburbs, you’ve got townhouse and skyscraper buildings, you’ve got parks, and that’s how we look at the landscape of office space for a business. You also have enclosed private conference rooms – like when you plant a hedge for privacy – and open plan workstations where everyone has a visual of each other – the same as when you live in a city with lots of neighbors.”
• Consider white noise or other acoustic solutions for open and common areas to keep socialization from bothering people in nearby workspaces.

Major Rental-Home Companies Set to Merge as U.S. House Prices Recover

THE GREAT DEALS ARE MOSTLY GONE, NOW ITS ABOUT CUTTING OPERATING COSTS.

After the housing market collapsed more than a decade ago, new investors poured in to buy foreclosed homes and rent them out. Now, a $4.3 billion deal suggests that the bargain-hunting binge in housing is finally over.

Two of the biggest institutional single-family landlords in the United States said Thursday that they planned to merge, an indication that the housing market has recovered much of the ground it lost in the financial crisis. And as home prices rise in many areas, affordable housing, for deep-pocketed investors and young first-time buyers alike, is becoming harder to find.

The two institutional landlords, Invitation Homes, a rental business spun out of the private equity giant the Blackstone Group, and Starwood Waypoint Homes said they would combine to create an entity with about 82,000 homes in more than a dozen big markets.

The deal could set the stage for other institutional investors to join forces. With fewer opportunities to buy homes at a discount, the keys to growth will be reducing operating costs, gaining market share and potentially increasing rent.

With consolidation, Wall Street-backed firms’ once-bold strategy of cleaning up the mess created by the crisis by going to foreclosure auctions and snapping up hundreds of cheap homes has ended.

Wall Street jumped into foreclosed homes reckoning that there would be a fundamental shift in housing, with millions of people losing their houses and becoming renters — at least until they could repair their credit scores.

On the eve of the crisis, the rate of homeownership — the percentage of households that own a home — hovered around 69 percent. Today, it is 63.7 percent, according to the United States Census Bureau. And last year, the number of new renters again outpaced the number of new homeowners, according to Harvard University’s Joint Center for Housing Studies.

But the economics of buying recently foreclosed homes to rent out has become more challenging for Wall Street firms that seek to generate double-digit returns for investors, and for publicly traded real estate investment trusts that promise shareholders hefty quarterly dividends.

For the past year or so, many institutional investors have had to compete with potential homeowners shopping for foreclosed homes posted for sale on multiple listing services.

“As home prices rise, most of the institutional investors are dramatically slowing the rate at which they buy new homes,” said Laurie Goodman, director of the Urban Institute’s Housing Finance Policy Center. “And with the easy money days behind them, they need a more efficient cost structure.” She said the merger was a way accomplish that by gaining further economies of scale.

Blackstone was one of the first private equity firms to begin buying foreclosed homes in the wake of the financial crisis, fixing them up and renting them out. The firm, which began buying homes in earnest in 2011, is estimated to have spent $10 billion on its foreclosed-home-to-rental bet.

Invitation Homes, which emerged from that push with almost 50,000 homes, is a company that Blackstone built from scratch.

Purchases by Invitation Homes have dropped sharply since 2013, when it was buying hundreds of homes each week. Its acquisitions are down more than 90 percent from then, and the period of “hyper growth” for the industry has passed, said a person close to the company who was not authorized to speak publicly.

In all, institutional investors have bought an estimated 200,000 single-family homes to operate as rentals.

But that is a fraction of the overall number of rental homes in the United States. According to housing industry estimates, there are as many as 17 million single-family rentals across the country, most owned by mom-and-pop landlords or firms operating fewer than 100 such homes.

Before the crisis, there were about 10 million rental homes, an indication of how many homeowners were displaced by the worst housing crisis since the Great Depression.

Consolidation among institutional investors began three years ago with American Homes 4 Rent, which owns 49,000 rental homes, buying Beazer Pre-Owned Rental Homes. A few months later, Starwood Waypoint bought Colony American Homes in an all-stock deal that valued Colony American at $1.5 billion. Most of the mergers since then have been small, and the deal between Invitation Homes and Starwood Waypoint would be the biggest in an industry that did not exist a decade ago.

The move by institutional investors into the housing market has been credited by some with helping to stabilize the sharp and steady decline in home prices early in the financial crisis. The presence of private equity firms and hedge funds in the market also helped attract the interest of smaller investors.

But big firms like Invitation Homes and American Homes have drawn criticism from housing advocates for renting their homes at prices that are unaffordable for the working poor.

Few renters with federal rent subsidies known as Section 8 live in homes owned by Invitation Homes and other institutional investors. That is partly because such investors have tended to operate in largely suburban communities and have avoided buying homes in urban areas.

In the past, Blackstone has said that 72 percent of houses owned by Invitation Homes have monthly rents within federal affordability guidelines for the markets where it operates.

This year, housing advocates and some legislators criticized Fannie Mae, one of two government-controlled mortgage finance giants, for agreeing to guarantee a $1 billion financing deal for Invitation Homes without getting any assurances that the company would do more to provide affordable housing.

Kevin Stein, a lawyer and deputy director of the California Reinvestment Coalition, a group that supports the rights of tenants and homeowners, said he was concerned that the merger of Invitation Homes and Starwood Waypoint would increase their power to raise rents.

“What is the level of concentration? This is a concern to our members,” Mr. Stein said. “There are so many communities in California where people are being driven out because of housing costs, and this is part of the dynamic.”

Under the terms of the deal announced on Thursday, each Starwood Waypoint share will be converted into 1.614 Invitation Homes shares. The total enterprise value of the combined company, including debt, would be $20 billion, the companies said.

Invitation Homes’ shareholders will own roughly 59 percent of the combined company’s stock, while Starwood Waypoint’s investors will own the rest.

Blackstone, which took Invitation Homes public in January in an offering that raised $1.7 billion in net proceeds, would continue to have a stake in the combined company.

After the merger, which is subject to the approval of shareholders, is completed, John Bartling, Invitation Homes’ chief executive, will step down. Fred Tuomi, the current chief executive of Starwood Waypoint, will be the chief executive of the combined company.

The new company’s 11-member board will include six members of the Invitation Homes board, including the chairman, Bryce Blair, who will be chairman of the new company’s board. Jonathan D. Gray, head of global real estate for Blackstone and an architect of its single-family rental trade, also will be on the board.

The combined company will operate as Invitation Homes and trade under the Invitation Homes ticker symbol.

On a day when a nervous stock market declined, shares of both Invitation Homes and Starwood Waypoint surged. Invitation Homes’ shares gained 3.91 percent; Starwood Waypoint’s shares rose 5.15 percent.

Source: nytimes.com

What Can an HOA Board Do About Barking Dog Complaints?

by HOA Manager –

So you moved into a beautiful new luxury homeowners association. Your home is on a quiet street in an established neighborhood. Every evening you sit on your newly purchased adirondack chairs in your shady backyard, sipping on a bottle of wine — while your roommate is lapping his water from an old beat up water bowl — your “roommate” in this case happens to be a 120 pound fur baby named Rex and he is not on good terms with your neighbors.

Rex is guilty of barking all day and urinating in the common area. You have been receiving letters from your homeowners association manager about your dog barking while you’re out at work. The HOA has also received complaints that you’re always having your dog off the leash in the common area and not picking up after he’s done doing his business.

These are common incidents at most homeowner associations. Most owners are oblivious of problems their dogs cause because they choose to see their pets not as animals but as family members; and like family members they seem to look the other away of their pets faults. An HOA board member — or manager if you have one — should warn owners that even though the homeowners association governing documents allow for pets, they should know that not all pets are a good fit for the community.

Dogs left alone all day get bored and restless, and many find relief in barking. Some respond noisily to any and all activity. But, nothing is as annoying as incessant barking — even for dog lovers. So what can an HOA board do to helpe with barking dogs?

Educate and Enforce the HOA Rules

First and foremost, it’s important that the Board makes sure homeowners are educated about the rules in the Association, in this case, especially those that refer to pets and noise issues.

1. Revisit the HOA Rules and Regulations

The HOA board may need to give the HOA rules a fresh look to make sure they are updated and clearly state the rules of the Association when it comes to pets, and specifically dogs, if that is a main problem. If it finds the rules need to be updated then it should go through the proper process of changing the HOA rules. Then the members of the HOA must be informed of these changes. Even if no changes are being made to the rules, the rules should be sent out again and members encouraged to read them, especially the section about noisy, barking dogs.

2. Enforce the Rules

Once the membership has been clearly informed of the HOA rules that surround pets in the common area, dog barking, cleaning up after your pets, etc. then these rules must be enforced. This usually starts by sending a letter from the Board, then if no action is taken, fines can ensue as well.

Be Proactive and Helpful

An HOA board can also be proactive and helpful by sending out bark-abatement ideas to help keep the barking noise down in your area.

1. Training

Always the first recommendation for any behavioral problem! Help is as close as searching online. Training not only helps your dog, you’ll be surprised how much it helps you too. You may get some insight into why your dog barks so much, or what it is trying to communicate.

2. Citronella Collars

A humane alternative to the electric-shock, anti-barking collar and costs about the same. Available on the web and in pet stores. Check out this Citronella Collar.

3. Confinement

Sometimes simply bringing an outspoken dog indoors or confining it to a crate can cut down on the disturbance to neighbors.

4. Reduce Stimulus

Close drapes to help muffle street noise, or leave a radio on to mask it. Disconnect telephones and doorbells before leaving your home if they upset your dog or make it bark.

5. Companionship

Dogs are pack animals; they need companionship — a cat, bird, or another dog. Consider a mid-day visit from a pet-sitting service, or drop your pooch off at a friend’s place or a day-care facility once or twice a week.

Pets can offer protection and companionship to humans, but should be able to live peacfully in the Association. When it comes to enforcing rules and regulations, keep in mind that they are there for a reason, with the goal being for the Board to protect, maintain and enhance the homeowners association community.

Topics: HOA Rules And Regulations

Electric Vehicle Charging Stations in Condos and HOAs

by Beth Grimm –

Below is an article written by a client of mine. It is his perspective on a difficult and arduous process on trying to get an EVCS plugin in his condominium. The article is very informative. Since he felt he had to move toward a threat of litigation to get the board to move on his request, I referred him to a different attorney. I don’t do court work anymore and most in my industry know that so there are times I need to help a client by referring them to someone who is capable, yet not offensively so.

Anyway, his journey is recounted below. He has power to an EVCS now. Pragmatic persistence generally pays off. And although the following post is much longer than I usually present, it is well worth the read. It is not to be taken as legal advice, it is written from the perspective of a layperson involved in the process of getting a reasonable response to a reasonable request. Sometimes the proverbial “glove” has to be thrown down to make a point.

Electric Vehicle Charging in Condominium Buildings

Background

Charging a plug-in hybrid or pure electric vehicle (EV) is best done at the location where the vehicle is regularly parked. For the owner of a residential unit in a multi-story condominium building, this would be at the unit’s designated parking space. However, often the designated parking space is some distance from the unit. In between the parking space and the unit may be Association common area or another owner’s separate interest.

In 2012, California added what is now Civil Code §4745 to the Davis-Stirling Act. Along with additions made to another part of Davis-Stirling (CC4600 (b)(3) (H&I)), this statute grants significant rights to condominium owners who wish to install an electric vehicle charging station (EVCS or “charging station”) for personal use. This is one of several actions that California has taken in recent years to promote the increased use of electric vehicles.

The Law

Briefly stated, CC4745 says that, provided the owner of a condominium unit:

• has a “designated parking space, including, but not limited to, a deeded parking space, a parking space in an owner’s exclusive use common area, or a parking space that is specifically designated for use by a particular owner . . .” (CC4745 (a))
• complies with the building permit and safety requirements of state, county and city authorities (CC4745 (c))
• has the work done by a licensed contractor (CC4745 (f)(1)(B))
• pays for the electricity that will be used (CC4745 (f)(1)(D) & (2)(C))
• maintains certain liability insurance (CC4745 (f)(1)(C) & (3))
• accepts responsibility for any damage done while installing, maintaining, repairing, replacing or removing the charging station (CC4745 (f)(2)(A))
• agrees to pay the costs for the maintenance, repair, and replacement of the charging station (CC4745 (f)(2)(B))
• either removes the charging station prior to sale of the condominium unit or transfers all obligations for it to the new unit owner (CC4745 (f)(2) & (3))

then the Association may only impose restrictions—including architectural standards (CC4745 (f)(1)(A))—on the installation and use of a charging station within the owner’s designated parking space that:

“do not significantly increase the cost of the station or significantly decrease its efficiency or specified performance”  (CC4745 (b)(2)).

This law also grants rights to owners of residences within other forms of common interest developments (CIDs), and to the owners of commercial units within mixed-use projects. Another law allows tenants in CIDs some access to these rights (CC1947.6).  However, this blog article will focus on owners of residences in condominium projects.

What is needed to charge an electric vehicle (EV)?

Typically, home EV charging is done on a 240 or 208 volt circuit, similar to what is required for a clothes dryer.  Such a circuit adds to the range of an EV at the rate of 15-25 miles per charging hour and is well-suited for overnight charging. This is known as Level-2 charging.

While most cars can directly plug into a 240/208V power outlet, there are safety advantages to using a charging station instead. The power circuit is permanently connected to a charging station, and the station has a cable that can be easily connected to the car. Charging stations also have other useful functions that are described below. The rights granted to owners under CC4745 are only available if a charging station (EVCS) is used.

Some condominium buildings have installed one or several community charging stations that can be shared by the building’s residents.  CC4745 (h) & (i) contain provisions allowing and supporting this. However, EV owners who can afford the costs (typically several thousand dollars) will generally prefer a personal charging station at their designated parking space(s). That way, the charger is always available to them when needed, and the vehicle does not need to be moved each time charging has been completed.

Where does the electric power come from?

Condominium buildings will have one or several power feeds from PG&E.  These feeds are divided into individual residential services, one or more services for the common areas, and (if a mixed use building) services for the commercial units. If sufficient power is available, electric vehicle charging can be done using power from any of these services, or from new services created from these feeds.

The California Electric Code, section 220.87, specifies a method that can be used to determine how much unused power is available on an existing feeder or service. Essential to determining this is knowing what has been the peak amount of power drawn during the past 12 months. The smart meters now commonly installed by PG&E for billing on each service may be able to provide this information.

An owner wishing to install a charging station will want to take power from a nearby source in order to minimize the cost of conduit and wiring. However, if this power is not coming from the owner’s own residential service, then some provision will be needed to measure and rebill the owner for the power used. Finally, if currently unused power is not available from any feed or service, then a new feed will have to be brought into the building, likely an expensive project. To help with all of these decisions, the advice of a licensed contractor or engineer is essential.

Where must the charging station be placed?

CC4745 is mostly written in language suggesting that the charging station will be positioned within the owner’s designated parking space. Subdivision (g) clarifies this.  The charging station must go in the owner’s designated parking space unless either one of two conditions are met:

• doing so is impossible, or
• doing so is unreasonably expensive.

If either of these conditions are met, then CC4745 (g) says that the Association must enter into a license agreement with the owner for the use of the space in a common area. More on this topic in the illustrative case below.

The issues that Associations must figure out

As of yet, there is no case law resolving several questions that CC4745 raises. Associations need to be concerned:

• that their building has more than just sufficient electrical power for the first owner or owners who want to install charging stations. The Association needs to be thinking about all of the owners who might eventually want to install a charging station. And eventually that may be all owners,
• that there are planned paths for the large amount of conduit that might eventually result,
• that responsibility for costs have been determined should a charging station or its conduit have to be temporarily removed or relocated to allow for essential building maintenance, and
• that aesthetic issues are considered.

For now, it appears that these responsibilities have to be carried out with the Association imposing only restrictions that:

“do not significantly increase the cost of the station or significantly decrease its efficiency or specified performance.”

And CC4745 (b) includes a clear statement of California policy that will generally favor owners:

“. . . it is the policy of the state to promote, encourage, and remove obstacles to the use of electric vehicle charging stations.”

The possible role of service companies

There are two companies I am aware of that offer Associations assistance in making common area power available for EV charging. They are ChargePoint and EverCharge, both of which provide information about their services on their websites. Each offers a charging station and supporting technology that:

• measures and records the amount of power which a user’s vehicle has taken,
• bills and collects from the user for the cost of this power, then uses these collected funds to reimburse the Association, and
• monitors the total amount of power being consumed by all EV charging within a building at any point in time, and delays charging some vehicles if the maximum amount of building power would be exceeded.

While potentially useful to Associations in multi-story condominium buildings, the services of these companies are not inexpensive. And again, the law does not allow the Association to require owners to use a service that significantly increases an owner’s costs.

An Illustrative Case

I am a condominium owner who came to attorney Beth Grimm after applying to my Association to route power for a charging station from my residential power panel to my assigned garage parking spaces. My application had been rejected, as had been my subsequent appeal to the board. I had received a city building permit, and had also spent a non-productive year on an Association-appointed committee to evaluate EV charging solutions. The Association had offered me only alternative solutions that I felt were nonsensical or in violation of the electric code. Recognizing that this case was heading toward litigation (which Beth doesn’t handle), she referred me to another attorney.

About a year later, I was able to tell Beth what had happened. I now have a charging station, but only after a considerable and expensive legal adventure. My Association, upon learning that I was represented by an attorney, started work on a plan for EV charging using common area power. After a while, a first round of mediation was held, but settlement could not be reached.

Among other issues, I had requested placement of the charging station on a wall less than four feet behind my parking space and separated from it by what is unused common area. I did so because installing a post in my parking space to mount the charging station on would have cost hundreds of dollars more, and this electrical device would have been subject to being hit by a vehicle. When the Association specifically rejected this part of my application without offering alternatives, I went to my city’s planning department and got them to issue me an order not to put the charging station inside the parking space, primarily for safety reasons.

Eventually my attorney recommend that I file a lawsuit against the Association for its failure to comply with CC4745. Now, with the Association directors facing near-term document discovery demands and eventual depositions, they agreed to again mediate. Also, by now I had incurred tens of thousands of dollars of attorney, expert witness, and mediation costs.

This time a settlement was reached. I agreed to use the by-then almost completed common area power source that the HOA was installing, and that would be operated by ChargePoint. This even though both my installation and operating costs would be about twice what they would have been had I been allowed to use my own residential power. The mediator recognized that the city planning department order constituted “impossibility” and convinced the Association to stop opposing the requested location for the charging station. The Association’s insurer agreed to pay me what amounted to about 80% of my legal costs.

In this lengthy and expensive process, the Association made a series of decisions that I believe were not in the best interests of either party, but will now have to be lived with. This is, of course, my perspective on what happened. The Association might have a different view. But it illustrates why EV charging ought to be planned for by Associations, with appropriate technical and legal advice, prior to the first owners requesting that they be permitted to install charging stations as allowed by California law.

END OF ARTICLE

Boards take heed. You may have to try harder.

 

Mid-year report: Top housing legislation so far in 2017

2017, solving California’s housing crisis remained a top goal of the state Legislature.

The result? More than 130 housing-related bills in the first half of the year.

The California Apartment Association’s Legislative Steering Committee examined each of these proposals —  and CAA’s public affairs staff helped advance the best of them.

WHAT’S NEXT

Lawmakers will resume work on housing-related legislation when they reconvene from their month long summer break on Aug. 21

Here are some notable examples of 2017 bills intended to solve California’s housing crisis and the status of each:Making sure communities build their fair share of housing

AB 678 by Assemblyman Raul Bocanegra, D-San Fernando, would financially penalize local governments that deny housing permits in violation of state law
Position: Support — Sponsored by CAA
Status: Senate floor awaiting vote
Note: CAA also supports an identical bill in the Senate, SB 167 by Sen. Nancy Skinner, D-Berkeley. Status: Assembly Rules Committee

Curb ballot box no-growth measures

AB 943 by Assemblyman Miguel Santiago, D-Los Angeles, would require a ballot measure that is proposed by the voters to curb, delay, or deter growth or development to be approved by 55 percent of the voters instead of a simple majority.
Position: Support — Sponsored by CAA
Status: Senate Appropriations Committee

Fastracking housing construction

SB 35 by Sen. Scott Wiener, D-San Francisco, would move housing quicker through the permit process when developers meet certain standards.
Position: Support
Status: Assembly Rules Committee

SB 540 by Richard Roth, D-Riverside, would streamline the approval process to spur housing construction by having cities identify where housing needs to be built and adopting specific, up-front plans and conducting all necessary environmental reviews and public engagement.
Position: Support
Status: Assembly Rules Committee

Boosting housing near public transit

AB 73 by Assemblyman David Chiu, D-San Francisco, would incentivize local governments to complete upfront zoning and environmental reviews and rewards them when they permit housing on infill sites around public transportation.
Position: Support
Status: Senate Committee on Governance and Finance

SB 680 by Sen. Bob Wieckowski, D-Fremont, would expand the maximum distance BART is allowed to pursue a transit-oriented development project from one-quarter mile to one-half mile.
Position: Support
Status: Signed by governor

Encouraging micro apartments

AB 352 by Assemblyman Miguel Santiago, D-Los Angeles, would increase affordable housing by supporting the development of “efficiency units” — often referred to as micro apartment units near universities and public transportation corridors.
Position: Support — Sponsored by CAA
Status: Senate floor

Finding money for affordable housing

SB 2 by Sen. Toni Atkins, D-San Diego, would establish a permanent funding source for affordable housing through a $75 fee on recorded documents; it exempts owner-occupied residential real-estate sales.
Position: Support
Status: Assembly Rules Committee

SB 3 by Sen. Jim Beall, D-San Jose, seeks to provide $3 billion through a statewide housing bond to fund affordable housing programs in California.
Position: Support
Status: Assembly Rules Committee

Affordable housing for seniors

SB 62 by Sen. Hanna-Beth Jackson, D-Santa Barbara, would create the Affordable Senior Housing Program under the Department of Housing and Community Development to guide the development of affordable senior housing dwelling units.
Position: Support
Status: Assembly Appropriations Committee

For all bills actively lobbied by CAA this year, click the box below. Note: To access this content, you’ll need to enter your CAA member ID and password.

Bill chart

Inside San Francisco Airport’s Triple Zero Plan

How SFO will achieve energy, waste and carbon neutrality by 2021

Kicking off a five-year strategic plan, San Francisco International Airport (SFO) recently partnered with the Northern California branch of the USGBC to announce its journey to becoming the world’s first “triple zero” airport campus. By 2021, the airport will achieve zero net energy, carbon neutrality and zero waste-to-landfill, according to SFO’s Chief Development Officer Geoff Neumayr.

“We have a 5,000-acre campus with an asset portfolio of over 14.5 million square feet across nearly 70 buildings that currently consume 440 GWh of energy each year,” Neumayr explains. “If we can get to zero, what’s stopping others?”

Achieving triple zero will be no easy feat. SFO is one of the fastest-growing airports in the U.S. and serves 53 million passengers every year. However, despite the constant growth, the airport’s emissions have already decreased by 33% since 1990, and the last three years have seen a 12% drop in water use and a 5% reduction in natural gas, saving roughly $650,000 in utility costs annually. To reach zero net energy, the airport will comply with strict energy use intensity (EUI) targets for all capital projects, which will require the use of advanced energy technologies and innovative design. The current terminals have an operational EUI of 170-180 kBTU per square foot per year, but the new Terminal 1 will have a 50-60 EUI thanks to strategies like displacement ventilation, radiant heating and cooling, dynamic glazing, regenerative elevators, heat recovery readiness and a high-efficiency baggage handling system.

Wealthy San Francisco Neighborhood Fails to Pay Taxes, Loses Private Street

 

A 2008 photo shows Presidio Terrace, a gated community in San Francisco. A San Jose couple bought the street — a private road — after the homeowners association failed to pay a tax bill. (Dale/Flickr)

By Camila Domonoske –

26 Presidio Terrace, a four-floor San Francisco mansion, was recently on the market for $14.5 million. 30 Presidio Terrace, a neighbor in the gated community, last sold for $9.5 million.

But Presidio Terrace itself? As in, the street? The strip of pavement these tony residents rely on to reach their front doors? The private road the homeowners association has owned for more than a century?

That’s a bargain. After the homeowners association failed to pay a $14 tax bill … for three decades … the road went up for auction, the San Francisco Chronicle reports. A San Jose couple snagged it for about $90,000.

Tina Lam and Michael Cheng made their strategic purchase in 2015. But now, the newspaper writes, “they’re looking to cash in — maybe by charging the residents of those mansions to park on their own private street.” Or, lacking that, opening the spots up to the general public.

Cheng, a real estate investor who was born in Taiwan, tells the newspaper the couple “got lucky.” Lam, a Silicon Valley engineer who immigrated from Hong Kong, says she “really just wanted to own something in San Francisco” because she loves the city so much.

The whole story is well worth a read over at the Chronicle.

Presidio Terrace was originally built as an enclave for white residents, as Curbed San Francisco noted last year. The Virtual Museum of San Francisco quotes an ad from 1906, bemoaning the fact that Japanese and Chinese residents were moving into neighborhoods and saying, “There is only one spot in San Francisco where only Caucasians are permitted to buy or lease real estate or where they may reside. That place is Presidio Terrace.”

Presidio Terrace, along with many other wealthy neighborhoods, continued to prohibit ownership by nonwhites until 1948, the Chroniclenotes. That year, the Supreme Court blocked such racial covenants from being enforced. (Some neighborhoods tried to uphold their racial covenants even after they were illegal; member station WAMU has reported on an example in Washington, D.C.)

These days, Presidio Terrace is gated and guarded. SFGate described it as “very private and swank.” San Francisco’s late former mayor Joseph Alioto used to be a resident, as did Sen. Dianne Feinstein.

According to a lawsuit filed by the Presidio Terrace Association, the neighborhood’s current residents didn’t find out about the sale of their private road until this May — more than two years after it happened.

It all started with a $14 bill. Or, well, a lot of $14 bills.

The homeowners association says in the lawsuit that based on city records, “the property taxes on the Common Area have been less than $14.00 annually for the past several years.”

The taxes weren’t paid for “many years,” the association says, because the city was sending the bills to an address “associated with an accountant who last performed work for the Association in the 1980s.” A warning that the account was in default, owing $994.77, was sent to the same address. It too went unnoticed.

A few months later, the street was auctioned off.

(Incidentally, are you wondering how much each resident paid to that HOA? Based on news reports, it’s well north of $500 a month.)

The city should have known the address was wrong, the residents say. They’re calling for the sale to be rescinded.

The office of the treasurer-tax collector does not seem persuaded by that argument. A spokeswoman told the San Francisco Chronicle there was nothing they could do.

And, the spokeswoman told the paper, “Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time — and they keep their mailing address up to date.”

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

EXPLORE: ECONOMY, HOUSING, NEWS, TRANSPORTATION, REAL ESTATE, SAN FRANCISCO

The July 2017 quarterly LEED addenda is now available.

 

Interpretations Six new interpretations were published (LI 10460–10465). LI 10460: Provides clarifications for chiller unit capacity calculations for centrifugal chillers LI 10461: Provides guidance on outdoor airflow monitor requirements for small systems LI 10462: Provides clarifications on receptacle control requirements and exemptions LI10463: Provides clarifications on complete lighting system requirements for tenant spaces LI 10464: Provides guidance on equipment sizing requirements for homes and midrise projects LI 10465: Provides clarification for compartmentalization thresholds in small units

 

Corrections View all corrections.

 

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