The benefits of a structured community


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!


Is the Gas Tax Repeal Measure the New Proposition 13?

Republicans are hoping that high gas prices will fuel a tax revolt in November. (FREDERIC J. BROWN/AFP/GettyImages)

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.

Amenity Valuation: Are You Getting It Right?

Amenity Valuation - Are You Getting It Right?

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.

There’s an ‘arms race’ to lure renters, and it now involves pet spas and beer gardens

A spa for your dog. Golf and boxing simulators in the gym. Private bars with wine storage for residents. A 24-hour concierge.

The list of amenities in some new Charlotte apartment buildings sounds more like what you’d expect in a high-end resort than a rental unit where you might live for a year or two. But with a record number of high-end apartments under construction, buildings are turning to their amenities to stand out and try to lure renters.

“It’s been an arms race, especially with the high level of supply and competition,” said Chad Hagler, a developer with Woodfield Investments, who’s opening the 455-unit Links Rea Farms apartments on Providence Road this year. “Everyone is trying to outdo one another.”

The amount of amenities considered necessary in a new, upscale building has increased vastly over the past two decades.

It’s no longer enough to have a pool and a gym with a few treadmills. Now, the bare minimum typically includes a saltwater pool with lounge chairs, a “pet spa” with grooming stations for dogs and cats, some kind of beer garden or community kitchen, high-end gym equipment like a yoga room and a concierge for packages and arranging services.

Some go even beyond that: Continuum 115 in Mooresville has a boat for residents to check out and cruise on Lake Norman.

All that added luxury can add up to increased rents. The average rent for an apartment in Charlotte is up about 6 percent from a year ago, at $1,142 a month. In 2013, the average was $842, meaning rent has jumped by more than a third in the past five years.

It’s tough to pin down how much swankier amenities add to the rent for individual apartments, since development costs can vary dramatically. But developers and property managers interviewed by the Observer said the effect isn’t insignificant.

Hagler said the first apartment building he developed in Charlotte, Elizabeth Square, had about 4,000 square feet of amenity space when it opened in 2007. His most recent, Links Rea Farms, has about 15,000 square feet.

“It’s an incredible amount of space, and those spaces are expensive to build,” said Hagler. But, he said, it’s worth it to draw new residents. “It’s your front door, it’s your marketing window.”

Not only are the added costs for building multimillion-dollar amenities packages rolled into the rent, but upscale amenities cost more to operate in the long term.

For example, a 24-hour concierge service requires hiring several shifts to work around the clock. Maintaining multiple courtyards, swimming pools and gyms full of high-end digital equipment necessitates more staff. And many apartments now contract with third-party vendors who organize social events for residents, such as beer tastings and food truck rallies.

“It’s more expensive from an operational standpoint,” said Marcie Williams, president of apartment management company Rivergate KW Residential, which manages high-end apartments in Charlotte. “The residents expect to be more entertained, and they want the amenities 24/7.”

Some changes have been driven by new technology.

For example, the dominance of Amazon Prime, which recently passed 100 million members, means apartments are now receiving hundreds or even thousands of packages a week. And meal delivery services like Blue Apron mean that apartments have to find a refrigerated space to store dozens of boxes with perishables.

“Every community we have now is doing 24-hour package rooms,” said David Ravin, CEO of developer Northwood Ravin. The company is building luxury apartments in two uptown towers and at Providence and Fairview roads. Its buildings also include private bars — staffed with bartenders — for residents, along with a sauna, steam room, massage room and golf simulator.

Amenities that once would have been considered over-the-top have become expected by many renters, said Phil Brosseau, vice chairman at real estate firm CBRE. Brosseau said the growing number of apartment dwellers includes more “renters by choice” who could probably afford to buy.

“They want the experience,” Brosseau said, and luxury amenities are an essential part.

With more than 50 new residents a day in Charlotte, many are young professionals moving from other cities who may be used to even more expensive urban markets like New York or San Francisco. That means luxury apartments in Charlotte might seem like a steal, said Lawrence Yun, chief economist and senior vice president at the National Association of Realtors.

“New residents (like these) are not hesitating to occupy a luxurious apartment in Charlotte,” Yun said. Charlotte’s vacancy rate bears that out, at less than 7 percent citywide.

Cost vs. Chic

Not all residents want the amenities, however.

“I prefer no amenities. My fiance and I toured probably every apartment complex in South End and South Park, and they upcharge for rent,” said Rob Brooks, a resident of Park Avenue Condos in South End. The couple decided to rent a unit at the condos to avoid the higher price tag of amenity-laden apartments.

While his condo has a swimming pool, Brooks said he doesn’t use it much. His membership at the Y makes a swanky fitness room unnecessary, and his lack of a pet eliminates the need for a dog park or pet spa.

“We didn’t want any of that extra stuff.” Brooks said. “It’s not important to us.”

Other residents consider extensive amenities to be a selling point of apartment life.

“I think that’s the only reason I’m still in an apartment complex,” said Alanea Kriete, of the amenities offered at her apartment in Post South End.

Still, when naming the amenities she uses the most, Kriete stuck to the standbys: the pool, the gym and the gated courtyards, where she likes to spend time with her dog outside. She admitted to rarely using what the apartment’s website describes as the “resident lounge” with an entertaining kitchen, an Xbox gaming station and a movie lounge.

Those looking for fewer frills may be priced out of the market as extensive amenity packages become the norm among city apartments, said Brosseau. But ultimately he believes the trend is a “testament to the durability” of Charlotte’s real estate market.

Yun pointed out that such durability is dependent on other factors.

“It is very aggressive building that is taking place in Charlotte,” Yun said.

As long as the influx of high-earning new Charlotteans continues, so will the aggressive construction of apartments that attempt to meet new residents’ ever-rising expectations, Yun said.

“We’ve just found our clientele expect the full package,” said Ravin, the developer. “They just want everything right there.”



Plan to Split Up California Likely to Make November Ballot

A view of the top of the California Capitol building in Sacramento. (ROBYN BECK/AFP/Getty Images)

An initiative that seeks to split California into three states is projected to qualify for the state’s November ballot.

California Secretary of State Alex Padilla said late Tuesday the initiative needed 365,880 valid petition signatures to qualify and random sampling projects a number of valid signatures greater than 110 percent of the requirement.

Cal 3’s projected map of the three states. (Courtesy of Cal 3)

The latest proposal for splitting up the Golden State is promoted by Silicon Valley venture capitalist Timothy Draper. It would create the states of Northern California, Southern California, which includes much of of the Central Valley and San Diego, and a coastal strip that includes Los Angeles and retains the name California.

Even if voters approve the initiative, an actual split would still require the approval of the state Legislature and Congress. The proposal, called Cal 3, would require the Governor to ask Congress to divide the state into three states and increase the number of U.S. Senate from 100 senators to 104.

Plan to Split Up California Likely to Make November Ballot

A view of the top of the California Capitol building in Sacramento. (ROBYN BECK/AFP/Getty Images)

An initiative that seeks to split California into three states is projected to qualify for the state’s November ballot.

California Secretary of State Alex Padilla said late Tuesday the initiative needed 365,880 valid petition signatures to qualify and random sampling projects a number of valid signatures greater than 110 percent of the requirement.

Cal 3’s projected map of the three states. (Courtesy of Cal 3)

The latest proposal for splitting up the Golden State is promoted by Silicon Valley venture capitalist Timothy Draper. It would create the states of Northern California, Southern California, which includes much of of the Central Valley and San Diego, and a coastal strip that includes Los Angeles and retains the name California.

Even if voters approve the initiative, an actual split would still require the approval of the state Legislature and Congress. The proposal, called Cal 3, would require the Governor to ask Congress to divide the state into three states and increase the number of U.S. Senate from 100 senators to 104.