Sacramento Report
By Ron Kingston

What’s Hot in 2010

At the beginning of each legislative session, we not only closely review each of the 1,500 bills that are expected to be introduced and continue to work on the bills that are still alive from 2009, we also seek to identify the most important bills affecting our industry.

This article will focus on the bills that should be introduced affecting the rentalhousing sector.

One of the most important issues that we will face is an attempt to reverse or sharply limit the decision in Palmer/Sixth Street Properties and Geoff Palmer v. City of Los Angeles. The CA Supreme Court refused to hear a decision of the Second Appellate District. The ruling in the Court of Appeal held that affordable housing restrictions on rental rates imposed on new apartment developments conflict with the Costa-Hawkins Act.

As a result of the judicial decision, rental property owners, developers, and investors have a right to establish the initial and all subsequent rental rates for their rentals which had a certificate of occupancy on and after February 1, 1995.

Due to the decision in Palmer, there is a substantial question in the eyes of housing advocates of the enforceability of:

• Most of the some 170 odd local government inclusionary zoning laws.
• Affordable (rent controlled) price restrictions of a certain percentage of newly constructed rental housing.
• Many aspects of rent control in cities that currently require rent control or are considering it.

We expect a number of legislators to seriously consider authoring a bill next year and BEYOND to attack the basic foundation of the Palmer decision and ultimately seek to reduce or strike a fatal blow to the protections of the Costa- Hawkins Act.

If you are a landlord who is not in a rent control community where there are chronic housing shortages for low-income housing, you should be very concerned about the legislation that will be introduced because if the legislature is successful in approving a bill in this area, local governments will be encouraged to enact rent control.

SB 782 (Yee) will be considered by the Assembly Judiciary Committee within the first few months of the year. It proposes a novel new law: a civil proceeding that would permit a victim of domestic violence and the aggressor a right to remain in a rental property. Ultimately, the bill makes every person involved far worse off than current law.

We have taken Mr. Yee’s bill very seriously.

In the final analysis, we have remained in opposition along with the Orange County Apartment Association. Our reasons to oppose the bill include:

• The bill allows aggressors to remain in possession and we strongly believe that no bill should permit a dangerous condition to remain.
• Landlords from taking immediate action to provide for the safety of all tenants, including the victim.

In discussing "What’s Hot, What’s Not" even paint colors of rental properties are included in the mix. Designer Barclay Butera of Newport Beach says “blue is the new beige” for walls.

Sherwin-Williams—the largest producer of paint and coatings in the U.S.—focuses on preppy pastels and bright juicy colors for accent walls. They, too, agree that beige/Navajo white is out and recommend silvery white, sparkling grey and glowing yellow to makeup this years’ muted palette. Dunn Edwards Paint Company’s web page calls for background colors such as sage green.

What’s Hot

• Comfort, convenience and cost
• Sustainable flooring—e.g. products made from bamboo or painted concrete
• Less is more window treatments
• High pigment, one coat paint
• Simulated granite counters (granite is usually damaged after three tenant turnovers)
• WiFi
• Cherry cabinetry
• Converting linen closets into office space
• Spa baths
• Mobile marketing and email
• Video chat between prospects and front line leasing team members
• Outdoor rooms—even if they are tiny like on a balcony or atrium

What’s Not

• Failure to communicate personally
• No response to service requests
• Unkept landscaping
• Apartments not ready for showing
• Lack of response to phone calls or emails

Ron may be reached at: Ron@CALPCG.com
or you can call him at (916) 447-7229.