As I look back on the last year, my first as SFAA president, I must say that this role has been more fulfilling than I had anticipated. I learned a lot about the legislative and political process on both the local and state level, and I’m looking forward to the challenges that will come in the new year. Our organization is known for being active and strong, and that strength is derived from the staff, the board of directors and, most of all, you, the membership.

In general, we’ve had a pretty good year and I think everyone would agree that the rental market couldn’t be much better—rents are back or nearly back to 2001 levels. Asset valuations have been trending slightly upward for the last 18 months and, with interest rates as low as they are, this may be the best time to leverage and acquire income property.

Over the course of the year, there have been significant legislative achievements for the rental housing industry, despite it being a relatively quiet year overall. In February, SFAA won the appeal of the Proposition M decision, Larson vs. CCSF, also known as the landlord anti-harassment legislation. The original legislation would have severely precluded any dialogue between landlords and tenants, and it even created a scenario in which almost any action by a landlord could have been legally construed as harassment.

Moreover, it awarded attorneys’ fees to tenants, and only to tenants, in the event of an eviction that was settled or dismissed. Winning the appeal was a huge success for the industry and it was made possible, in part, by you through your contributions to our legal fund. The strength of our legal fund enables our organization to pose challenges to legislation that we feel takes away our property or precludes us from operating our rental property in an effective manner. Maintaining the legal fund with contributions whenever possible is something property owners big and small can do to help retain their rights and fight off challenges through the legal process.

Together with our industry partners, we are in a position to pool our financial resources when the need arises to challenge and ultimately defeat egregious legislation that comes out of the system. The financial strength of our legal fund acts not only as a resource to overturn unfair legislation, but also has been effective as a future deterrent to the introduction of potentially unlawful legislation that may negatively affect the industry. There may be a time in the coming year when we ask our members for an additional contribution to the legal fund. It may sound like a special assessment, but those requests have always been well received and those appeals for additional contributions are made judiciously in times of greater need.

Also on the legislative front this past year, the Good Samaritan legislation sponsored by District 8 Supervisor Scott Wiener passed unanimously at the San Francisco Board of Supervisors. In the event of an emergency, this legislation allows building owners to provide temporary replacement housing at the displaced tenant’s reduced rent-controlled rate, but also gives the landlord the right to go back to the market rate a year later.

SFAA Director Janan New was involved with Supervisor Wiener in drafting this legislation. Laws like this are a great example of SFAA reaching out and creating an opportunity for landlords to do something for people in need, while also trying to take away disincentives and motivate property owners to come forward and offer replacement housing in the event of emergency. In the last year, there were a number of apartment building fires where displaced tenants benefitted from the availability of temporary housing, and SFAA will continue forward with systematizing an emergency response program in the new year.

We also survived another election cycle in November and faired pretty well with the candidates and measures that we supported. SFAA has good standing relationships with Mayor Ed Lee and District Attorney George Gascón, and feels like these relationships will lend themselves to a constructive period with city government and agencies.

I would like to also extend a sincere thank you to everyone who made financial contributions to our endorsed candidates and to those who took the time to get involved with their campaigns. Every bit of help made a difference, and many of our members participated by simply putting signs in their windows or exteriors of their buildings. No matter if it was through financial support, volunteering or by offering window space in apartment buildings citywide, the contributions SFAA members made were significant and instrumental in furthering the results we pursued as an organization and industry.

As you know, positive results don’t just happen; it takes people getting involved one way or another. Our effectiveness as an organization is based in large part on the participation of our membership, and as we move forward into a new year I urge you to maintain the level of participation you have shown in the past and that SFAA members are renowned for.

The new year will surely have its own challenges for the industry—some new ones and possibly some old ones with new packaging. But nonetheless, be confident that the board and staff at SFAA will be out in front of it, working to protect your interests.

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Robert Link is president of SFAA’s Board of Directors and co-owner of S&L Realty. He can be reached at 415-386-3111.

SFA Article link here.

The analytics for our industry continue to look positive…..

Average Rents should continue to escalate with a limited supply.

I checked Craigslist today for 1 bdrms in the following districts.

• Nob hill, 6 units available and the avg rent is  $2427.
• Mission 7 units available ………………………  $2136
• sunset/Parkside  4 apts………………………..    $1247
• Russian Hill………………………………………..  3 x   $2966
• Inner sunset ………………………………            6 x  $2258

I think you will continue to see avg. rents driven upward by a shortage of supply and moderate to strong demand. I recently had 2 tenants rescind their 30 day notices to move after spending a weekend apartment  hunting and realizing that they 1. have a pretty good deal pricewise and 2. don’t   want the acrimony of dealing with a highly competitive rental environment.

I think we will are going to see more of this in the coming year. Shortage of rental inventory caused in part by a lack of apartment turnover.

ON THE SALES SIDE……

There are inventory constraints at work here too..

There are 22 multi unit buildings   currently for sale in SF regardless of price. 7 of    which are 5 or 6 unit buildings.

There are 11 multi unit (5+) buildings in contract and in various stages of the sale process as of today, January 23, 2012.

There were 66 sales through MLS in the last 6 months with an average price per square foot of $300 and avg days on the market of 92.

 Stats – Averages

Class A buildings are valued at cap rate in the mid 4%‘s and class B buildings are priced caps in the mid 5%’s.  Riskier assets like those in deep  Tenderloin are being priced in the mid 6% but there is very little inventory right now and brokers are being pretty tight lipped about their pipelines.

Its a great time to sell as demand for apartments is high given the metrics of the rental market and the attractive financing rates available.

I am seeing 7-10 fixed rates at below 4.5% so check if you refi-ed back in 06-07 in the mid 6%’s thinking, this can’t get that much better!”  Well it has and it might be worth the litany of the paperwork.  In fact,  it might be well worth buying your way out of a loan through the PPP if you can save a full point in interest.

Selling you apartment building isn’t the hard part, finding a up leg property on a 1031 exchange is going to be.

Much of the sales volume over the last 2 years has been in larger portfolios and off market transactions. If you are planning on selling, first call me as a may have a buyer but also be aware that abundant choices for the up leg portion of the deal  do not currently exist.

- That’s the market update.

Fire at Pierce and Golden Gate:  1st 5 alarm fire in SF in 6 years

•  occurred in shortly before Xmas,  2 properties damaged and 37 people were displaced from their homes.
• Owner of the building is an SFAA member: had to deal with a number of displaced tenants, none of whom sustained any serious injury from the fire.
• Personally came to thank industry leaders for initiating the Good Samaritan legislation passed last year;
• Fillmore Towers, Park Merced and Mosser Properties avail their services as they always do and assisted in providing housing to  displaced tenants through the Good Samiritan program.  If you are interested  you can sign up online at SFAA.org site.  2 page enrollment app with no obligation to participate.
• This is a great example of the fruition of that work and the industry coming together to help a member and those affected by the disaster.
• My office is located relatively close to that address so I went by to see what happened.  In the 2 block radius restriction; I saw every city service dept: police, fire,  red cross , animal rescue, dbi,  dpw, and various disaster remediation companies. It was great to see everyone working in unison to deal with the aftermath of the fire. Pretty impressive actually, everyone involved with mitigating the challenges of that day, I take my hat off to them.

SFAA lease revisions for 2012 are complete.  Added 4 new clauses which I will

#16 defaults to NO subletting allowed under any circumstance.

#32  carbon monoxide detectors if provided in premises tenant responsible for maintaining.

#38  Renters insurance, tenants agree to have it and provide LL w proof within 30 days.  or if cancelled is grounds for just cause.

#53 No release from forfeiture:  tenant must pay back attorneys fee costs and damages as a condition of release from forfeiture: goes back to our Prop M victory 

Located in Presidio Heights district, one of SF best neighborhoods, this remodeled top floor flat features luxury appointments in all rooms. Galley kitchen features stainless appliances, granite counters, & new cherry cabinetry. Open living room has balcony with beautiful city views.

1800 22nd Ave: Central Sunset SF

*Annual income $218,508  Cap rate 5.3%   GRM 11.41

*Rent Roll and Property Statement are available upon request

*Principals Only, this building in not yet on MLS

 *Buyer to cooperate with Seller’s 1031 Exchange at no cost to Buyer.

Top floor unit in vintage 20′s building, many upgrades, good floor plan and close to downtown.

Huge top floor remodeled flat with 3 bdrms and 2 baths and master suite. W/W carpet in the bedrooms, in unit laundry, wood burning fireplace, breakfast nook, s/s appliances,1x car parking

Hardwood Floors.  Gated property, non-smoking and no pets. Unit A.

Junior 1 bedroom, 650 sq ft, completed kitchen and bath remodel, refinished soft wood floors, new front windows, new IPE wood decking, new lighting throughout, removed partition wall to create open/connected floorplan.

Many of the members of the San Francisco Apartment Association are unaware of all of the civic and charitable activities the association is involved in outside of the rental housing industry. Civic engagement is the cornerstone of much of our work, and SFAA is continuously involved with city and community groups, as well as other local nonprofit agencies. SFAA works diligently to lend a helping hand to many city agencies and task forces, and is a strong leader in the city.

SFAA Executive Director Janan New sits on several advisory boards and Boards of Directors of local nonprofits. She has served on the board of the Neighborhood Parks Council, the Bay Area Women’s and Children’s Center and the Pacific Primary School. She also volunteers her time on the City Car Share task force. In addition, all staff members at SFAA are asked to get involved in some sort of volunteer work. The staff has been involved in everything from the Girl Scouts to supporting the Irish Cultural Center.

SFAA also participates in a number of city task forces, volunteering to help the city in a number of different spheres and projects. SFAA staff sit on the Renewable Energy Task Force, the Asthma Task Force and the Committee Action Plan for Seismic Safety. SFAA also participated in conferences on mental health and hoarding and cluttering, and is working with Supervisor Scott Wiener’s office on a campaign about the benefits of renter’s insurance after a spate of recent fires in Wiener’s supervisorial district. The San Francisco Apartment Association is also putting together a free website on smoke-free housing in accordance with the San Francisco Department of Public Health, and in support of those offering healthy housing options citywide.

SFAA is itself a not-for-profit business, and we believe that it is important to support other local nonprofits as well. We have given financial support to the Alice B. Toklas LGBT Democratic Club, Plan C, the Housing Action Coalition and many other worthy organizations. We also participate in and are members of the Chamber of Commerce and the San Francisco Planning and Urban Research Association.

SFAA also accepts some funding from city departments in exchange for work within the community. The acceptance of grant money allows us to keep membership dues as low as possible while still participating in the formation of policy that affects the rental housing industry.

SFAA works under DBI’s Code Enforcement Outreach Program in collaboration with local tenant groups, including the Housing Rights Committee of San Francisco, Causa Justa: Just Cause, the Tenderloin Housing Clinic and the Chinatown Community Development Center. The outreach program is funded by the Department of Building Inspection and is designed to improve communication and cooperation between tenants and rental property owners, and improve living conditions for renters. Often times, a strained relationship between a resident and rental property provider results in direct calls to DBI, instead of informing a manager or owners first to mitigate the issue. SFAA works with the city and other local groups to bring rental housing into code compliance through better communication.

Finally, SFAA board leadership is called upon to discuss pending or soon to be proposed legislation that affects quality of life issues for all San Franciscans, not just those relating to landlord-tenant issues. In the last election cycle, the SFAA board met with many of the sponsors of the propositions so that we could evaluate the impact of a proposition and decide its relevance, if any, to our membership. We were asked to take positions on issues like sit/lie, city-employee pension reform and Saturday voting, to name a few.

San Francisco Housing Foundation
Through the leadership of State Senator Leland Yee, SFAA started a community-based nonprofit in 1999. At the time, Supervisor Yee believed that all city funding was going toward the tenant organizations, so he wanted to balance this with a onetime grant to start a housing foundation for low-income property owners. He started the SF Housing Foundation, and through the SFHF, SFAA offers free monolingual classes so owners can learn the laws and intricacies of the rental ordinance in their native languages.

The SF Housing Foundation also offers legal assistance for low-income housing providers, working with local attorneys to provide low-income owners with a few hours of pro bono legal work. If an owner’s case is more time-intensive, the SFHF will work with an attorney to subsidize their hourly billing rates.

One of the most rewarding programs the San Francisco Housing Foundation created was a collaborative program with the Homeless Prenatal Program. The Homeless Prenatal Program approached us because many of their clients were unable to come up with the security deposits needed to secure housing. With the pro bono help from one of our associate attorneys, Clifford Fried, we were able to create a line of credit to be used in lieu of a security deposit to allow owners to offer housing to the neediest tenants. The line of credit went to the owner in place of the cash security deposit and was backed by the foundation. The owner could draw on the “security deposit letter of credit” only if needed. During the two years that this program was active, the letters of credit were drawn on only twice, both times for fairly nominal amounts.

The SF Housing Foundation has a fundraiser once a year in August. The foundation is funded through the leadership and generosity of the members of the Professional Property Management Association, the San Francisco Association of Realtors and the Coalition for Better Housing. The fundraising efforts have added to the seed money Senator Yee entrusted to us and allow us to keep the programs active. We are proud to be celebrating our 12-year anniversary.

The San Francisco Apartment Association is committed to its work with local community groups, other nonprofits, and service to the city through participation on a number of agencies and task forces. Building collaborative relationships with city leadership and other organizations is one of the most important functions of the board and SFAA leadership. Ideological differences can sometimes alienate people and/or groups, but it is always important to keep the proverbial doors of communication open to dialogue with everyone. It is our passion and a privilege to provide useful services to our members and to our city.

by Robert Link

original article here