From the President

2002 in Review

By Eric Andresen

Here we are at the end of my first year as your president, and what a year it has been! We have certainly experienced our routine share of bad news, but good results have been apparent in spite of this negative camouflage.

I hope that those of you who attend SFAA’s monthly meetings are finding them valuable. Those of you who haven’t yet attended these meetings, I trust you will make a greater effort to attend. At each meeting we review a great deal of information in far more detail than our Web site or this magazine provides, so there is a definite value for all of you to spend a couple of hours each month at Fort Mason.

Certainly the biggest topic on our minds right now is the November election. As I write this article, I know you are reading it after the election and already know the results (see page six). So, let’s look back at what we have been through this past year.

The first segment of the new “Housing Study” was released earlier in the year. The study definitely confirms many of our own beliefs regarding demographics and the negative impact of rent control, as well as the enormous problems generated by the city’s absence of effective housing policies. However, we are disappointed by the lack of depth and the amount of important data that was left out. We could, and should, have received a far more detailed and meaningful report, but the study has succeeded in taming some of the rhetoric that has been used by tenant activists in recent years.

On the local level, we celebrated some victories. One was the reduction in the interest rate we pay on security deposits. We understand this may backfire on us if, and when, the economy gets back on track, but at least we are not currently paying out rates that are nowhere near what we can receive. We also are proud of the fact that the proposed Gonzalez Amendments to the Rent Ordinance died before reaching committee hearings. This legislation, as described in several issues of our magazine, would have had extremely negative impacts on property owners and managers.

We also do not want to lose site of the fact that we finally convinced the Rent Board Commissioners to amend the Rent Ordinance regarding rents charged by master tenants to sub-tenants. The amendment now requires that a sub-tenant’s rent equals the sub-tenant’s actual pro-rata occupancy and cost. Master tenants, who now find themselves under the same rent control regulations we face every day, can no longer make a profit from sub-tenants. Although not an obvious victory for us, we are clearly better off any time more people are exposed to the inequities of the Rent Ordinance.

We should also mention that we continue to apply for and, in most cases, receive 100 percent passthroughs of capital improvements. Our legal challenges to Proposition H have withstood the test of time. Although the settlement of the issue may leave us only getting 50 percent down the line, the extension of time without the limitation has certainly worked in our favor.

Last spring we confronted two significant pieces of legislation at the state capitol. The first one centered on Senator Sheila Kuehl’s continued efforts to gain passage for her 60-Day Termination Notice bill. We gained a few hidden victories with this bill in spite of its onerous beginnings. For example, the initial draft held that the 60-day requirement would affect all tenancies, but the final version provides an exception for tenancies of less than one year. The service of three-day notices was also preserved and will not be impacted by the new law. In addition, we brought the problems of the eviction of nuisance tenants to the attention of legislators, along with the fact that we really need to streamline this process. In response, Senator Kuehl has pledged to hold hearings next year in an attempt to help us resolve this issue, so there may yet be more good news on the horizon. The bill also imposed a requirement for a written 24-hour notice to enter a tenant’s unit, which is not necessarily positive for us. However, with the implementation of new forms and some simple policy changes, this requirement may not be too difficult to apply and may actually help us avoid liability down the road.

In May, at the same time CAA held its Legislative Conference, Assembly member Carol Migden introduced a second piece of legislation that could have proven quite damning. The initial proposal, referred to as the Security Deposit Protection Act, extended far beyond anything we could have tolerated. First, the initial language would have allowed tenants to claim retaliatory eviction any time an eviction notice was given following a tenant habitability complaint. This would have almost ended our ability to evict for any reason, for tenants could have simply complained of habitability issues to avoid paying rent or being evicted. Second, the original bill also redefined “normal wear and tear” to an unworkable and indecipherable standard. Again, we were able to remove this language from the bill. Third, we managed to strike language that would have made (a) fees for application screening illegal (the latter was not particularly applicable to us but it certainly was across the rest of the state) and (b) would have required the payment of interest on security deposits. Even though we are stuck with the pre-move out inspections of the legislation—admittedly quite oppressive ones—the result could have been much worse. We are currently working with our experts at CAA to define workable ways of complying with these new requirements.

The final legislation leaves us not particularly happy, but we should at least be somewhat relieved that our situation is not much, much worse. Hollow victories for sure, but victories just the same—ones ever so hard to come by in our industry. I suppose we’ll take what we can get and resolve to fight even harder in the years to come. With your support and the incredible efforts of our local and state industry representatives, we can still look ahead with some degree of confidence that perhaps the pendulum has swung as far in the wrong direction as it can. Now perhaps we can take advantage of its swing back to some form of fairness.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Eric Andresen owns West Coast Property Management and West Coast Property Maintenance Companies, is the past-president of the Professional Property Management Association of San Francisco and was the author of the original Residential Tenancy Agreement. Eric also serves on the Executive Board of the California Apartment Association and many other leading industry organizations. Questions or concerns should be directed to SFAA at 415-255-2288. Copyright © 2002.