New Interest Rates for Passthroughs
Rental property owners are entitled to a reasonable rate of interest on capital improvement passthroughs. The San Francisco Rent Board recently announced that for petitions filed between March 1, 2007, and February 29, 2008, the rate is 4.7% for improvements amortized over a 7-year-period, 4.8% for a 10-year period, 4.9% for a 15-year period and 5% for a 20-year period. This is a slight increase over last year’s interest rates.

These imputed rates are for owners who expend their own funds and do not need to borrow the money to pay for the improvements. If money is borrowed, the owner is entitled to the actual rate of interest being charged by the lender, up to a maximum of 10%.

CAA Legislative Day Announced
CAA will host its annual legislative conference in Sacramento on March 26. This conference gives you an opportunity to educate state lawmakers about the trials and tribulations that you face as a California rental housing provider, and to advance the causes of the industry. This year’s theme is “Let’s Give Them Something to Talk About” and there is no doubt that San Francisco apartment owners will have some horror stories to contribute.

The conference will take place at the Sacramento Convention Center from 9 a.m. to 5 p.m. If you register before March 16, the cost is $40 for members and $55 for nonmembers, which includes breakfast and lunch. After March 16, the prices go up to $50 for members and $70 for nonmembers. You can register online at www.caanet.org or call 800-967-4222. For sponsorship opportunities, email Beth Downs at bdowns@caanet.org.

Sex-Offender Law Broadened
The state attorney general’s office has changed its mind about exactly who is affected by Proposition 83, the voter-approved law that bars sex offenders from living within 2,000 feet of a park or a school. In response to a lawsuit by a Bay Area man who pleaded no contest to a sex crime 15 years ago, outgoing Attorney General Bill Lockyer originally stated that Prop. 83 could not be applied retroactively. In other words, those who had already registered as sex offenders would get a pass from following the restrictions of the new law. But Lockyer’s office later clarified its decision to indicate that while sex offenders who registered before the passage of Prop. 83 cannot be evicted from their homes just because they are within 2,000 feet of a park or school, these offenders would be prohibited from establishing a new tenancy within those parameters. Former Oakland Mayor Jerry Brown replaced Lockyer as attorney general on January 8, but it remains to be seen how he will stand on the enforcement of Prop. 83.

Prop. 83 passed overwhelmingly last November and made the state’s residency laws more restrictive for all sex offenders; previous residency restrictions had only applied to child molesters, but not rapists or those convicted of other sex crimes, and only restricted residency near schools, not parks.

State of Homelessness Address
While admitting that the city still has a long way to go to help homeless families and seniors, San Francisco Mayor Gavin Newsom largely focused on the positive in his third annual “State of the City’s Homelessness” speech. Newsom highlighted his “Housing First” program, which supplies permanent housing in conjunction with social services as a way to keep people off the street and on the path to self-sufficiency. Since January 2004, the city has added 1,798 units of permanent supportive housing for homeless single adults, for a total of 3,182. In that same period, 2,590 homeless single adults have moved into permanent supportive housing. The mayor also took the opportunity to tout his Care Not Cash plan, saying that only about 300 of the city’s homeless receive cash welfare payments today, versus nearly 2,500 before the program was implemented in mid-2004. The $15 million in city funds that used to be directed toward those payments now pay for housing for 1,726 formerly homeless individuals.

While most of the mayor’s efforts thus far have been geared toward single homeless adults, he announced an annual investment of $3 million to help stabilize families at risk for eviction. Plus, over the next three years, the city will develop 138 units for chronically homeless families. In the same period, 166 units of permanent supportive housing will be built for chronically homeless seniors.

Foreclosures Likely to Go Up
A new report from the Center for Responsible Lending shows that up to 2.2 million Americans could lose their homes to foreclosures in the next few years. According to the report, Californians are particularly at risk because the state has such a high rate of subprime loans. These loans are usually granted to high-risk borrowers with low credit scores. While they once made up a minute portion of the lending market, they accounted for nearly a quarter of the loans in the first 10 months of last year. Due to deflating housing prices, the report claims that one in five families with a subprime loan today will end up losing their homes to foreclosure. According to center representatives, the results of the report were released in order to promote additional regulations to ensure that subprime borrowers can actually afford their mortgages, which often start out low and rise rapidly after a short introductory period.

The Mortgage Bankers Association, a trade group for the lending industry, responded by saying that improved lending education, not enforcement, is required, and that the center’s numbers represent a worst-case scenario. But even the association admitted that subprime borrowers are falling behind in their payments more quickly than other borrowers.

GGHA Head Stepping Down
General William Kunzig, co-founder and long-time president of the Golden Gate Hotel Association, is retiring after more than 30 years of leading the organization and 43 years in the hotel business. Kunzig helped form the association in 1973, became its president in 1974 and has not taken even a momentary leave of absence since then. But, at the end of last year, due to his health and age, he decided to retire. There is no word yet on who will be taking over the leadership of the association in his absence.

Free Solar Panel Workshops
PG&E is sponsoring a series of free workshops over the next few months for all San Francisco residents interested in installing solar panels on their homes or businesses. The classes will go over the benefits of solar power, as well as how to install the panels. To register, call 415-973-2277 or check out www.pge.com/pec.

The workshops are part of PG&E’s overall commitment to finding solar energy solutions, including a $15 million partnership with the city to expand solar installations in homes and schools.

CAA Conference and Expo
The California Apartment Association will hold its 2007 Northern California Rental Housing Conference and Expo at the Santa Clara Convention Center on April 10-11, 2007. This year’s theme is Casino Royale. Associate members have a variety of sponsorship opportunities, ranging from the $500 “Showtime” sponsorship (which includes a banner in the reception area) to the $3,950 “Royal Flush” sponsorship (which includes a corner booth in a prime location and a color ad in the seminar workbook). For more information, contact CAA at 408-873-1599.