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Multi-Family in San Luis Obispo CountyNews

Our goal is to keep you informed about multifamily news and trends in the Santa Barbara County and San Luis Obispo County real estate markets.

COVID-19 Information for Apartment Owners
By Steven R. Battaglia, 4/17/2020
The current pandemic has thrust our communities and world into unprecedented territory. News, government programs, laws and government orders seem to change weekly if not daily, and I have been tracking those that most affect multi-family investments.

Highlights

  • Governor Newsom ordered a moratorium on residential evictions thru May 31, 2020. Link
  • California Judicial Council enacted emergency rules expanding and extending moratorium on evictions additional 90 days after the state of emergency is lifted. Link
  • IRS extended tax filing deadlines to July 15, 2020. Link
  • IRS has extended time-sensitive deadlines for section 1031 exchanges. IRS Notice 2020-23 expands on prior COVID-19 tax deadline extensions to include time-sensitive actions, including deadlines for actions to be taken in delayed 1031 exchanges and reverse 1031 exchanges.
  • Real estate management and sales are deemed essential services.

Resources for more information

  • Santa Barbara Rental Property Association. Local support for multi-family property owners. Educational programs, social events, legislative representation, a network of experts, legal forms and tenant screening services. SBRPA is also a member of the National Apartment Assocation (NAA) and CalRHA (California Rental Housing Association).
  • Institute of Real Estate Management. COVID-19 resources and information for property managers.
  • I also have access to the California Association of Realtors (CAR) and National Association of Realtors (NAR) forms, bulletins, and other resources.

As a board member of both the Santa Barbara Rental Property Association (SBRPA) and the California Rental Housing Association (CalRHA), I stay current with new regulations, rulings, and proposed laws. You are welcome to get in touch with me any time to find out the latest information on the multi-family industry and how COVID-19 is affecting owners.

Steven Battaglia's Presentation to Rental Property Owners
By Steven R. Battaglia, 12/10/2019 & 12/12/2019
Steven shared information about new laws affecting the housing industry in California. Links relevant to that presentation:

Steven Battaglia presents to California Probate Referees Association
By Steven R. Battaglia, 10/7/2019
Steven shared information about new laws affecting the housing industry in California. Links relevant to that presentation:

Here's how California's rent control law would work
By Jenna Chandler, Los Angeles Curbed, 9/25/2019
Within the next few weeks, the governor is expected to enact rent control in California by signing Assembly Bill 1482. That means the state would begin to regulate how much your rent can increase every year, limiting it to 5 percent, plus the local rate of inflation. Once signed, the measure would take effect January 1 and expire in 2030 (unless lawmakers vote to extend it). Full article...

Tenant protection proposals and ordinances in Southern California
By Jef fCollins, Orange County Register, 8/18/2019
List of current proposals and ordinances, including AB1482, Rent Affordability Act, etc. Full article...

Proposed bill sets limit on rent increases, changes eviction rules
By Melissa Newman of KSBY, Local News Station, 7/2/2019
A new bill making its way through the California state legislature would put a cap on rent increases and add new provisions for evicting residents. Lawmakers see this as a step toward helping the housing crisis, while opponents of the bill say it may have the opposite effect. (Includes interview of Steven Battaglia) Full article...

Just Cause Eviction SEMINAR for Residential Rental Property Owners
Hosted by Battaglia Commercial Real Estate, 6/13/2019
Industry and legal experts joined us to discuss how "just cause eviction," which Santa Barbara City Council recently voted to institute, will affect multi-family properties in the area. Details and video...

Landlords win, renters take a hit. Just one tenant protection bill survives in California Assembly
By Hannah Wiley, Sacramento Bee, 5/30/2019
Landlords and realtor groups earned a win in the California Capitol this week after lawmakers shelved a bill to restrict evictions and amended another to limit caps on rent. The Assembly adjourned on Thursday without taking up Assembly Bill 1481, which would have established a "just cause" eviction law in California, prohibiting landlords from evicting tenants unless they violate the terms of their lease or fail to pay rent. On Wednesday, the chamber narrowly passed Assembly Bill 1482, which caps "egregious" rent increases. Full article...

SBAOR President's Message: City Council Advances Eviction Control
By Thomas C. Schultheis, Santa Barbara Independent, 4/23/2019
...On Tuesday, April 16th, after hours of testimony, the Santa Barbara City Council rejected two years' worth of negotiations and compromise conducted by the council-appointed Landlord/Tenant task force, which cost approximately $30,000. The Council voted 6-1 to approve the creation of an eviction control ordinance, commonly known as "Just Cause". Council-member Rowse seemed to be the only one who understood the negative impacts of ordinances such as these on both the landlord and tenant communities. Although it sounds innocuous, "just-cause ordinances" create conditions which make it very difficult to remove tenants who have no regard for their neighbors, destroy the property, or are involved in illegal activity. As a result, communities suffer heavy consequences, as nuisance conditions are not easily remedied. Full article...

Santa Barbara City Council Moves Ahead on 'Just Cause' Eviction Ordinance
By Joshua Molina, Noozhawk, 4/16/2019
The Santa Barbara City Council voted Tuesday night to require landlords to provide one-year leases to tenants — and took a huge step toward approving a "just cause" eviction ordinance. ... A Just Cause eviction ordinance would prohibit evictions except in cases where a tenant has failed to pay rent or otherwise violated the terms of the rental agreement. The council's vote means City Attorney Ariel Calonne will draft a proposed ordinance, which will next go before the city's Ordinance Committee. Full article...

Tasting Room for Sale or Lease with Daniel Gehrs retirement
By Daniel Gehrs Wines, March 2017
Daniel Gehrs is retiring after 40 years of "living the dream." "We have had the absolute joy of being a part of the community and doing what we love, and our hope is whoever buys the tasting room enjoys everything as much as we did," Daniel added. For anyone interested in buying or leasing the tasting room property visit
www.2939GrandAve.com. Full article…

Lompoc permitting, inspection programs put under the microscope
By Willis Jacobson, Lee Central Coast News, 1/17/2017
The Lompoc permitting process and its inspection program faced some scrutiny last week, as city officials attempted to explain why there's been a recent uptick in activity for the two policies. Full article...

1031 Tax Deferred Exchanges: How can I defer paying capital gains tax if I sell my commercial property?
By Steven R. Battaglia, May 2016
"The sale of a commercial property can create significant tax ramifications that must be considered carefully with wise counsel from your CPA or tax attorney and your real estate professional, especially if the asset has been owned for a number of years." Full article…

Regulators Concerned About Rising Risks in Multifamily Market
By Brian Collins, National Mortgage News, 12/18/2015
"Federal regulators are concerned about credit and interest rate risk on apartment and other multifamily loans — and warning lenders that they need to be cautious." Full article…

Multifamily Prices Could Stall With Interest Rate Hike
By Bendix Anderson, National Real Estate Investor, 10/13/2015.
"Apartment property prices may finally stop rising—and even begin to fall—when interest rates start going up. 'The assumption is that capitalization rates would jump higher with interest rates,' says Luis Mejia, chief multifamily economist with research firm CoStar Group." Full Article…

Taking A Look At Water Usage In Apartment Buildings
by Dave Alley, KEYT/KCOY/KKFX Reporter, 7/27/2015.
Discusses conservation methods for apartment communities, including encouraging tenants to "do the right thing," installing ratio utility billing systems ("rubs"), and using water efficient appliances. Full Article…

California Investors Shift Away From Single Family to Multi-Family Assets
By Miho Favela, World Property Journal, 5/8/2015.
"According to a California Association of Realtors (C.A.R.) survey of its members about their interactions with investors, with the depletion of available distressed homes on the market over the past two years, more investors are shifting to investing in multifamily properties and away from single-family homes." Full article...

Housing Density must be a Priority
Editorial in The San Luis Obispo Tribune, 3/25/2015.
"Mini-storage units will no longer be allowed to be built on land zoned for multifamily housing in the county's unincorporated areas, the Board of Supervisors decided Tuesday. Good decision. Given the serious shortage of low-cost housing in San Luis Obispo County, the board needs to send a clear message that multifamily land should be reserved for high-density housing, including apartments, condos and duplexes." Full article...

Steve Battaglia listed in Who's Who in Commercial Real Estate
By Pacific Coast Business Times, March 13-19, 2015
Steven Battaglia was listed in Who's Who in Commercial Real Estate in the March 13-19, 2015 edition of the Pacific Coast Business Times.

Steve Battaglia listed in Who's Who in Commercial Real Estate
By Pacific Coast Business Times, March 14-20, 2014
Steven Battaglia was listed in Who's Who in Commercial Real Estate in the March 14-20, 2014 edition of the Pacific Coast Business Times.

New 1031 Filing Requirements for California starting January 1, 2014
by Steven R. Battaglia, Battaglia Commercial Real Estate, 1/1/2014.
Starting January 1, 2014, all taxpayers who sell California property in a 1031 exchange and purchase a non-California replacement property will now be required to file the new "1031 Information Return" to the California Franchise Tax Board. This filing must be completed annually until the deferred gain is recognized. In June 2013, the California Legislature passed Assembly Bill 92 (AB 92) which added Sections 18032 and 24953 to the California Revenue and Taxation Code, creating the new filing requirement. With this new law in place, the Franchise Tax Board will be able to track gains from California-based 1031 exchanges. More info...

Apartment, Condo Markets Remain Strong
By National Association of Home Builders, Daily Real Estate News, 3/8/2013.
Builders and developers are reporting growing optimism in the apartment and condominium market. ..."The apartment and condo markets continue to improve as new household formations generate demand." Full article...

Steve Battaglia listed in Who's Who in Commercial Real Estate
By Pacific Coast Business Times, March 8-14, 2013
Steven Battaglia was listed in Who's Who in Commercial Real Estate in the March 8-14, 2013 edition of the Pacific Coast Business Times.

More Lenders, More Choices for Multifamily Borrowers
By Bendix Anderson, National Real Estate Investor, 2/8/2013.
Multifamily borrowers will have more choices in 2013, as more lenders compete to make permanent loans to apartment properties. ... "Low interest rates are prompting borrowers to finance, and improving property markets are helping more deals underwrite successfully. The relative strength of commercial and multifamily mortgages as investments continues to fuel lenders' appetites." Full article...

Is Multifamily's Meteoric Growth Built to Last?
By Mark Obrinsky, National Real Estate Investor, 12/19/2012.
Everything seems to be going right for the apartment industry. Demand is growing. New supply remains constrained. Rents are rising a little faster than overall inflation. Occupancy rates have rebounded to normal levels in most markets. Real estate investors still find apartments an attractive asset class and financing is mostly available. For the next few years, most analysts foresee rising rents, higher net operating income, modest price gains, available capital and an active transactions market. Is it all too good to be true? ... [The bottom line:] market fundamentals show that some potential threats to the industry's recovery and growth have been overstated. Apartment fundamentals provide a positive outlook, barring a replay of the single-family housing bubble or the Great Recession. Full article...

Apartment-Vacancy Rate Tumbles to 2011 Level
By Dawn Wotapka, Wall Street Journal, 1/5/2012.
"The nation's apartment-vacancy rate in the fourth quarter fell to its lowest level since late 2001 as Americans continued to favor renting homes instead of buying them. ... Multifamily property has been the star of the real-estate sector for more than a year, generating profits for landlords.." Full article...

Rent Control Hits the Supreme Court
By Richard A. Epstein, Wall Street Journal, 1/4/2012.
An opinion column on why "private apartment owners should not have to fund a public welfare program." Rent control adversely affects apartment owners by allowing "a tenant to remain in possession of property after the xpireation of a lease at below-market rents." Full article...

Why All Is Not (Uniformly) Rosy in the Apartment Sector
By Victor Calanog, Contributing Columnist, National Real Estate Investor, 12/27/2011.
"Multifamily properties have outperformed other commercial property types in the past two years, benefiting directly from the continuing travails of the for-sale housing market. ... Multifamily properties will continue to benefit from a convergence of positive factors: first, as the for-sale housing market continues to struggle, fewer households will make the transition from renting to owning a home. Despite record-low mortgage rates, credit still remains tight except for those with the best credit histories and capacity for large down payments. Although the rate of job creation remains moribund, the economy has created over 2 million jobs since 2010, and on the margin individuals are moving out of doubled-up households to rent their own places." Full article...

Nontraditional Lenders Gain Multifamily Market Share
By Susan Piperato, Managing Editor, National Real Estate Investor, 9/9/2011.
"Multifamily housing is leading commercial real estate's recovery with strong rent growth, rising values and high occupancies, which is enticing non-traditional funding sources—especially life insurance companies—to attempt to gain market share. James Tramuto, the Houston, Texas-based executive vice president of Jones Lang LaSalle's capital markets group, real estate investment banking, notes that major life insurance companies—including MetLife, Northwestern Mutual, Teachers, and Alliance—have been a big component of multifamily finance this year…." Full article...

Will Cap Rates Rise or Fall in 2011 and 2012? The Answer May Surprise You
by Victor Calanog, Contributing Columnist, National Real Estate Investor (NREI), 6/14/2011.
Summary statement. Full article...

Kennedy Wilson Buys 1,008-Unit Apartment Complex in California for $140.5 Million
by National Real Estate Investor Staff, 6/1/2011.
Real estate investment firm Kennedy Wilson and its partners have acquired Bella Vista at Hilltop, a 1,008-unit multifamily community in San Pablo, Calif., for $140.5 million. The sale represents the largest single multifamily transaction by number of units thus far in 2011, according to Real Capital Analytics. Full article...

Excerpt from Foreclosure Radar Report, February 2011
by Steven R. Battaglia, Battaglia Commercial Real Estate, 3/22/2011.
Foreclosure activity slowed significantly across the board in February with filings down in Arizona, California, Nevada, Oregon and Washington. Foreclosure sales saw a similar deep dip throughout our coverage area, a dramatic about face from the surge in sales seen in January. Full article...

Economic Turnaround Underway in 2011
by Steven R. Battaglia, Battaglia Commercial Real Estate, 3/3/2011.
In this summary of the 2011 Santa Barbara County Real Estate and Economic Forecast, Steve shares, "In short, the recession is over, and we have been in recovery for most of 2010, so we can expect to see concrete signs of a turnaround in 2011." Full article...

Commercial Real Estate Vacancy Rates to Decline but Rent Recovery Delayed
by Walter Molony, National Association of Realtors, February 25, 2011.
A stabilization trend is taking place in commercial real estate sectors, but in most markets rent will remain soft except for multifamily rentals, according to the National Association of Realtors. Full article...

Housing Woes Fuel Apartment Surge
by Dawn Wotapka, Wall Street Journal, 1/29/2011.
"Falling home prices and lethargic sales have been bad news for homeowners, but a boost for one group of real-estate investors: apartment-building landlords. " Full article...

Landlords Seize Upper Hand in Apartment Market
by Dawn Wotapka, Wall Street Journal, 1/31/2011.
"...falling home prices and lethargic sales have given a boost to the apartment sector, with plenty of people willing to become landlords. With millions of families switching from being homeowners to renters, apartment-building values have soared." Full article...

Field Guide to Multi-Family Property
from National Association of Realtors, January 2011.
Have you ever thought about investing in rental property? Apartment buildings, condominiums, rental housing... all of these properties can be lucrative investments. Or they can be disastrous money pits!!! In this Updated Field Guide you will find articles covering not only investing in multi-family properties, but also what to do with the property once it's yours. Full article...

Apartment Market Looks Strong Going Forward
by Dees Stribling, Contributing Editor, Multi-Housing News, 11/16/2010.
"The latest quarterly report by Prudential Real Estate Investors (PREI) on the state of U.S. commercial real estate confirms that the multifamily rental market is in good shape, and that apartment owners have much to look forward to. The outlook for apartments is driven by fairly simple-to-understand economics: Demand is going up, but supply is not." Full article ...