Our ACTION owners’ education meeting on January 7, 2008 got us off to a great start for the new year. It was particularly fact-filled and interesting, leading off with special guest speaker Robert Holbrook, Santa Monica council member & former mayor.

He gave us a comprehensive report on Council activities. Some proposed and on going activites were most exciting but others– better not go there.

Albinas Markevicius (Mr. Mark to most of us) President of the California Lithuanian Credit Union and CFO Antanas Garbauskas welcomed ACTION members to take advantage of the many befits offered by this credit union. Elsewhere in this issue of WAM, you’ll find an article on how a credit union works. It is most helpful for those of us who have never participated in a credit union. They have great rates.

A representative of Southern California Edison, Biola Shofu, explained how owners with 10 units or more can sign-up for a Zero Cost Edison Rebate on energy efficient bulbs, fixtures and installation. Interested? Call the ACTION office and we’ll hook you up with Ms. Shofu.

We now have official ACTION meeting photographers. Long time ACTION members Halil Parlar and able assistant Josette. Thanks, Halil and Josette.

I recently addressed a very well attended group of owners, sizeable property management/leasing companies, and suppliers of products and services for the rental housing industry.

Part of my address dealt with the “good old days” and another with my take/forecast for the current year. Some in the audience were much too young to remember good old days, but other nodded that, yes, they remember when gas was $1.00 or less, insurance companies would compete for your business, plumbers and other service providers would
promptly return calls, and equally important…city and state government would let you run your business.

Well, that is all gone, along with 2007. Gas is well above $3.00 a gallon and going higher. Insurance quotes take far longer and the bid is from a company you never heard of. Plumbers are $70-85 per hour, and government regulation is at its apex.

I remember when you could replace a hot water heater for around $100. Now it runs around $900. I said $900! How could that be? Well, a new 30-gallon hot water with the new California mandated flame arrester is $486.00. A Santa Monica building permit is $149. The cost of labor to deliver, pull the permit and install is $250. That totals $885 and that is without any additional fittings or alterations. If the pressure relief valve has to be vented outside the unit , that’s extra.

And if you haven’t heard… more good news. Effective January 1, 2008 a new ordinance requires installation of earthquake gas shutoff valves in new and existing buildings in the following cases:

• New Buildings– a shutoff valve shall be installed on the main piping serving the building and/or each individual meter.
• Existing Buildings– a shutoff device shall be installed when alterations or additions exceeding $10,000 in valuation are made to the building or individual units within the building.
• Sales or Agreement to Exchange– a shutoff device shall be installed when a building or condo unit is sold or an agreement to exchange is entered into.

An unreasonable hardship exemption can be granted if the cost of installation exceeds 20% of the cost of alteration.

I believe 2008 will bring even more government regulation and meddling than ever before with how you run your business. Of course, the mortgage meltdown has not helped. There will be increased regulation on lenders which are the life-blood of our industry. Without reasonable financing, values are adversely affected. I am not predicting there will be a slide in values like that of single family homes in the Inland Empire but there will be a negative impact on the marketability of apartment building throughout California. I believe that with the recession, rents will probably slid a little as tenants become more cost conscious.

And while we might have a slide in value of our buildings, I don’t believe it will be as bad as the correction facing the stock market. After all, Wall Street bought most of the sub-prime mortgages., which propelled the housing market to stratospheric heights.

AND to keep you up to date on our nefarious nemesis, the Santa Monica Rent Control Board: Mary Ann Yurkonis (aka the Mighty Yurko) has retired as administrator after 20 plus years. Tracy Condon replaces her.
AND an incredible admission from Rent Control Board Chair Jeffrey Sklar:

“Rent Control is not a law to help low income people. It was never designed for that.”

Thanks to Mat Millen for monitoring the RCB meetings and bringing it to our attention.

Please read Jim Jacobson’s Rent Board Stories for complete details and he’ll link you to You Tube to see for yourself. At our next meeting we’ll tell you just how we plan to use for our political advantage!