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Why property owners should consider renting out to Section 8 households

Johnny Burks, who had a long career as a youth educator in Oakland, has straightforward advice for parents who want to set their children up to succeed.

“The best thing a parent can ever do for their children is give them a peaceful night’s sleep where they can dream,” Burks said.

But Burks, a former guidance counselor at Castlemont High School and the founder of Project Reconnect, a juvenile intervention program in Alameda County, understands that ensuring a peaceful night’s sleep is hard for parents who struggle to keep a roof over their heads.

The city of Oakland wants to give those families a break, but it needs help from people like Burks.

In January, Oakland began a program that gives financial incentives to landlords renting Section 8 apartments to low-income families, and Burks was one of 64 owners who joined the new program through June.

Burks is doing his part to curb displacement. He owns two four-unit buildings in East Oakland, and five of the eight apartments he owns now have Section 8 tenants.

Section 8, run by the Department of Housing and Urban Development, gives housing vouchers to low-income families, the elderly, the disabled and veterans. The average annual income of a Section 8 tenant in Oakland is $19,370, which doesn’t go far in a city where the average rent for an apartment is $2,527, according to RentCafe, a real estate tracking website.

For many low-income Oakland residents, Section 8 is the last hope to stave off homelessness.

Section 8 landlords are the largest provider of affordable housing in Oakland, according to Mayor Libby Schaaf. But from 2012 to 2016, the number of landlords accepting Section 8 fell from 5,374 to 4,254, according to data from the Oakland Housing Authority, which administers the HUD program.

 

 

 

Read more on SF Gate

 

 

 

Oakland leaders declare Section 8 landlord incentive program a success

An incentive program aimed at bringing new landlords into the Section 8 low-income housing program — and keeping them around — has yielded positive results, with hundreds of new units added this year, Oakland city leaders announced today.

The three-tiered incentive program was launched by the Oakland Housing Authority in January. As of June 30, 75 new property owners had signed up to accept Section 8 housing vouchers.

“In just six months, 684 families have found stable, secure, affordable housing in Oakland. That is something to celebrate,” Mayor Libby Schaaf said at a press conference today.

Section 8, a federal program that provides rental assistance to qualifying low-income families, has been struggling in Oakland in recent years.

From 2015 to 2016, the Section 8 program shed more than 1,000 owners, according to Eric Johnson, executive director of the Oakland Housing Authority.

Since then, the program has been in “recovery mode,” he said, looking for ways to attract new owners.

“It can be a challenge to get to know us,” Johnson said. “We have lots of forms, and the first time through them is not easy.”

At a 2016 cabinet that discussed ideas to address Oakland’s housing and displacement crisis, city leaders identified incentives for Section 8 landlords as a priority.

 

 

Read more on Hoodline

 

 

Richmond vacant property tax headed to November ballot

Richmond voters in November will decide whether to tax vacant properties to pay for homelessness services, affordable housing and other things.

The vacant property tax measure was inspired by one in Oakland, which was approved for the November ballot a few weeks ago, said Richmond Mayor Tom Butt. If Richmond voters pass the measure — it needs a two-thirds majority vote — a special parcel tax will be placed on vacant properties at the rate of $3,000 a year per vacant developed parcel and $6,000 a year per undeveloped parcel.

The tax would generate an estimated $5.4 million a year for the next 20 years, according to a report from Butt and Councilman Eduardo Martinez. That money will be earmarked for homelessness services, housing, blight, fighting illegal dumping and other specific programs.

There are 980 to 1,180 vacant parcels in the city and 250 vacant structures — most of which are abandoned homes, the report said. About 998 would be subject to the tax.

“In addition to creating a dedicated funding source, by taxing vacant properties, this measure will help encourage people to put those properties back into use, thus increasing the housing supply,” Martinez and Butt said in the report.

The measure passed unanimously at Tuesday’s City Council meeting. Only one member of the public spoke on the measure; she was concerned that a vacant lot that she has owned since the 1980s and had turned into a garden would be taxed. City officials at the meeting said it would not be subject to the tax.

Property would be classified as vacant and subject to the tax if it is used less than 50 days a year. The tax would not apply to properties used as gardens or to host farmers markets, the report said.

A hardship exemption would be available to people who qualify as “very low-income” under the U.S. Department of Housing and Urban Development’s guidelines. Very low-income is defined by the federal Department of Housing and Urban Development as households who make 50 percent of the area median income. For Richmond in 2018, a family of four with an income of less than $58,100 would be classified as very low-income.

Vacant property owners who can prove that specific circumstances prevent the use or development of the property are also eligible for an exemption. For example, if a natural disaster damaged the property, or if an undeveloped property was being used as a yard for an adjoining property, it would be exempt. If the measure passes in November, the City Council would include details of that exemption in a  separate ordinance, the report said.

 

 

Read more on East Bay Times

 

 

 

Oakland to vote on property tax, owner move-in eviction measures

Oakland voters in November will be deciding on three new measures.

The three new measures include a tax on vacant properties, increase the real estate transfer tax rate for properties worth more than $2 million and disallow landlords from evicting tenants on the grounds that the landlord lives in the property.

The vacant property tax, which must pass by a two-thirds majority, would impose a special parcel tax on all vacant property — including lots, industrial and commercial buildings, and units in apartment buildings and other multi-unit buildings like condo or townhouse complexes.

The measure was passed during Tuesday’s marathon city council meeting which lasted into the early morning hours of Wednesday. Landlords spoke out against the measures, mostly claiming they would put an unfair burden on small “mom-and-pop” landlords who may only have one rental property and rely on that income. Tenants’ rights activists supported the measures, and shared stories of landlords treating tenants unfairly, as well as the need for housing.

 

 

Read more on East Bay Times

 

 

 

Mall tenants had an out when giants like Macy’s left. Now landlords bar the door

The only thing more dangerous for America’s malls than a string of apparel-chain bankruptcies is when the trouble hits department stores.

Retailers like J.C. Penney Co. and Macy’s Inc. are considered “anchors” that keep malls humming and foot traffic flowing. They’re so important to the ecosystem that smaller tenants may refuse to set up shop without a promise that the anchors will stick around: Many leases include so-called co-tenancy clauses that let them cut and run or pay less if those key tenants depart.

Now, many landlords are pushing to eliminate or narrow the escape clauses in the wake of mass department-store closings. That means less flexibility for the remaining tenants.

 

Read more on Bloomberg

 

 

Is proximity to mass transit becoming less of a draw for apartment renters?

In the few years since companies like Uber and Lyft began to offer their ride sharing and carpooling options to riders in San Francisco, the premium earned by apartments near mass transit has dropped.

Apartment dwellers have traditionally been willing to pay a premium to live near mass transit stops in urban markets. But fueled by the proliferation of ride-sharing services, a rise in use of electric vehicles and other factors, that allure has begun to lessen in the Golden Gate City and that effect could spread elsewhere, according to new findings from MetLife Investment Management.

“When we look at what makes real estate assets most attractive to tenants, access to transit has traditionally been near the top of the list,” says Adam Ruggiero, head of real estate research for MetLife, which recently released its new report, “On the Road Again: How Advances in Transportation Are Shaping the Future of Real Estate.”

Apartment renters have more options to get around, which may be diluting the amount of extra rent that they are willing to pay to live near a subway stop or light rail station. In the few years since companies like Uber and Lyft began to offer their ride sharing and carpooling options to riders in San Francisco, the premium earned by apartments near mass transit has dropped—but not disappeared.

“It might lower the spread but it does not erase the spread,” says Justin Bakst, director of capital markets for CoStar Risk Analytics, which provided data for the MetLife report.

The introduction of ride sharing and carpooling services in San Francisco coincided with a decline in rental premiums for on-transit apartments (defined properties within a five-minute walk of a transit stop) from a historical average of 20 percent to only 15 percent today, according to the MetLife report

 

Read more from National Real Estate Investor

 

 

San Jose makes changes to housing policy

The San Jose City Council voted to allow landlords to evict tenants convicted of violent felonies.

As development in San Jose explodes and housing prices continue to soar, the City Council on Tuesday night adopted changes to the city’s housing policies that could benefit renters and provide protections for landlords.

At the Housing Department’s recommendation, the council agreed to prohibit landlords of rent-controlled apartments from dividing utility costs based on how many people live in each apartment and the unit’s size rather than how much gas or electricity they actually use. So the council is asking property owners to install sub meters at each apartment so families are charged only for what they actually use.

The council also tweaked the tenant protection ordinance it adopted last year, and will now prevent landlords from threatening to share information about their tenants’ immigration status with immigration authorities.

The city also will let landlords evict tenants with serious or violent felonies. Acknowledging concerns about the displacement of families, landlords must give renters a chance to evict such felons before ousting an entire family. Mayor Sam Liccardo supported the idea, and asked the city to provide an exception for children convicted of such crimes.

Also up for debate was an issue around the Ellis Act, which outlines when and how the owners of some rent-controlled apartments in the city — generally those built before September 1979 — can take them off the market.

Read more from The Mercury News

SF settles with landlord who rented ‘substandard housing’ to veterans

A Bayview district landlord accused by City Attorney Dennis Herrera of banking millions of dollars by squeezing formerly homeless veterans into cramped illegal dwelling units has agreed to pay the city a $2 million fine and bring all the buildings she owns into compliance with the law.

The terms of the settlement, which was reached last week on the eve of a trial of a city lawsuit, requires husband-and-wife landlords Judy Wu and Trent Zhu to bring 12 properties up to San Francisco building, fire and planning codes.

In a statement, Herrera said that Wu and Zhu “trafficked in substandard housing that endangered their residents and neighbors alike.”

“There is a reason we have building codes,” Herrera said. “They exist to prevent dangerous situations, like an improperly installed stove exploding and starting a fire that tears through a neighborhood.”

The lawsuit against the property owners identified 12 buildings with 15 legal units that were chopped up into spaces for 49 individual tenants. The leases, which brought in about $1 million a year in rent, contained jerry-rigged natural gas and water lines. Neighbors complained of over-crowding, noise, and sidewalks and backyards that became littered with mattresses, discarded furniture, stray cats and mounds of old clothing.

Read more from SFGate

5 Ways to Vet Potential Commercial Real Estate Tenants

Don’t expect landlords to rent out their commercial space to the first tenant who puts in an offer. In many cases, landlords have a lot of variables they consider when deciding to accept an offer to lease. This can include things such as background checks, reviewing tax returns, credit reports and references or even just connecting personally with a tenant. Here are five ways to vet a potential real estate tenant.

Read more from NAI Global