August 2015 News for Berkeley Property Owners & Housing Providers
Next Members Meeting
SELLING PROPERTY TAX EFFICIENTLY
A SPECIAL BPOA WORKSHOP
THURSDAY, SEPTEMBER 10TH, 6:15PM
Tax deferral solutions when selling investment property, personal residences, LLC's, partnership interests and more.
Learn from the experts in IRS Section 1031 Ralph Bunjie, IRS Section 453 Stanley Crow with "best practices" for pre-sale tax preparation Charles Thompson. Each with over 35 years experience.
A must attend for those considering selling their property interests in "tax heavy" California
Learn the tax incentives available for personal home sales,
investors and corporate entities — they have done it all.
check the calendar for more information
When in the Course of Human Events...
The Sukoff Perspective
No one has ever claimed that rental property owners are the most popular group in Berkeley. Many Berkeleyans still subscribe to the sixties mantra that equated rent with theft. Nevertheless, I (and I hope most of you) have no qualms about owning rental property. I have stewarded and/or created more than 250 housing units over the years and take some pride in what I do. If you are a responsible property owner, you should do so too.
That said, we must acknowledge that there are irresponsible people in real estate, as there are in virtually every other field. We must also acknowledge that there is a legitimate role for the community-at-large - read the government - to dissuade, preclude and/or punish true irresponsibility. But with that said, we can also acknowledge that government regulation often goes too far. In the name of protecting us, the community (through its government) can also be irresponsible - not to mention officious, obstreperous, confiscatory, intrusive and/or foolish.
Where is Thomas Jefferson when you need him? "When in the course of human events...they are endowed with certain unalienable rights, among them..." The original draft of the Declaration of Independence said life, liberty and property. No doubt the founders - Franklin was Jefferson's primary editor - found happiness more inclusive than property, but rest assured, the pursuit of happiness included the right to property in the minds of the founders.
They found that to be self-evident.
And so welcome to the latest arrival on the local scene, the Berkeley Rental Housing Coalition. It cannot be said to represent we, the people nor does it comprise a Declaration of Independence. It does, however, establish and ordain an organization to address our rightful grievances to the government which shackles rental housing in so many ways. And, to quote another revered figure from American history, "it is altogether fitting and proper that we do this."
The BRHC has been established to represent the interests of rental property owners in the forums of legislatures and the halls of justice and to give property owners a voice when policies and programs affecting rental housing are created This newly formed affiliate of BPOA has asked that all Berkeley owners make a voluntary commitment to defend their interests in an amount equal to the involuntary contribution exacted by the citizens of the City of Berkeley and fixed by a wholly antagonistic Rent Board If you hesitate to participate, I suggest you review with me a bit of local history. For Berkeley owners, the two most significant events since the institution of rent control have been the Searle decision and the passage of Costa/Hawkins. Here are two victories - one judicial and one legislative - which have dramatically changed the value of your investment in Berkeley rental property. These two judgments are responsible for half your rents and almost all of your cash flow.
BPOA can take little credit for the Searle decision. It was Dagmar Searle's dogged pursuit of her own interest that brought about this victory. The earlier decision which declared the 1972 rent control ordinance unconstitutional did so mainly because there was not an adequate provision for individual rent increases. Rent control advocates took this into account in the 1980 ordinance and did provide for an IRA. It took Dagmar's personal expenditure of time, energy and money to get a court to recognize that inflation must be a mandatory component of the IRA. Kudos and thanks to Dagmar for doing this; shame on the rest of us for not accepting the burden of this lawsuit and pursuing this effort collectively and earlier.
BPOA can take some very real credit for Costa/Hawkins. The votes for vacancy decontrol were apparent in both houses of the California legislature for years before Costa/Hawkins passed. Jim Costa had introduced bill after bill over that time, only to have access to a vote blocked by the steady opposition of Democratic leader David Roberti, an out-spoken rent control advocate, and by fence-sitting by our own senator, Nick Petris, who was Chairman of the Judiciary Committee at that time. Petris' opposition was based more on politics than principle. It was only with the steady pressure of Greg McConnell, supported by BPOA, that Petris remained open to decontrol. When property owners who Petris knew personally were mistreated by the rent board, the Senator finally realized that the owners' stories he had heard over the years were more than self-interested whining. He reversed his position, supported the Costa bill, and, as they say, the rest is history.
The moral of both these stories is that, under the right circumstances, there is relief available from elected officials and the courts. It does, however take time, concerted effort and beaucoup bucks to get there. It also takes organization and competent representation. Had there been an effective BRHC in the 1980s or 1990s, rent control in Berkeley might have had a very different history. Like it or not, what legislative bodies do matters to us as property owners. The government of the State of California is decidedly controlled by Democrats, but it is not blindly progressive. The City of Berkeley is even more to the left, but it is safe to say that only three of nine councilpersons are totally unsympathetic to our concerns. The legislators in these bodies will listen to reason, but only if someone is articulating reasonable positions effectively. The BRHC can make a difference.
The Rent Board, on the other hand, has eight of its nine members who believe us to be downright evil and who will deny us our needs and undermine our rights at every opportunity. They routinely exceed their authority and will continue to do so unless challenged. A Grand Jury found them to be abusive. They ignored the Grand Jury conclusions. The courts, if asked - but only if asked effectively - will likely agree with the Grand Jury. There are a half-dozen lawsuits which could likely succeed in clipping the wings of a renegade Rent Board.
The Rent Board takes $4 million of your money each year and largely squanders it, spending more per unit than any rent control board in California. And now they - illegally, we believe - want more. They no longer have most of their initial functions. The AGA is automatic. They have virtually done away with the IRA process. They routinely deny reimbursement for capital improvements. And keeping a database of legal rents is hardly necessary now that Costa/Hawkins is in effect. With more and more money to do less and less, all that is left is ideological mischief. Enough is enough.
BRHC is seeking a lot of money to wage this battle. We need and intend to collect at least a half million dollars a year for a minimum of five years. Can we afford to do this? Can we afford not to? Join us in this historic effort to bring balance to rent control as practiced in Berkeley
The New Non-Smoking Brochure and
Lease addendum are available
online for members in our
If you are not a member yet and would like to see a list of BPOA-maintained forms along with brief descriptions, you can do so here.
Low Income Landlords?
Find Eviction Help Here
Too Much Stuff?
Some Tips on Helping Tenants
THE ALAMEDA COUNTY GRAND JURY HAS ISSUED A REPORT EXCORIATING THE BERKELEY RENT STABILIZATION BOARD
....(and the League of Women Voters Agree!)
Click for the full report:
It begins on page 63 and runs to page 74.
The Report concludes with the following recommendations:
- Recommendation 12-10:
The Berkeley Rent Stabilization Board must reduce the high rental unit registration fees.
- Recommendation 12-11:
The Berkeley Rent Stabilization Board must allow landlords to pass through a larger proportion of the registration fee to tenants.
- Recommendation 12-12:
The Berkeley Rent Stabilization Board must ask the city of Berkeley Human Resources Department for a thorough position-control audit to evaluate the number of staff, the classifications and workload.
- Recommendation 12-13:
The Berkeley Rent Stabilization Board must ask the city Human Resources department to provide more comprehensive salary comparisons regularly and use them in setting salaries and benefits, including those of the executive director and the board members.