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The McConnell Report • January 1, 2009

Happy New Year!

These days it is hard to read the news. Every morning the headlines are the same. The economy is bad. Two million people are losing jobs. A new crook is identified who stole money through a fraudulent investment scheme. A politician tried to sell a Senate seat. Wall Street and the automakers need bailouts. Foreclosures are up and property values are down. 

It is not surprising that in a recent survey most people said 2008 was the worst year they can remember. Well there is good news. As I write this column, there are only twelve days left in 2008.

In truth, not everything was so horrible about the last 12 months. For one thing, the country came together and showed the world that the American dream is very much alive and well and that our country remains a place where anyone has a chance to become anything they want to be. Think about it, a skinny kid with big ears and a brown face, who is the child of parents of different races and nationalities and limited means, will soon be the President of the United States of America.

I remember an exchange I had late last year when I told a friend that Obama would win the election. He said I was a delusional optimist. I must admit, at the time there was more reason to agree with him than not.  But there was something that told me that people would see through their biases and elect the person best suited to be president. I felt sure that person was Barak Obama. An optimist I proved to be, but not delusional. Along with 4 million other folks, I will be there to see him sworn in on January 20, 2009.

Now, I will make another prediction to really show just how crazy I am. I predict that we will emerge from this climate of bad loans, greedy corporate frauds, and living beyond our means to become a better country and a place where hard work and prudent investment pays off. 

In just a week or two, we will usher in a new year. Most “experts” believe that 2009 will be another bad year for the economy. According to them, we have yet to hit bottom. That, they say, will not happen until mid to late 2009 or maybe even 2010. I don’t know, and I am not sure they do either. The one thing we have learned recently is that the “experts” who claim to have all the answers have been consistently wrong.

What I do know is that we will get through this, however long it takes and however much pain we have to endure. 

My confidence comes from the people I surround myself with. Last week, I went to the BPOA dinner meeting. A hundred or so people came out. Many old friends whom I had not seen in years were present. We joked, talked about getting older, how the kids were doing and as we always do, talked about ways to get rid of rent control.

To my delight there was no “woe is me” in the room. Everyone was positive and upbeat. 

That dinner reminded me of the importance of BPOA to its members. Yes, we do advocacy. Yes, we share information about dealing with rent control and property management. Yes, we even do some deals. But the most important thing we do is hold each other up and offer cheer in good and bad times.

After the meeting I thought about a couple of good people that I have had the good fortune to be associated with through BPOA who have passed away. I remembered Susie Hing, a five foot giant, who used to ring her Salvation Army Bell on College Avenue. She started with nothing, pinched together nickels and dimes and ended up a very successful business woman. I thought of my good friend Ed Munger who passed this year. Ed always said, “Live right, work hard, play by the rules, (including the rent control rules that he hated) and everything will take care of itself.”

I also thought about my mother who passed away this year. I thought of the storms that she faced raising five children and how she remained optimistic that she would always get us through. And she did!

So, with everything I have seen and all the people with whom I have been blessed to be associated, how can I be anything but optimistic? No matter how bad the times are now, this won’t last forever and all of us will get through this if we just stick together.

I wish each and every one of my readers a peaceful, healthy, and prosperous 2009.

Happy New Year!

I also want to report on a rumor that rent controlled property owners are entitled to a 10% rent increase for soft story retrofit work. A recent SF Chronicle article reported that a seismic retrofit expert stated in a meeting that, under a state law, owners who did seismic retrofits on soft story buildings could increase rents in perpetuity by ten per cent. A lot of people were excited by this news. 

I was surprised because I had no knowledge of this state law. And, after all, tracking this kind of stuff is part of what makes me tick. 

I can find no evidence that such a state law exists. What I think these people were referring to was a SF law which allows a 10% maximum capital improvement pass through for properties with 6 or more units. 

So, BPOA members, unless there is more information out there that I have not been able to find so far, don’t get excited about this news flash.

Greg McConnell is the principal consultant at The McConnell Group, a consulting and advocacy firm that specializes in housing issues and advises apartment and housing associations, property management companies, and individual owners throughout California. For more information about The McConnell Group please visit

© This article is copyrighted and cannot be republished without the consent of the author.


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