A Tribute to the Trophies
SFAA is pleased to announce that its 2011 Trophy Awards were the most successful yet, with a sold-out crowd of owners and industry professionals enjoying a wonderful evening in the beautiful atrium of the Palace Hotel. Everyone enjoyed the show and awards presentation, especially the Trophy Award winners! SFAA would like to thank all of the wonderful sponsors and ticket holders, who made the evening such a success. Also, special thanks to SFAA’s Deputy Director Vanessa Khaleel for her fantastic work organizing the event.
The 2011 award winners are posted here.
SFAA would like to congratulate all of the 2011 winners, who will each be profiled in the February issue of SF Apartment Magazine. Also, tune into the February issue for many photos of the elegant evening.
An Incentive to Upgrade
The time to take advantage of the San Francisco Boiler Systems Incentive Program is now. The incentive program provides financial relief for energy-efficient upgrades funded by the American Recovery and Reinvestment Act of 2009, along with no-cost complementary technical assistance to identify and implement energy efficiency improvements. The program runs only though the end of this year, or until funds run out.
The program was developed to promote the replacement of inefficient hot water and low-pressure steam boilers located in multifamily properties. (Many of these multifamily properties have original boilers as old as the buildings themselves, dating from the 1930s.) As part of those efforts, the ARRA-funded program expects to reduce natural gas usage by approximately 399,000 therms and green house gas emissions by 2,122 metric tons during the 2010-2012 program cycle. The city plans to accomplish these goals by assisting businesses in adopting a variety of heating system upgrades of: heating boilers, hot water heaters, steam traps, air vents, pipe insulation, radiators, thermostats, premium efficiency pump motors and variable frequency drives.
To receive financial incentives from the program, contact the San Francisco Department of the Environment prior to starting your project(s). A pre-installation inspection is required and an incentive application must be submitted for approval before installation work begins. Upon completion of the project, a post-installation inspection must be conducted.
For additional information regarding the San Francisco Boiler Systems Incentive Program, including applications to participate, please contact Program Administrator Matt Greco at 415-355-3708 or Matthew.Greco@sfgov.org.
EPA Auditing Owners and Managers
Now that some time has passed since the new lead-paint safety guidelines went into effect, the EPA is stepping up its enforcement of the Renovation, Repair and Painting Rule. The agency has been sending out audit letters asking owners for a variety of information, such as copies of all leases since 2008 (when the law went into effect), lists of all children who lived in the units since 2008 and their ages, a list of all work done on the units since then, and information on the people or companies who did that work.
According the EPA’s enforcement guidelines, “EPA reserves the option, in appropriate circumstances, of seeking large penalties. Unfortunately these large penalties could cause bankruptcy, or result in a respondent’s inability to continue in business.” The fines for even small infractions are considerable: $37,500 for failure to vacuum carpets and rugs with a beater bar attachment after work; $30,000 for not keeping records properly; and, $16,000 for failure to provide the new EPA pamphlets. All of those penalties are per day, per violation. SFAA hosts several lead certification classes each year. Make sure that you, your employees and your contractors are certified to deal with lead the right way. In this case, ignorance could be quite costly.
SF Could Tweak Payroll Tax
Twitter’s payroll tax exemption has renewed talk of an overhaul or possible termination of the tax, with the San Francisco Controller’s Office examining the options in a new study. The controller’s office will consider a gross receipts tax, among other possible options to replace the payroll tax, according to Ted Egan, the city’s chief economist, who will be joined by a second economist for the study.
The tax has been criticized for years because, according to its various detractors, it does not encourage job growth and is only paid by 8,000 of the city’s 80,000 businesses. (Businesses with a payroll under $250,000 are not subject to the tax.)
The San Francisco Board of Supervisors made big news last year when they voted to exempt Twitter from the city’s payroll tax for six years in a bid to keep the tech giant in the city. The supervisors approved an ordinance to give businesses an exemption from having to pay the 1.5% city payroll tax for the next six years, as long as those businesses are located in the city’s Tenderloin and Central Market Street areas. Twitter is moving its offices to the old SF Mart building on Market Street later this year.
The tax break pertains to the newly hired employees of companies that move into or are remaining in the Central Market and Tenderloin areas over the next six years. Businesses, however, would still have to pay the 1.5% payroll tax on employees they already have.
The payroll tax is a particular problem for startups because it includes any money made on stock options. That is a major concern for tech firms thinking of taking companies public, such as Twitter. The payroll-tax break could lead to Twitter saving about $22 million in taxes over six years, according to the San Francisco Chronicle.
Few New Residential Buildings in 2011
Not one market-rate housing project of more than 30 units opened in 2011, according to the San Francisco Business Times, and very few projects of more than 10 units opened their doors. After an unscientific survey of new condos and apartment projects, the biggest two projects the Times could find was the 21-unit 788 Minna and the 26-unit 1840 Washington St.
Units in the high-end buildings are selling, according to their developers, but at prices much lower than they saw just a few years ago. At the Minna Street project, units are priced between $427,000 and $549,000. That is $100,000 less per unit than the developer received for a very similar project built a few years ago at nearby 776 Tehema St. However, construction costs have also gone down, which makes the lower sale prices more palatable. The good news is that 2012 should be better. AvalonBay will complete its 173-unit apartment complex by City College. Bosa Development will wrap up the 329-unit Madrone in Mission Bay.
Rent Board Announces Allowable Rent Increase
The San Francisco Rent Board recently announced the new annual allowable rent increase. For the period between March 1, 2012, and February 28, 2013, the increase is 1.9%. This is a sizeable increase over last year’s allowable rate of 0.5%. The annual rent increase is based on 60% of the percentage increase in the consumer price index for all urban consumers in the Bay Area. For more information on these increases and other rent board rules, contact the rent board at 415-252-4602.
California Law Expands Multifamily Recycling Requirements
Governor Jerry Brown signed legislation to require recycling programs for every multifamily residential complex with five units or more. While it is the intent of the law to allow local jurisdictions the flexibility to develop and maintaining solid waste recycling programs, state law sets a basic outline for solid waste reduction in commercial and multifamily properties. Here’s what the law provides: on and after July 1, 2012, a multifamily residential dwelling of five units or more must arrange for recycling services, consistent with state or local laws or requirements, including a local ordinance or agreement, applicable to the collection, handling or recycling of solid waste, to the extent that these services are offered and reasonably available from a local service provider.
The multifamily property owner must take at least one of the following actions: Source separate recyclable materials from solid waste and subscribe to a basic level of recycling service that includes collection, self-hauling, or other arrangements for the pickup of the recyclable materials; and/or subscribe to a recycling service that may include mixed-waste processing that yields diversion results comparable to source separation. The property owner of a multifamily residential dwelling may require tenants to source separate their recyclable materials to aid in compliance with the law.
Local governments are not required to implement any new programs. If they currently have a commercial and multifamily solid waste recycling program that meets this solid waste reduction percentage—as many already do—the local jurisdiction is not required to implement a new or expanded commercial solid waste recycling program. Cities and counties without a program for the diversion of solid waste, however, must implement one. Local recycling programs must include education, outreach to, and monitoring of, businesses.
In draft state, regulations currently under consideration at the state level, a city or county that adopts a recycling program may consider exemptions that take into consideration: (1) zoning requirements, (2) lack of sufficient space in multifamily complexes to provide additional recycling bins, (3) lack of markets for recycled materials, and/or (4) the current implementation by an owner of onsite programs that result in the recycling of a significant portion of the property’s waste. Stay tuned to this column for an update once the final regulations are adopted.
Flag Etiquette
This past Veteran’s Day many building owners decided to show their support for our country by placing American and California flags in their lobbies. However, some owners do not know the correct way to display the flags, according to Martin T. Lyon, chairman and CEO of the American Flag Display Protocol Committee of the American Legion. Lyon says that, in accordance with The Federal Flag Code, the American flag should always be to the left of the entrance, as viewed from the street. The California State flag should be to the right of the entrance.