DBI Passes Big Fee Increases
Fees for a wide range of permit services will be going up, according to a fee adjustment proposal recently approved by DBI’s Building Inspection Commission. The BIC acted after reading a cost of services study, a comprehensive report on just what it costs the department to provide services ranging from plan review to permit issuance to inspection. Commissioners determined that the department’s current fee structure is, on average, 29% less than the actual cost of providing these services.

Therefore, the BIC recommended increasing permit fees by roughly that amount, increasing plan review and building inspection fees by around 20%, establishing new fixed fee categories with a guaranteed minimum of service, increasing the hourly rate for department services, more than tripling the fee for 3R reports, and creating new fees for new programs like over-the-counter appointments.

Surprisingly, there was not much protest from the community over the increases. SFAA Government and Community Affairs Director Sean Pritchard attended the public BIC meeting and says that the increases had across-the-board support. “Not one person said, ‘No, let’s not do this,’” he reports. SFAA, as well as builders’ and engineers’ groups, were on board partly because the department has not done a comprehensive overhaul of its fees since 1992. In order to avoid that delay in the future, the BIC also recommended updating the fee tables every three years to accurately reflect changes in costs.

The next step is to send the finalized fee ordinance on to the San Francisco Board of Supervisors and Mayor Gavin Newsom. Their final review and approval is likely to take several months, with the fee adjustments probably taking effect in September.

Newsom Calls for Investigation into DEA Letters to Landlords
San Francisco Mayor Gavin Newsom wrote the U.S. House Judiciary Committee demanding an investigation into what he called “sensational threatening” letters that the Drug Enforcement Agency sent to landlords in December 2007. The letters told property owners in San Francisco that their homes could be taken and they could be imprisoned if they rent to medical marijuana dispensers. Medical marijuana is legal in California, but illegal under federal law.

In his letter to Committee Chairman John Conyers (D-Michigan), Newsom asked for oversight of the DEA’s “ongoing interference with implementation of the law” and went on to say that the city “strongly opposes” that interference. The San Francisco Board of Supervisors already passed a resolution in February condemning the DEA’s actions against property owners.

In a related note, on the federal level, Congressman Barney Frank (D-Massachusetts) recently introduced a bill that would allow states to set their own laws on medical marijuana and would prevent federal prosecutions and penalties surrounding personal use of marijuana for medical purposes in states with medical marijuana laws.

Supervisors Approve Market-Octavia Plan
After nearly eight years in the planning process, the San Francisco Board of Supervisors recently approved the Market-Octavia plan, which will bring thousands of new housing units to the upper Market area. The plan involved a major zoning change that will allow developers to construct 40-story towers on some parcels near Van Ness Avenue and Market Street. The plan also requires developers to sell or rent 25% of the new units at below-market rates and imposes fees that could bring up to $50 million for an affordable housing fund.

Tropical Blast Trade Show September 22
On September 22, 2008, the San Francisco Apartment Association will hold its annual boutique tradeshow—Tropical Blast. The show will cover all facets of the multifamily housing industry. Professionals who provide San Francisco’s rental housing industry with top products and services will be on hand and happy to speak to all attendees.

Free property management classes will kick off the event with subject matter that includes a tenant buy-out class taught by SFAA Board President Dave Wasserman and a passthrough class taught by Kim Boyd-Birmingham and Michelle Horneff-Cohen. Doors will open at 4 p.m. and members will be invited to explore the Hawaiian-themed tables manned by SFAA’s valued associate members. For more information or to register for a booth, please contact SFAA Education and Events Director Vanessa Khaleel at vanessa@sfaa.org.

Second Annual SFAA Trophy Awards November 13
SFAA’s second annual Trophy Awards will be held at the Palace Hotel on November 13, 2008. Categories include: Best Independent Owner, Best Resident Manager, Best Property Management Firm, Building of the Year, Best Green Building and Best Residential Amenities. More information and the nomination form will appear in future issues of this magazine. To get involved with the 2008 Trophy Awards or sponsor the event, contact SFAA Education and Events Director Vanessa Khaleel at vanessa@sfaa.org or 415-255-2288.

Economic Stimulus Package Includes Leasehold Improvements Provision
The Economic Stimulus Act, signed by President George Bush on February 13, 2008, included two tax provisions that will provide benefits to small businesses. The first would permit a business to deduct as much as $250,000 of the cost of otherwise depreciable property. This expensing provision applies to property acquired and placed in service during 2008.

A second provision would provide a “bonus” depreciation deduction for the cost of leasehold improvements and certain other equipment. The bonus will be 50% of the cost of the improvement. The provision is effective for improvements placed in service during 2008. Improvements placed in service during 2009 will be eligible for the bonus deduction, but only if they are made pursuant to a contract entered into during 2008.

NAA Expo June 26-28
The National Apartment Association’s annual Education Conference and Exposition will be held at the Gaylord Palms Resort and Convention Center in Orlando from June 26-28, 2008. General Colin Powell will be the opening speaker; he will speak on take-charge leadership on June 26.

Educational sessions include a broad range of rental housing topics, from going green to the independent owner. Other highlights of the expo include a panel discussion among real-estate-related CEOs about “What Keeps You Up at Night?” on June 27 and the Paragon Awards Ceremony on June 28. Also on June 28, Paul Loredo of CHISPA Housing in Salinas will represent California in the National Maintenance Games. Loredo won the top prize in CAA’s local competition in April.

The conference will be preceded by two days of NAA Committee and Task Group meetings on June 24-25, as well as the NAA-PAC Golf Tournament. The full conference is $825 for members and $675 for exhibitors. One-day registration rates are also available. For more information and to register, check out www.naahq.org.