feature
A Class Act
by Emily Landes
Most SFAA members know that the annual tradeshow is a perfect time to come together for some good food and great networking opportunities. But far fewer know that the trade show is also an excellent time to take advantage of free educational classes led by some of the best teachers in the industry.
At this year’s tradeshow, Craig Waddle of Vanguard Properties kicked off the day’s educational offerings with a wide-ranging lecture explaining the dos and don’ts of fair housing. Understanding that fair housing can be difficult to understand in the abstract, Waddle kept the audience engaged by creating real-world scenarios that landlords might confront on a regular basis.
For example, he posited, suppose you get a call from a prospective tenant who has recently returned from time abroad with a wife and child who can only speak Spanish. This tenant says that he is looking to live in a predominantly Spanish-speaking neighborhood and, he wonders, is your building located in such a neighborhood? Waddle asked what the landlords in attendance would do when presented with this scenario; most said they would answer the question. “You guys are going to the poorhouse,” Waddle joked. “That’s called steering and its majorly illegal.” He then explained that the correct answer is to say “I don’t know” and direct the tenant to look up Census data or even to check Google for answers.
The same problem often arises when a tenant asks if the building is “secure” or located in a “safe neighborhood.” Waddle clarified that while landlords can make factual disclosures, such as mentioning that the building has “controlled access” or “gated parking,” the owner or leasing agent is never allowed to describe a neighborhood or a building as “safe.” Instead, he should direct the tenant to call the nonemergency police number for crime statistics.
Of course, most prospective tenants who call with these questions aren’t looking to spot a fair housing violation. But, some of them are and that’s why owners have to be prepared and knowledgeable about fair housing. There are over 200 fair housing testers in the San Francisco market alone, Waddle explained, and they are all looking for violations that can add up to huge fines. “It’s all about money at the end of the rainbow,” he said.
Money—specifically the passthrough process—was the center of discussion at the San Francisco Rent Board lecture, which followed Waddle’s during the trade show. Led by Rent Board Supervisor Jennifer Rakowski, the talk briefly went over the most popular passthrough petitions and forms at the Rent Board and then opened up to a Q&A format so that owners could ask specific questions about the passthrough process.
Many owners wanted clarification on the difference between an operating and maintenance passthrough and a capital improvement passthrough. Rakowski explained that replacing a portion of a staircase would be an O&M passthrough, which could then be added to the base rent, while replacing an entire staircase would be a capital improvement passthrough, which would be separate from base rent.
Rakowski acknowledged that the passthrough process could be a confusing one, even though the board has made efforts to make the procedures easier. “As with everything, we try to simplify and some aspects get more complex,” she said in reference to the utility passthrough, which is time consuming to do the first time, but becomes much easier if landlords become regular petitioners.
Rakowski recommended keeping banked increases separate from any passthroughs because combining them can make the process even more complicated. “One of the best things you can do is keep them separate,” she advised. She also said that because the current increase is only 0.1%, many owners are choosing to bank them this year and wait until there is an increase “worth the stamp.” She also let owners know that they can bank the Rent Board fee passthrough, which is $14.50 this year, and added that most owners have found it effective to apply these fees to the security deposit interest owed to each unit.
Many owners were also interested in information about passing through seismic upgrade work. Rakowski said that this would almost certainly qualify as a capital improvement. She added that the city is working on creating a financing program to help pay for these improvements and that it might be willing to “fill in the gap” if a tenant files a hardship petition after receiving an increase for this type of improvement. But, she clarified, “the details have not been worked out.”
After the Rent Board talk, SFAA’s 2009 Leasing Agent of the Year Jackie Tom took over the classroom for an informative lecture on the rental market. Tom told the audience that she missed the days when she could quote rental prices to her clients and “make them happy.” However, she also felt that the worst was over and that, as long as owners accept the down market, they will be able to rent their units quickly.
Personally, she said, she would rather see a unit rented at a slightly lower rate than watch it sit empty for months. “Be realistic,” she cautioned. “You probably won’t get what you got a year and a half ago.”
She also advised owners to think about renting to pet owners, whom she has found to be easy to work with and very appreciative of a pet-friendly apartment. “I’ve had really positive experiences with people with pets,” she explained. She did suggest that owners meet the proposed pet in advance and get a sense of the animal’s energy level and potential separation anxiety issues before giving approval. She does not recommend that owners accept puppies, who tend to run around a lot more than older dogs and often bark when their owners are gone. She also warned against breeds that are known to howl, like beagles, and suggested that owners always ask to meet a dog described as a “mutt,” as it can often end up being a pit bull or rottweiler mix. Not that Tom has any problem with big dogs. She said she’d rent to a St. Bernard owner any day because of the animal’s generally sweet and calm disposition.
Tom was the final presenter of the day’s educational events, after which her students still had time to head back to the tradeshow floor before the expo closed its doors for another year. SFAA Deputy Director Vanessa Khaleel said that the goal of the trade show is to make sure that owners get to experience both the big educational opportunities in the classroom and those smaller lessons learned from meeting associate members at the tradeshow. “Our annual tradeshow is a wonderful opportunity for San Francisco property owners to attend free classes and meet companies that serve our industry,” she relayed. “By attending the annual tradeshow and our educational classes, landlords can collect information that is invaluable.”
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Emily Landes is the editor of SF Apartment Magazine. Copyright © 2010 by Black Point Press. All rights reserved.