Dear Landlords and Investors,
The principles of leverage, supply, demand, and ROI still push appreciation. San Diego has proven to be a wise location for your investment dollars. But, don’t become complacent. Don’t lose track of why you are investing, regardless of how successful you are. Dealing with unexpected issues can make or break your business. So of course, you’re right to want to understand how the current market affects your property values. You deserve expert guidance. Here are details on what you need to know now:
Thank You, Thank You, Thank You!
We just verified with our AOA-sponsored attorney at Dennis P. Block. The new allowable rent increase for San Diego County. Drum roll, please…
AB1482 continues to be the Landlord’s gift it was NEVER meant to be. Originally an attempt, by our friends in Sacramento, to help tenants. Hmm… I have never raised rents by that much that I can remember through the years. 9.1% is the new basis for 2021 rent increases in all of San Diego County. Some cities throughout the county may have other restrictions. So be sure to check the zip code of where you own income property.
The way they arrive at 9.1% is by adding the CPI (consumer price index) to the limit imposed by AB1482 of 5% annually. CPI for the county from April to April 2020 to 2021 was 4.1%. So my rents currently at $1,680 a month are going to $1,830 a month. Not bad and all within the framework and guidelines of the states’ approval. Oh, and only a 30-day notice for the rent increase because it is under 10%.
However, not so fast! All of us who own income property in San Diego County are under the SD County law passed back in May. That has a rent cap of 4% coupled with CPI. That law states it will last for 60 days after Gov. Gavin Newsom lifts all COVID-19-related stay-at-home orders. Those orders were lifted last week Tuesday, June 15th. So unless extended our County restrictions end August 14th.
Light at the end of the tunnel
California is finally reopening its economy. After 15 months of the pandemic. California renters are recovering too. Late rental payments have dropped from 20.7% at the height of the pandemic to 11.8% last month. The Federal government has $6.6 billion for rental assistance nationwide. Which experts estimate is more than enough to wipe out all rent debt.
“The money is there, but it’s not getting into the hands of the people who need it quickly enough,” said Tom Bannon. Tom is the chief executive officer of the California Apartment Association. “Because of these difficulties CAA is open to a brief extension of the eviction moratorium. But the state needs to take steps to stop abuses. For more than a year too many tenants, with the means to pay, have withheld their rent. Simply because they could do so without consequences.”
The eviction moratorium deadline of June 30th looms. Lawmakers are holding closed-door meetings with Newsom. They are considering whether to extend it or not. Apartment housing leaders, like Bannon, want to see safeguards against abuse. Including verifiable evidence of a need for eviction protections. These protections would be coupled with the swift distribution of the rental assistance funds. Funds would go to all who show a COVID-related need. At first, the application was difficult to complete. The state has simplified the process. Hopes are more renters can apply and get approved for the funds. Check out 5 landlord Resources for California Property Owners:
The federal rental assistance is largely reserved for low-income tenants. But tenants of all income levels can qualify for eviction prevention. That gap needs to be closed. Funds are set aside. That money should be made available to all tenants. It’s earmarked for those who can’t make rent due to pandemic hardships. All tenants in this position deserve rental assistance. So do their housing providers.
California to pay rental housing Providers 100% of rent owed
Governor Newsom announced that California is receiving $2.6 Billion in rental assistance. This is from the Federal Government. Now add that to the $2.6 billion out of the state’s general fund. It brings the total rent aid to $5.2 Billion here in California.
Newsome’s intention is to use the funds to pay rental housing providers. Making up all accumulated unpaid rent attributed to the pandemic. This is retroactive and moving forward. Finally a plan we can support! This would help landlords break even and give renters relief. Unfortunately, California has been slow to release the funds. Only a little over the 2% of folks in California who applied for rental relief actually received it. The state has only paid out $32 Million. That is out of the $490 Million requested by its residents.
We’ll continue to keep you posted on the progress and eventual outcome. On the eviction moratorium and with the promise. The promise Governor Newsom has made to income property owners in California.
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IT’S TIME FOR YOU TO GET THE ROI YOU DESERVE.
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