American Apartment Owners Association

That Apartment Building Boom Is Slowing—So Rent Is About to Accelerate

39 min 3 sec ago

In a research note out Tuesday, Goldman Sachs economists suggested a February slowdown in housing inflation was likely temporary. In the March consumer price index data released Wednesday, they were proved right.

Goldman’s analysis was concerned with whether the rental industry would be able to weather the ongoing glut of new construction, and they believe it will. That’s good news for landlords, but not so great for renters.

The Labor Department’s CPI tracks housing price inflation several ways. Housing costs for both renters – the category known as “rent of primary residence” – and for owners, a metric called “owner’s equivalent rent” – both accelerated to a 0.3% monthly gain from 0.2% in February.

As Goldman explained it, many analysts have assumed years of robust building of apartments, particularly in expensive cities, would eventually slow increases in the cost of rent. But, the economists wrote, “the pipeline of new projects appears to have peaked. Additionally, a rise in cancellations/project delays (akin to the 2005-2007 experience) may slow the pace of completions going forward. Most importantly, the rental market has been able to absorb this decade-high pace of new supply without a significant increase in vacancy rates.”

The Labor Department also reported Wednesday that average hourly earnings rose 2.7% for the year — continuing a years-long trend of rents rising faster than wages. Many tenants have “absorbed” rising rents because they have no other options, but hefty rent payments crowd out other spending. They also make it difficult to save for down payments.



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Property Survey Always Wise, Often Required

44 min 22 sec ago

Question: At our settlement recently, a lawyer charged us $150 for a survey. When we questioned this charge, we were told it was a lender’s requirement and we could do nothing about it. Just what is a survey?

Answer: I hope the lawyer at least gave you a copy of the survey and fully explained it to you.

It is important to distinguish between a survey and an appraisal — both of which are usually charged to the buyer. An appraisal assists the mortgage lender in assessing the value of the house so as to determine whether a mortgage should be made and in what amount. Generally, the appraisal will analyze the condition of the house, its location, structural soundness and comparable sales in the area.

A survey, on the other hand, goes to the question of the marketability of the house. There are, however, several kinds of surveys: (1) location, (2) boundary, (3) if involving a commercial property, an American Land Title Survey, commonly referred to as an ALTA survey.

The typical survey that the homebuyer gets at the settlement (escrow) is the location survey. Oversimplified, all it does it show where the improvements (the house, fence, shed) are located as they relate to the boundary lines. The survey typically will inspect the area and then submit the survey. Usually, this will cost a few hundred dollars.

It does not, however, show you where the actual boundaries are. To do this, you will need to order the Boundary Survey. Here, the survey will — in addition to showing the location of improvements — determine where the property corners are, and then prepare a more detailed presentation. Often, however, it is very difficult to locate the corners of a piece of property. Years ago, great-grandma Smith told her attorney “the end of my property is where the oak tree stands.” And that’s what her deed — and all successor deeds read. However, the old oak tree was demolished years ago. To be precise, the survey will have to do a lot of research, legwork and measurements. So such a survey will be more expensive.

The location surveyor determines whether the house is within the property borders, whether there are any encroachments on the property by neighbors and the extent to which any easements on the property may affect legal title.

Lenders always insist on obtaining a clear “lender’s” title insurance policy covering the face value of the mortgage. Title companies will issue an exception to title unless a survey has been ordered, and thus surveys are usually required.

My own belief is that everyone buying a house should obtain a survey whether or not the lender requires it. You can at least start with the location type. It is a good idea to learn, for example, whether there are any building restrictions affecting your right to add a porch or a fence. Equally important, does the next door neighbor have any possible claims of adverse possession? If the survey shows an encroachment — one way or the other — on a next door property, a potential buyer must investigate very carefully before taking title.

But, here are some suggestions involving the survey process.

First, location survey prices vary considerably. I’ve seen them as low as $130 and as high as $300, for the same single-family house. Ask your settlement attorney for an estimate. If it seems too high, arrange for your own survey and make sure a copy of the survey gets to your lender well in advance of settlement. It must be done by a qualified, licensed surveyor.

Next, ask your sellers who did their survey. Unfortunately, most lenders will not honor a survey if it is more than six months old. But inquire from the prior surveyor whether the old survey can be updated and whether this will save you some money. Some of the more reputable surveyors are happy to get your business and will give you a break in the price.

Additionally, if you are refinancing your existing home, some lenders and title insurance companies are willing to accept a survey affidavit instead of a new survey. You will have to sign an affidavit that no improvements have been made to the property since you originally purchased it. These affidavits are available at a minimum cost.

You should also go to the local government surveyor in the land records office where your property is located. They are quite helpful and may be able to assist you with boundary questions, easement issues and such.

If you are buying a condominium unit, you will not have to obtain — or pay for — a separate survey of your unit. That survey has already been done as part of the plans which were recorded with the condominium documents. But that does not excuse you from carefully reviewing the condo plats and plans. For example, are there limited common elements that impede your access to the roof? Do you have a limited common element?

Finally, if you are considering installing a fence — or even a swimming pool — in the future, you will want stakes posted, it will cost you additional dollars. You should make the necessary arrangements for stakes at the time you order the survey.

And don’t forget to get a copy of the survey from your settlement attorney.


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The Pros And Cons Of Renting To College Students

Wed, 04/18/2018 - 7:32am

For landlords willing to rent to young tenants, college students offer a reliable pipeline to keep units filled and decrease vacancy rates. While renting to students has its drawbacks, there are advantages, too. Learn about the pros and cons of having college student tenants to decide what’s right for your properties.

Advantages of Renting to College StudentsConvenient

Students are one of the most convenient sources of renters in college towns. By advertising to students, you can generate interest and fill vacant units quickly. Not only will you save time by targeting students, you will keep advertising costs down, as well.


Some landlords believe students are risky renters because they may not have steady income to pay the rent. The good news is, you can often have their parents co-sign the lease. Since parents are saving on room and board over on-campus rates, many will be happy to co-sign — and they may even offer the whole semester’s rent upfront.

Lower Expectations

Most college students aren’t looking for luxury accommodations, they’re searching for safe, cheap housing near campus. If you have older housing stock and don’t want to rehab, college students may be a great target market.

Disadvantages of Renting to College StudentsProperty Damage and Parties

For many landlords, these are the biggest concern. Students may hold parties, which can lead to noise complaints from others. They may damage the property accidentally or simply not understand the consequences of an action, such as not reporting a slow leak in the plumbing.

Ultimately, landlords will experience more property damage and some partying when renting to students. To protect your property, take a large security deposit and go out of the way to explain how and when you’d like to be notified of maintenance issues.

Lack of Experience

Most college students are on their own for the first time. They are learning how to budget, manage money, pay rent on time, and pay utility bills all at once. This crash course in “adulting” can be overwhelming for some students. Plus, the lack of experience can cause them to make mistakes. If you know you’ll perseverate over a late rent payment, you might not want to rent to college students. If you can be flexible and fair, you may have a positive experience renting to students (knowing you’re helping them gain valuable lifelong skills).

Frequent Turnover

Students may rent for one year or less, as many don’t stay in town over summer. Expect higher turnover rates when renting to college students. This drawback is offset by the ready population of students eager to snap up vacancies.

No matter who you decide to rent to, a strong lease and proper tenant screening policy protect your interests. Get access to both — and much more — when you become an American Apartment Owners Association member today.

Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use.

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Who Is Responsible For Mold In A Rental Property?

Wed, 04/18/2018 - 7:26am

It may be microscopic, but mold can be a monumental menace to landlords and tenants alike. The mess is bad enough, but the presence of mold in residences also has been linked to significant health issues, including serious respiratory illnesses. With rental property mold, the concerns extend beyond the tenant to the property owner or manager — and they can grow exponentially. In addition to cleanup costs, there could be lengthy lawsuits, future vacancies and a ruined reputation.

If you are a landlord or property manager, you should know that you are not always legally liable for mold issues, however. And when it comes to preventing mold, or remediation efforts if it’s already an issue, there are tenant responsibilities that accompany your own.

A Look at the Legal Side

It’s not possible to quickly summarize who is legally liable for mold in a rental property, as laws and guidelines vary greatly by location. The U.S. Environmental Protection Agency has no regulations or standards regarding airborne mold contaminants, but some states and cities have addressed mold either directly or under regulations pertaining to indoor air quality, properties being habitable, or as a legal nuisance.

Landlords and property managers should take any legal actions seriously. While most molds are harmless, some people are sensitive to them, and even the Centers for Disease Control and Prevention acknowledges that people with sensitivities can have “intense reactions” to exposure. Here’s an example, albeit extreme, of the potential fallout: A Rhode Island man recently sued a property developer for $60 million, claiming he got an incurable lung disease from unsafe mold in his apartment that he alleges the developer knew about.

In instances when the damage or injury is due solely to the tenant’s negligence, landlords are not liable. However, defending yourself in a lawsuit can be costly. Thus, it’s incumbent on you as a landlord or property manager to check with your state’s EPA, your local government and the health department to learn of any regulations or guidelines that might affect your liability. This includes determining whether there’s a disclosure law that requires you to inform tenants and would-be tenants about the presence (or even suspected presence) of mold.

Who’s Responsible for Mold Prevention?

Mold issues begin with excess moisture. Some potential sources are renter responsibilities. Tenants should:

• Keep their residences well-ventilated to prevent high humidity
• Use exhaust fans
• Vent dryers
• Wipe away any condensation
• Keep their places clean
• Report any suspected mold growth immediately

Encourage tenants to keep those things in mind from the get-go, and you could avoid a problem. Landlords, meanwhile, must tend promptly to these issues, at a bare minimum:

• Leaking roofs
• Leaking windows
• Leaking pipes
• Foundation leaks/seepage

Address these issues as soon as possible. Once materials become water-soaked — whether it’s wood, drywall or furniture — mold growth may begin in less than 48 hours.

Who Must Handle Mold Cleanup?

As with mold prevention, there are instances when tenant responsibilities indicate the tenant should clean rental property mold, and there are times when that falls upon the landlord or property manager. The cause of the mold should be the determining factor. Either way, remediation efforts should be addressed before the mold growth turns into a major problem. If mold growth already is extensive, cleanup should be left to trained professionals to prevent further contamination.

Mold is just one potential issue out of the hundreds you may deal with as a landlord or property manager. Our objective at American Apartment Owners Association is to provide an array of member benefits designed to help you navigate property management issues more efficiently.

Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use.

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5 Things Renters Don’t Want to be Told

Wed, 04/18/2018 - 7:19am
Unwelcome News: What Renters Don’t Want To Be Told

You sometimes have to navigate tricky landscapes when you manage rental properties. We’re not talking about pothole-filled parking lots, which can be paved; nor walkways impeded by bushes, which can be trimmed. It’s landlord-tenant relationships that often require a balancing act, and rarely is the communication as discomforting as when you are delivering news to tenants that you know they will not welcome.

Following are five things tenants or prospective tenants really don’t want to hear from a landlord or property manager. There are also a few tips for making these not-so-special deliveries in a manner that might help in terms of building a relationship with tenants despite the bad news.

1. Your Rent Is Increasing

Few things will raise a tenant’s ire as much as raising his or her rent. Be prepared to provide a reasonable reason for the increase. If you can demonstrate to the tenant that your costs are rising and you aren’t simply grabbing more money purely for profit, there’s a better chance the tenant will understand the increase. Passing along smaller annual increases also could diminish the impact compared with hitting tenants with a sharp, sudden jump.

2. We Can’t Return Your Full Security Deposit

Good tenants who have not damaged any property may assume they are getting their entire security deposit back when their lease expires. When a landlord has to deduct a portion from the total, a tenant understandably can be upset. It’s fair for tenants to question any charges — but even in instances where there’s no obvious damage, perhaps a tenant overlooked some required maintenance, such as having the carpets cleaned before moving out. When notifying a tenant that the entire security deposit won’t be returned, have a copy of the lease handy so you can cite specifics about the tenant’s responsibilities for the amounts you are deducting.

3. The Pool Is Closed for Maintenance

The amenities your property offers — perhaps a pool, a fitness center and/or a common socializing area — are undoubtedly a key part of the value tenants expect to enjoy in return for their monthly rent. These all require occasional maintenance, however. When you have to temporarily restrict availability, provide tenants with plenty of advance notice and an explanation about why the closure is necessary. You can further reduce any disappointment by making alternative arrangements, such as lining up short-term access to a local gym or pool if such options are available.

4. You’re on Your Own With That Neighborly Dispute

A tenant’s frustration can boil over when dealing with a nuisance neighbor. If the neighbor isn’t breaking the law or the lease, however, a landlord or property manager’s role should be minimal. Be as empathetic as possible, but encourage the frustrated tenant to manage the relationship on his or her own — or to call the police if the dispute rises to the level of being threatening.

5. Your Rental Application Wasn’t Accepted

It’s not easy telling someone you’re not going to rent a property to them, and it’s even more difficult for them to hear it. Whatever the reason for the rejection, show empathy and encourage the renter to re-apply in the future. Being considerate could earn you a referral to another qualified applicant. Of greater importance is to be aware of the legalities involved with rejecting a rental application. Know the laws, both federal and state, regarding discrimination and fairness pertaining to rental properties.

As a landlord or property manager, you know delivering news to tenants that isn’t pleasant goes with the territory. Going over the lease closely at the time of signing can prevent some issues from becoming contentious later, but it’s possible that at some point you’ll have to explain something a tenant doesn’t want to hear. Always be cordial, provide as much notice as possible, and provide notifications in writing as well. Simply being available to talk things over in a straightforward manner can also help you develop landlord-tenant relationships that work for both sides.

In addition to tips for building a relationship with tenants, American Apartment Owners Association offers member benefits such as landlord forms, educational webinars and other property management tools. Join today to take full advantage of these tools.

Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use.

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Shifting Attorney’s Fees and Costs in Landlord Tenant Litigation

Mon, 04/16/2018 - 2:00pm

By Nate Bernstein, Esq., Managing Counsel- LA Real Estate Law Group

In any landlord v. tenant litigation scenario, the risk of an award of attorney’s fees and costs against you or your company  (as the landlord or property management company) is a serious financial risk if your opponent prevails on the merits in landlord tenant litigation.  The risk can be present at the level of “law and motion,” the level of “trial practice,” or the level of “appellate practice.”  Landlords and property management companies are generally not “judgment proof.” Their assets are visible on the boulevard and the public title records !!   If the risk is not insurable, landlords and tenants have financial exposure if a tenant prevails in an eviction case or other type of litigation case. If you are a plaintiff in a hotly contested case, you have the burden of proof, and if you lose on the merits before a judge or jury you have exposure for an award of attorney’s fees and costs against you, not to mention a potential lawsuit for “malicious prosecution.”  

What you thought was a $ 7,500.00 problem, can be a $ 25,000.00 exposure problem with a broadly drafted shifting attorney’s fees and costs clause or an ordinance that rewards a prevailing party.   The tendency is for the Courts to award “reasonable” attorney’s fees and costs to prevailing parties and their attorneys.   This policy encourages attorneys to take meritorious cases on behalf of tenants, and to take these cases to the “mat of trial,” and potentially on a reduced rate or contingency arrangement with the plan of prevailing and obtaining an award of attorney’s and costs in a post trial motion.

What is considered a “reasonable attorney’s fees” award is highly subjective, and the judge may have pre conceived notions and assumptions of what to order. Generally an hourly rate range of $ 150.00 per hour to $ 350.00 per hour is considered “reasonable” and within range of reason.    The time to chop down or reduce attorney’s fees is not at the hearing on a “Motion to Award Attorney’s Fees and Costs to Prevailing Party,” – the Court’s approach may be “Why didn’t you write a check for less and settle the case  ?”  

Just do the simple math.   The preparation for a jury trial can be a multiplier of 5 times the number hours of getting ready for a bench trial.  For example if a bench trial entails 5 hours of attorney preparation, a jury trial entails 25 hours of preparation time, and also additional court time to pick a jury, prepare and  and review jury instructions and special verdict forms with the judge.   Also, such costs such as deposition costs, court fees, jury fees, expert witness fees, and process server fees can be shifted to the losing party.

The financial risk of awarding attorney’s fees and costs against you can be present in your own lease agreement contract.  It is a hidden bomb in the basement of your building !! Most lease agreements have a clause that has language that reads something like,

“ ATTORNEY FEES:   In the event any form of legal action is brought in any Court or in an arbitration proceeding by any party to enforce any terms of this agreement or to recover possession of the premises, the prevailing party shall recover from the other party reasonable attorney fees and litigation costs.”

The risk of awarding attorney’s fees and costs against you is also present under local municipal ordinances, state contract law, and state labor laws.  For example, if you charge unlawful rent in a rent control jurisdiction, a court can award back  the excess rent, treble it, and can award attorney’s fees and costs against you. See, for example, Santa Monica Rent Control Charter Amendment Section 1809(a), entitled “CIVIL REMEDIES and 1806(f) (prevailing party in Wrongful Eviction action).”

To soften the financial  risk and blow of an award of attorney’s fees and costs against you in landlord tenant litigation, landlords and property management companies should evaluate THE FOLLOWING FACTORS :

  1.   Assess with your attorney the real exposure to an award of attorney’s fees and costs so you understand the true financial risk.  How long has the case been going on for ?? How much discovery has been done- have depositions been taken  ??  Has the tenant’s attorney prepared for a jury trial ?   How skilled is the tenant’s attorney ??  What have juries done in similar types of cases in LA County (i.e. pervasive bed bug cases where the landlord really did nothing about the issue) ?    Does the tenant have an expert witness  ?   Has the judge denied summary judgment against you ??    Is your eviction case impressively weak or not provable- is the property manager the only percipient witness ??   Will the jury and or judge be sympathetic to the tenant ??
  2.   Can you settle and pay the tenant far less than the bad outcome exposure and assess a “cash for keys” settlement ??
  3.    Is there a non-waivable municipal law, rent control ordinance, or state law that shifts attorney’s fees and costs to the prevailing party in this area of law, regardless of the language in your rental agreement- if so, try to settle the case based on that statutory exposure  ??
  4.    Can you insure certain risks with liability insurance ??  Insurance is an extremely valuable asset protection device, especially in breach of habitability cases.  Let the insurance carrier pay for the defense and indemnification to avoid the rainy day.
  5.  Is the tenant being represented by a reputable public interest law firm – will a judge or jury have a bias toward that type of law firm that is helping  the underdog tenant  ??

Take  ACTION to try to include some language in your rental agreement that may help you:

  1. Avoid using altogether  an attorneys fees/ costs shifting clause in your rental agreement for certain types of litigation risks.   Have a clause in plain English that says that “for any type of litigation between the parties, each party is to bear their own attorney’s fees and costs.”  This may take the sweet juice out of the tenant’s attorney pay day if the tenant is the prevailing party, and the attorney’s fees/ costs component of the claim is not addressed under a rent control ordinance or other state law.   If you prevail in an eviction lawsuit, you give up the right to collect attorney’s fees and costs, but the tenant may be “uncollectible” anyway or may file bankruptcy- so not having a prevailing party attorney’s fees clause may help you in the long run if you lose a case.
  2. Require that the tenant purchase renter’s insurance to insure certain kinds of risks.   This may encourage the tenant to target the insurance, rather than you as the “deep pocket.”
  3. Have a clause that requires mandatory mediation for any type of case that is not an eviction case.    If the tenant does not complete mediation in good faith prior to going to court, they waive any and all rights to get attorney’s fees and costs if they are the prevailing party.  This clause works in real estate purchase agreements involving consumers, and it may be enforceable against tenants.  Actively attend mediation or a court supervised settlement conference with the tenant to try to settle the issue.
  4. Use a mandatory alternative dispute resolution provision for arbitration of certain types of disputes.  Arbitration of the case takes the case away from a jury, and judges like this type of case because it takes the case off the trial calendar altogether.   Even if this type of clause is held to be “unenforceable” and against public policy – so what – it may distract from the litigation and encourage settlement.
  5. Set numerical limits for attorney’s fees and costs for prevailing parties for certain kinds of cases.   You can think out of the box, but for a jury trial, you can set a cap limit of $ 7,500.00 for attorney’s fees and costs for the prevailing party.    This type of clause protects both landlord and tenant from a big rainy day and a large attorney fee award against you.


The author, Nate Bernstein, Esq., is the Managing Counsel of the LA Real Estate Law Group, a Los Angeles based real estate and business law firm.  The contact phone number is (818) 383-5759 and website is   The email contact is   The firm serves clients throughout Southern California. Nate Bernstein is a 25 year veteran Los Angeles real estate and business attorney, transaction and trial lawyer.   Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, and creditor’s rights.    He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company, a large privately held company. Nate Bernstein created, a leading educational resource on quiet title real estate litigation.  Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, bankruptcy law.    Nate has personally litigated more than 40 real estate trials, and has settled more than 200 complex real estate and business cases. 



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Is Your Online Reputation Costing You Student Renters?

Mon, 04/16/2018 - 8:28am

It’s no secret that reviews can heavily influence an individual’s final decision in choosing whether or not to purchase a product, go to a certain restaurant, or more importantly – choose where to live. With the help of the internet, other users’ reviews are much more readily available. There aren’t just word-of-mouth complaints and raves anymore – there are entire sites dedicated to creating a collection of reviews that ultimately help shape a product or location’s online reputation.

These reviews can go unnoticed by you, but for potential student renters – they may just be the deciding factor in whether or not to apply for a lease. Your online reputation can either put you at the top of student renters’ wish lists of housing to apply for – or put you at the bottom to be left forgotten in favor of housing with better online reputations.

If you’re advertising to student renters’ or looking to increase your pool of renters, consider if you’re online reputation is costing you student renters.

Look at what you are working with 

If you’re just getting started with utilizing your online reputation to attract student renters, you may want to consider looking at what your online reputation looks like when you’re first starting out. Search for reviews of your property by your target audience of student renters. This search may be startling if you end up seeing negative review after review full of negativity that you were previously unaware of from past tenants.

Don’t let negative reviews discourage you. Instead, use them as a tool to figure out what attracts students renters and what turns them off. It’s important to take in the feedback presented to you to see what didn’t work with student workers in the past and figure out what you can do in the future to prevent the same feedback and keep your property’s student renters satisfied.

Even if you think your online reputation is relatively positive when you are starting off, you still want to take any negative feedback into consideration. You may think the the other positive reviews will make up for the few negative reviews – but for potential student renters, those negative reviews are going to be the ones that make them second guess the positive ones.

Ask applicants or new tenants how they heard about you 

When meeting applicants or guiding new tenants through the leasing process, make an effort to ask where they heard about your property. By hearing how applicants and new tenants were made aware about housing opportunities for your property, you will get a sense of what advertising worked and possibly, how your online reputation has worked in or against your favor.

Many students look to social media sites like Facebook to ask other students what housing they have had throughout their college years. Students may or may not have included your property in a list of recommendations – but any mention is enough to put your property on a potential tenant’s radar.

Asking new applicants or tenants will allow you to get a better understanding of your online reputation and how it directly affects student renters. This gives you a much more clear understanding as it will give you an actual student renters’ perspective on your current online reputation.

Increase your own online presence

Take advantage of the internet and the opportunity to even have an online reputation by increasing your property’s online presence. College students lead busy lives. It is highly unlikely that they are going to spend a whole day or two driving to different properties to survey the property and go to the leasing office. They may just start their search online from the comfort of their own home or on campus when they find free time between classes.

Increase your chances of being found in a quick search or even when a potential student renter isn’t necessarily looking. Manage a social media account (or multiple) to update your social media presence and make room for a positive impact on your online reputation. Choosing to open a social media account on a platform like Facebook will allow you to post updates or announcements as often as you would like, advertise your property, and also allow a platform for potential student renters to connect with you with a quick message or comment.

Your social media account can also include testimonials or reviews from past and current student renters to help solidify your online reputation.

Regardless of how much you have paid attention to your online reputation in the past – it is never too late to review your online reputation and consider how it affects your property’s ability to attract student renters. Instead of fearing how your online reputation can turn student renters away from your property, use your online reputation to your advantage to attract future student renters.



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Don’t Flop Before You Flip: How To Navigate 
Through Scams And Create Financial Freedom

Mon, 04/16/2018 - 8:26am

P.T. Barnum once said, “A sucker is born every minute.” But, with the birth of reality TV, it can be argued a sucker is born every episode.  By using their “celebrity status,” reality TV personalities prey on fans trying to replicate the results they see on popular TV shows like Flip or Flop and Flip This House.  Real estate investing has become an industry rife for scams.

“The fact is that several networks have made the idea of easily making money and becoming financially free wildly popular,” says Ryan Kuhlman, creator of The Flip Coach.  “These shows have mislead viewers to make it look so easy, and they are unrealistic in the profits they portray.”

The reality is that the average flip generates about $25,000 to $45,000 in profit, but many stars of these popular TV shows promise much more.  They have made millions by promising to share their secrets, but the fact is that most of their millions come from their $30,000-plus “mentoring programs,” versus real-estate investments.  We trust these TV stars because we invite them into our homes every week and feel like we know them.  Websites exist that are dedicated to reviewing these programs and calling out these scams, but what are some things you can look out for from the get-go if you truly want to learn abut real estate investing?

1) Remember the adage, “If it is too good to be true, it probably is.”  Why would a millionaire real estate investor want to give you all of his secrets for free?  He wouldn’t, and that’s because everything has a price.  These gurus advertise their mentoring programs and get rich with “no money, no credit” gimmicks all over the Internet and radio. They tempt fans to sign up for “FREE” seminars that will allegedly equip you with all the valuable information needed to be successful in this business.  That’s when you’ll find red flag number 2…

2) The upsell.  The free seminar is only an opportunity for them to sell you on their boot camp, where they entice you with just enough information to sell you their boot camp. 

3) More upsell. The two-to-three day boot camp is a way for reality TV celebrities to offer tidbits of information before going in with the hard sell, offering you their $30k-to-$60k real-estate mentoring courses that promise to finally give you their secret. But here’s the real secret: there are no secrets. Sadly, the chance of you ever hearing from these so-called mentors again is nearly zero.

4) No real local or specialized market knowledge.  How can investing in property be the same in Kansas as it is in Los Angeles?  It absolutely isn’t.  You either have to have local market expertise, or learn how to find someone who does.  If a program tells you that their program works in any market, it is probably a scam.

5) I repeat, if it sounds too good to be true, it probably is! Reality stars who promise easy profits from their overpriced mentoring programs are little more than scam artists. While there is money to be made in real estate investing, it takes diligence, experience, teamwork and hard work. 

There are many sites dedicated to reviewing these programs, so anyone interested can do their homework before investing such a large sum of money in a mentoring program.  There are also other options such as Kuhlman’s Flip Coach program ( that provide a blueprint of how to start your own real-estate investment business, while respecting the need for local market knowledge, hard work and dedication.  He is also the only one in the industry to provide live online coaching.  Unlike other real estate investment programs, The Flip Coach is a standalone program that does not require any additional upsold products to be effective.   

“The fact is that you can be successful in real estate investing, but you have to be willing to put in the work and learn your market,” says Kuhlman, who is also the owner of Broward and Miami-Dade’s Real Estate Investors Associations and the youngest board member of the National Real Estate Investors Association.

Don’t allow the celebrity of reality TV lure you into investing $30,000 into celebrities rather than into real estate.  According to Google, Than Merrill is worth over $100 million, Armando Montelongo brags that he makes more than $50 million per year, and Cody Sperber owns more than $1 million in cars alone and is worth an estimated $200 million. Sperber’s website states he has closed 1,000 deals in seven years, and averages 7 to15 deals per month. If you do the math, it just doesn’t add up.

However, the real question remains: how much do these so-called celebrities earn from selling you their secret systems, and how much of their fortune is from actually flipping houses? More importantly, once they sell you their mentoring program, what is their incentive to make you successful? Once these reality stars have their team sell you their mentoring program, they leave town. You’d be lucky to have more than a few conversations over the phone or email, and you are out a very significant investment.



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Two Smart Moves For Property Managers To Up Their Communication Game

Mon, 04/16/2018 - 8:22am

Communication sounds so easy in theory. So how come it’s so tricky to get right? Just how frequently you “tickle” or get in touch with the onsite managers at your properties — and how you do it — can make or break a multifamily management company. As the head of one of Houston’s busiest, I’ve taken this knowledge to heart.

It’s simple enough to understand: Companies perform better when they acknowledge the role that clear communication plays in their day-to-day workflow and subsequently prioritize tasks accordingly, and communication is essential to an organization’s success, financial or otherwise. And in a market as active and wild as Houston, clear communication is a must. Below are a few ways to improve both your company’s and your own performance, improving your investor’s return on investment as well as your own reputation and experience as a property manager.


Property management software helps automate the communication process. Why not use it? Today there are many software options, and most can easily throw all of that complicated communication between managers, maintenance crews and tenants into a one-stop hub. An endless stream of spreadsheets, emails and phone calls creates confusion, but automation will see that your work orders are scheduled and tracked while notifications keep everyone tuned in and up to date.

There are plenty of vendors who haven’t digitized their invoice and notification process and it costs them in time and organization. The benefits of using technology for electronic data interchange (EDI) automation are not to be ignored. Property management software integrates the whole payable process so that all records and invoices are stored and accessible online for complete, real-time transparency. 

Streamlining communication is all about organization. Good property management software lets managers schedule and complete work orders over the internet, as well as easily send and receive notifications upon status changes and even alert the tenant upon completion.

Maintenance modules can reduce on-site inspection time with technology that allows staff to use a cell phone to identify an issue and assign a work order. It can even help prioritize a to-do list, create timelines and expectations, and assist in scheduling. All of this creates greater efficiency, better documentation and shorter response times ensuring customer satisfaction.

The benefits of effective communication may be difficult to measure with dollars but is infinitely important to an organization’s culture, health and long-term performance.

Transparent Talk

Maintaining an environment where people can rely on what each other says is important. This can easily be achieved through a transparent, open-door policy and making sure employees at all levels know what that means for them.

Transparency is essential to letting people know you mean what you say. Honesty, integrity and clear communications are important parts of this. Make what you say and what you do match up, regardless of if you’re encouraging your team before a big day or you’re speaking one-on-one with a new employee.

Getting your team together in person helps encourage a cooperative attitude, especially before busy times always making sure that you save or make time for those one-on-one chats.

You’ll find that expectations are met and rules followed when both are written down as well as verbally communicated to team members face-to-face. Being direct and thorough with how you communicate is crucial to making expectations clear. You might choose to regularly publish updates or blast out announcements to make sure everyone’s on the same page. In the age of instant gratification, effective communication will become more and more integral to the success of today’s property managers.



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Prices Keep Rising for Apartment Properties, Forcing Investors into Smaller Markets

Mon, 04/16/2018 - 8:18am

Investors keep looking for apartment buildings to buy at good prices. The search is leading them to smaller properties in smaller markets.

“Things continue to be very good in multifamily,” says John Sebree, national director of the national multi housing group with brokerage firm Marcus & Millichap.

The amount of money multifamily investors are spending has stabilized at a high level. Investors continue to accept relatively low yields on their acquisitions, even though interest rates rose substantially in 2017 and are expected to rise further. Part of the reason is that apartment rents continue to rise across the country, attracting investors to bid for new properties.

Last year, the volume of investment sales in the sector started slow and finished strong, so that the full-year was roughly equal to that achieved in 2016, with $152.7 billion in transactions, according to Real Capital Analytics (RCA), a New York City-based research firm. That was down just 4.0 percent from $159.1 billion the year before “We had about an equal volume of transactions in 2017 and 2016,” says Lee Everett, senior managing consultant for research firm CoStar.

So far, 2018 seems to be continuing at the same level. January was a busy month for the multifamily sector, with $9.9 billion in sales. February was slower, with $8.1 billion. Together they add up to roughly the same total as last year. “Volume is about the same as it was at this early point in 2017,” according to RCA.

The total dollar amount is high compared to the historic average, though it is lower than the volume achieved during the peak of the cycle in 2015. “The velocity of investment is still above 2014—and no one was complaining about low velocity of sales in 2014. We are still at a high level of velocity,” says Sebree.

Prices are high and rising for apartment properties, according to RCA’s Commercial Property Price Index (CPPI). The index rose 7.3 percent for properties in the six major metropolitan areas over the 12 months that ended in February. The index rose even more sharply—12.4 percent—in non-major metropolitan areas over the same period.

These high prices are keeping the yields produced by apartment properties very low, despite rising rents. The interest rates that investors have to pay on long-term loans have also risen, and are expected to rise more. Eventually, this should have an effect on the yields investors are willing to accept. But cap rates on deals for apartment properties remain at historic lows, averaging well under 6.0 percent, according to RCA.

“There is scant evidence of an uptick in apartment cap rates yet,” according to RCA.

Long-term interest rates are expected to rise in 2018 as raises to short-term rates by the Federal Reserve ripple through the economy, eventually pushing long-term rates higher and supporting higher cap rates. “The only variable we are monitoring right now is the 10-year Treasury. Over the next couple of years, it is going to drift up,” says Sebree.

In the meanwhile, investors are hunting for higher yields and properties that are likely to appreciate in value. The search is pushing them to smaller assets, often located in smaller markets. As a result, CoStar’s “equal-weighted” index of prices for apartment properties has risen more quickly than CoStar’s “value-weighted” index over the last two years.

“Fewer trophy assets are now trading,” says  Everett. “More investors are moving to workforce housing.”

Investors also remain enthusiastic about the apartment sector overall. The fundamental demand for rental housing continues to be strong, says Sebree. “I see absolutely nothing that changes that,” he notes. “Most owners see a pretty good runway ahead of them.”

Construction delays have also helped protect the apartment sector from overbuilding. Mid-rise apartment buildings are now taking an extra six months, on average, to complete. That’s twice as long as the average delays experienced at the same time last year.

Some of the uncertainties that hung over the sector last year have resolved. For example, the tax reform that passed recently could have removed many provisions that multifamily investors depend on. But the final version of the reform that became law turned out to be very favorable to the apartment sector.


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A Healthy, Happy Haven: Tips on Creating a Relaxing and Nourishing Environment for Renters

Sat, 04/14/2018 - 1:27pm

There are many factors that affect our health. How much exercise we get, how well we eat, and family history clearly have a lot to do with it. People often overlook the extent to which home environment has on one’s physical well-being because it’s easy to overlook things that we see and take for granted every day. As a landlord, it is your responsibility ensure that your renters are happy with the place they call home.

A recent study found a direct correlation between health and one’s home environment. Healthful surroundings are especially important in apartments and condominiums, smaller spaces where there may be fewer options for creating a truly safe and comfortable haven. Fortunately, there are a number of relatively easy modifications you can make to create the healthful and soothing space your renters need and deserve.

Wood is good

Carpeting is a source of many allergens and toxic substances that can threaten the health of your renters. Think about replacing it with hardwood flooring or tile, thus removing the presence of allergens, pet dander and other substances that have built up over the years and pose a threat to long-term health. Industrial carpeting often contains VOCs, toxins that can threaten your breathing air. Wood and tile are far easier to clean, requiring little more than a mop, and will be a big attraction for renters with pets, small children, and busy schedules.

Renew the outside

Unless your rental space is brand new, chances are it will look lived in. However, there is a difference between homey and run-down. Add curb appeal and make it a place renters look forward to going home to by spending some time on landscaping. It doesn’t have to be anything drastic, but a little bit of time spent pulling weeds, mowing grass, and adding pops of color via flowers are a great start. Go ahead and replace any torn window screens and give the exterior and pathways a good powerwash. If you have a balcony or outdoor patio area, breathe fresh life into them with potted plants — just don’t forget to water them.

Sick paint

Many paints contain toxins, which have been identified as the cause of neurological problems in children. There are many natural, non-lethal paints on the market these days, made from milk, berries, and various plant-based dyes, that make excellent alternatives and preserve a healthful living environment. Remember that any lead-based paint, which the EPA years ago identified as a health risk, should always be replaced. Most homeowners spend between $211 and $6,298 nationally to address home safety concerns related to lead and asbestos removal and improved air quality. Be sure to use quality tools, like a durable hammer or drill, if you’re planning to make home modifications yourself, or replace an old paint job that’s showing its wear. When repainting, stick to neutral colors such as white and tan, but if you allow it, encourage renters to paint walls with a color palette that suits their style.


Pleasant smells can contribute to a positive mental state and sense of well-being. Add some scented candles, an infusing device, an oil burner, or vaporizer to create a nurturing and soothing environment for your renters. If there is a bedroom or bathroom that tends to retain unpleasant smells, consider taking an aromatherapy approach. Or try setting out a couple bowls of coffee beans, which are effective at absorbing bad smells and infusing indoor air with a pleasant, natural smell.

Try reassessing your rental space as a source of relaxation and stress reduction. Focus on activities, smells and sounds that are soothing and make modifications accordingly. Remember, if you need to remove or replace anything toxic, such as lead paint or carpeting, consider hiring a professional. With a few simple changes, you can turn a rental space into a home.


Courtesy of



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Former Student Dormitory to be sold at Lender-ordered Auction

Sat, 04/14/2018 - 1:03pm

FOR IMMEDIATE RELEASE                                               Contact: Allison Guyton

April 9, 2018                                                                              (507) 285-1444

Ullin, Illinois, April 9, 2018 – The former Saints Place Student Dormitory  will be auctioned by Maas Companies at 8954 Shawnee College Road in Ullin, Illinois on Thursday, May 10 at 10 AM.  Maas Companies specializes in the liquidation of specialized assets for banks and lenders nationwide.

The auction will include the 28,456 square foot single-story building on 10.3± acres access off Shawnee College Road and next to Shawnee Community College.  The building has state-of-the art geo thermal heating, 52 -400 sq ft individual rooms with private baths and showers.  The auction will include the remaining furniture selling with the real estate.

“The property offers a unique opportunity to the community,” Tyler Maas, Maas Companies said. “The space was built for $2.8 Million in 2008 and was only used for two semesters.  The property is bank owned and now ready for a new owner.”

Potential buyers are encouraged to view the property during the following days (other times by appointment):

  • Monday, April 16                                            9 a.m. –   3 p.m.
  • Wednesday, May 9                                         9 a.m. –   3 p.m.
  • Thursday, May 10                                           8 a.m. –   10 a.m.

Details of the sale are available at the auction website,

or by contacting the auction company directly at (507) 285-1444.

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How To Succeed As A Property Manager

Fri, 04/13/2018 - 8:23am

It’s true, whether we’re talking about the technology industry, the medical industry or the real estate industry, what Steve Jobs is believed to have once said: “If you really look closely, most overnight successes took a long time.”

Achieving success in property management often takes time — years of experience tempered by discipline, attention to detail and an unwavering commitment to withstanding responsibility and pressure.

Knowing how to juggle the manifold duties of property management is one of the great secrets to success. Understanding the value of communication and how best to liaise with both colleagues and clients is another skill that every property manager must master. And staying enthusiastic and knowing how to stimulate interest in your clients are absolute musts for sealing the deal.

Knowing the secrets to success of the best property managers is not enough; you need to actually possess these skills.

Building The Right Skillset

Constructing any skill set is not enough. The skills you refine and sharpen must be tailored to the profession.

As a property manager, you are exposed to a daily onslaught of real estate tasks. You need to deal with colleagues, tenants, owners, maintenance personnel, prospective clients — the list goes on.

Balance your time wisely to yield the best results. Without effective time management, you become consumed by a never-ending blizzard of stress, hampering your ability to meet the demands of each task. Your day becomes compromised and confused. Staying on top of your daily duties means having the knowledge to know what’s going on:

• Knowing when maintenance contractors are set to arrive.

• Knowing the intricate and unique details about each property.

• Knowing how to sell a property in line with its real and lasting benefits.

In other words, staying on top means staying ahead.

You must not only be prepared for what you need to get done but also to take on emergencies as and when they arrive. And emergencies are surely going to arrive. By their very nature, they are unanticipated challenges and property managers know how frequent they can become.

Dealing with multiple properties only magnifies these risks. The property manager is a vital cog in the entire management process. Failing to meet a target has a negative effect on your colleagues and, by extension, the clients they must deal with. Every member of the team, not just the property manager, needs to build trust and become dependable.

Trust comes with time, an interpersonal factor that evolves in tandem with your performance. Colleagues and clients may not remember the 98 times out of 100 that you were reliable. Instead, it’s the other 2% of times that dominates their impression. Those two mistakes may be the results of an unavoidable accident, but they are still unlikely to forget. Building a reputation of excellence is key to building a culture of trust among those you work with.

In Conclusion

Ultimately, it’s these skills — communication, reliability, the persistent knowledge of what’s going on and how to act upon it — that lead to ever greater client satisfaction. Your professional output is the currency of their satisfaction.

Through that satisfaction, your business can blossom even further. More growth translates into greater success. To become a successful property manager, you need to place the client at the heart of every professional action. While this may sound like a  cliche, it has become so for a reason: because it works.



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Fair Housing is 50, but has its promise been realized?

Fri, 04/13/2018 - 8:21am

The landlord said she was “a stupid brown woman” who was exaggerating the need for repairs at her apartment, according to a discrimination complaint the Allison Park resident filed.

“You Indians are all the same,” the man said. “Do I hate Indians? No, I hate dealing with them.”

The still-pending complaint, filed earlier this year with the federal government, was made possible by the Fair Housing Act, a landmark law that celebrates its 50th anniversary this week. The legislation was the result of bitter battles following decades when housing discrimination was government policy.

The bill — a measure that civil rights advocates had long sought — finally passed in the aftermath of Martin Luther King Jr.’s murder and the subsequent violent protests that shook numerous American cities in the days after April 4, 1968.

“This tragedy has caused all good men to look deeply into their hearts. When the Nation so urgently needs the healing balm of unity, a brutal wound on our conscience forces upon us all this question: What more can I do to achieve brotherhood and equality among all Americans?” President Lyndon Johnson wrote in an April 5 letter to the speaker of the U.S. House of Representatives.

“There are many actions the Congress can take, on its part. The most immediate is to enact legislation so long delayed and so close to fulfillment. We should pass the Fair Housing law when the Congress convenes next week,” the president urged.

The law, which had been stalled in Congress for years, passed and was signed into law in a matter of days. Technically called the Civil Rights Act of 1968, it banned discrimination in the sale, rental or financing of housing based on race and several other factors.

“LBJ to Sign Open Housing Measure Soon,” read one headline in the April 11, 1968, edition of the Pittsburgh Post-Gazette, one column away from “Curfew Lifted As City Riots Come to End.”

Pittsburgh, like many other cities, had deeply segregated neighborhoods that confined Black residents to the worst-quality housing.

A 1962 study of “urban renewal” programs in Pittsburgh and Allegheny County pointed out the existing segregation in the city and county, as well as noting that Black families mostly lived in areas with older, dilapidated housing.

“An urban renewal program for Allegheny County must face up to the special problems of its 37,973 non-white families, which as a group, are heavily concentrated in areas at present or potentially scheduled for clearance and redevelopment,” the report stated.

“The non-white population in the County, of which more than 98% is Negro, is disadvantaged both economically, and specifically in its housing. These two conditions are interrelated,” the report noted.

Black Pittsburghers, the report noted, “have been largely left behind in the advancing prosperity of the post-World War II period.”

Prior to the Fair Housing Act, housing segregation in Northern cities was maintained in a number of ways, such as segregated public housing, restrictive zoning laws and restrictions written into deeds that prohibited Blacks from owning or occupying certain properties, said Gerald Dickinson, an assistant professor at the University of Pittsburgh Law School.

“Redlining” by banks and lenders also kept Black residents mostly confined to certain neighborhoods — making it almost impossible for them to get a mortgage, purchase a home and build wealth in the same way white families could.

“[The] real estate industry and the lending industry actually played a significant role in perpetuating segregation by not providing loans to African-American families,” said Mr. Dickinson.

By the 1950s, urban renewal programs, such as the demolition of part of Pittsburgh’s Hill District, had also begun to displace some Black residents, which put further strain on already overcrowded housing in Black neighborhoods.

Pittsburgh had passed its own local fair housing bill in 1959, though it had limited impact prior to the federal law, said Morton “Moe” Coleman, director emeritus of the Institute of Politics at the University of Pittsburgh and professor emeritus at Pitt’s School of Social Work.

“The real estate system was antagonistic to the idea” of fair housing, recalled Mr. Coleman, who worked for Pittsburgh Mayor Joseph Barr in implementing a number of the era’s federal anti-poverty initiatives.

“There was a huge amount of pushback,” he said.

Mr. Coleman testified in favor of the fair housing law in a 1963 case that tested the legislation before Allegheny County Common Pleas Court. The case came about when Oswald Nickens, an obstetrician who was African-American, wanted to buy a home in Stanton Heights. The Stanton Land Company refused to sell him the land on which to build a home, explicitly citing his race as the reason. The court sided with Dr. Nickens and said the fair-housing law should be upheld.

Today, complaints like those of the Allison Park woman who said she was subject to racist statements from her landlord, are investigated and, in some cases, landlords can face fines.

While not dismissing the gains in fair housing made since 1968, those who enforce the law today say there is still much progress to be made.

“If I look at 1968 and I look at today, there’s a lot that’s been successful,” said Jay Dworin, executive director of the Fair Housing Partnership, a private nonprofit that contracts with the federal government to enforce the act.

“Most people know that they can’t overtly say, ‘Hey, you’re Black, get out of my neighborhood.’ But what we do have is an abundance of discrimination with a smile and a handshake. … ‘Oh, I’m sorry; I just rented it.’ … The effect is the same.” — (AP)

“Has [the law] ended discrimination? It has not,” said Carlos Torres, executive director of the Pittsburgh Commission on Human Relations.

The majority of fair-housing complaints in Pittsburgh today concern discrimination based on disability, said Mr. Torres, head of the agency that investigates complaints of alleged discrimination in employment, housing, and public accommodations within the city of Pittsburgh.

Another common housing complaint is based on family status, such as a landlord not allowing a family to rent a unit because they have children.

“That’s against the law,” Mr. Torres said.

He said the commission’s Affirmatively Furthering Fair Housing Task Force will be seeking community feedback on 16 draft proposals and aim to present final recommendations to the mayor and city council next year.

Some of the recommendations include the following: passage of inclusionary zoning; a legal defense fund for low-income Pittsburghers facing eviction; non-discriminatory tenant-screening practices; maximizing the use of the Section 8 homeownership program; and fair-housing training for landlords and tenants.

“These [recommendations] could address long time gaps in terms of the city’s obligation to affirmatively further fair housing,” said Helen Gerhardt, who chairs the task force.

Enforcement of the Fair Housing Act has been its weakness, Mr. Dickinson said.

“A lot of this is piecemeal, over the years, in terms of changing the trajectory of discrimination and segregation in the country. There has been progress with regard to integration and desegregation. We still have aways to go,” he said.

Some fair-housing advocates are disheartened by what they see as less of a commitment from federal officials to further fair housing. Several point to cases that HUD has pulled back from under the current administration, such as a high-profile case in Houston.

The law is the “single most effective tool that we have in combating racial and other invidious housing discrimination and segregation in our communities, around the nation,” said Kevin Quisenberry, a Pittsburgh attorney who has handled fair-housing cases. However, it is only as effective as the efforts of those who work to enforce it, said Mr. Quisenberry, who works at the Community Justice Project, part of the Pennsylvania Legal Aid Network.

“It is difficult and frustrating as a fair-housing advocate to celebrate the 50th anniversary of what is landmark legislation, while fearing that people are attacking that same legislation today,” Mr. Dworin said.

The city of Pittsburgh also remains segregated in many respects.

A 2015 study by Pittsburgh Community Reinvestment Group noted in 2013 that half of all residential mortgage loan dollars in the city of Pittsburgh went to just seven neighborhoods: Squirrel Hill South, Squirrel Hill North, Shadyside, Point Breeze, South Side Flats, Highland Park, and Brookline.

“Concentrations of poverty, people of color, and vacancy persist in historically redlined areas,” two University of Pittsburgh researchers found in a 2016 paper that examined how 1937 government-drawn maps that restricted black Americans from mortgages compared to current geography.

The examination noted in 1937 that most of the city’s black population lived in one of three neighborhoods: the Hill District, East Liberty or Homewood.

“Despite the city’s current rhetoric of renewal, Pittsburgh is still constructed around a geography very similar to its past: Poor and black communities are concentrated in areas that suffered from divestment, whereas the affluent class and homeowners live in areas supported by a historic advantage,” researchers Devin Q. Rutan and Michael R. Glass wrote.

Housing activist Carl Redwood, speaking at a city planning meeting last month about plans for the site of the former Penn Plaza apartments in East Liberty, said black residents still are being displaced from their homes — a decades-long problem.

“We’re just giving them this promise that ‘At the end of the day, we hope that they all can come back,’ ” he said of the former Penn Plaza residents.

“Well, that end of the day didn’t come for the people in the Hill; it didn’t come for the people in St. Clair; it didn’t come for the people in Arlington; it didn’t come for the people in the high-rises in East Liberty; it just never comes. That day never comes,” he said, referring to now-shuttered subsidized housing.

“Where you live will determine more about your life than anything else,” such as what school you go to, the level of crime and violence you are subject to and job opportunities, Mr. Dworin said.

“Where you live is going to make that determination,” he said. “And if the color of your skin is going to be the barrier to that, then we are not as far from ’68 as we thought we were.”



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Feds take aim at sexual harassment involving landlords and tenants

Fri, 04/13/2018 - 8:15am

Federal law enforcement officials are looking to bring awareness to a common form of sexual harassment that doesn’t get as much attention as workplace impropriety.

The U.S. Attorney’s office is spreading the word that reports of harassment in relation to rental housing can be make anonymously, directly to the U.S. Justice Department.

“Usually, what we’ve been seeing is discussion about sexual harassment in employment or the workplace, but what is not being discussed is sexual harassment in housing,” U.S. Attorney Matthew Schneider said.

“This is a real, nationwide problem where you’ll have somebody that might be landlord or maintenance worker… These people will say things like ‘I’ll let you stay here’ or ‘I’ll make those repairs if you do this.’ We wanted to have a dialogue about that with people in the community … to let them know that is a lawsuit under federal law.”

The Justice Department announced the initiative to combat sexual harassment in housing in October 2017 and Schneider led a roundtable discussion this week on the impacts of sexual harassment toward tenants and ways to combat it.

“What we usually find is this is a pattern of activity. If you don’t want to be kicked out of your apartment, you can still report it to the Justice Department. We can keep that anonymous, and we will do an investigation,” Schneider said.

The department is kicking off an informational campaign by distributing flyers with a phone number, letting victims know they have options, and can come forward.

“Trying to get victims to come forward is not easy,” Schneider said. “We’re trying to let people know we want to be there for you.

“… These people are victims of crime, so they might not want to report it, especially if their landlord says ‘I need you to do a sexual favor for me.’ These people have the keys to their houses, the keys to their apartments, and they could get kicked out.

Victims of sexual harassment can call the Justice Department’s Civil Rights Division at 844-380-6378 or email They can also call the local civil rights hotline at 313-226-9151 or

The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits housing discrimination on the basis of race, color, religion, sex, familial status, national origin and disability.



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Which Features Boost Home Sale Prices?

Fri, 04/13/2018 - 8:13am

Selling a home can sometimes be as much art as science, but there are some things that work consistently well. Zillow recently analyzed the features that best help move homes and land higher sale prices, discovering along the way that using the keyword “steam shower” can help boost sale price by as much as 29 percent. It’s the little things…

For their 2018 Home Features That Sell analysis, Zillow examined listing descriptions for nearly four million homes nationwide that sold between January 2016 and December 2017. The goal was to discover what features—or even just descriptions of features—had the biggest impact on the final sale price of the home.

Steam showers were the premium feature that earned the biggest price bump for homes during the examined period, but they certainly weren’t the only one. “Professional appliance” came in second, also earning a 29 percent average price increase. In third place, “pizza oven” resulted in a 25 percent increase. For homes priced in the top third of the market, a “sub-zero fridge” can earn a seller an extra 38 percent premium.

The effect of these extra amenities also varies depending on the price range of the home being sold. A steam shower might be top-tier for pricier homes, but among homes priced in the lower third of all listings, “solar panel” was the top earner, generating a 40 percent increase over other starter homes that didn’t include them. For mid-level listings, mentioning a “shed/garage studio” can help generate a 24 percent price bump.

For sellers looking to turn the house around quickly, rather than merely generating the highest sales price possible, mentioning “exposed brick” typically sold two weeks faster than those without the feature. Terms such as “open shelving,” “dual flush,” and “mid-century” also sped up the sales process for homes including those features during the examined time period.

“While everyone has different style preferences, when it’s time to sell, being specific and strategic with your home’s listing description can have a big financial payoff,” says Jeremy Wacksman, Zillow’s CMO.

Remodeling Magazine recently conducted a study to determine which home renovation projects retained the most value during resale. Garage doors topped that list, recouping an average 98.3 percent of cost at resale. Rounding out the top five below that were manufactured stone veneers, entry door replacements (steel), deck additions (wood), and minor kitchen remodels.

As for the Zillow report, it also reveals that advertising a “pet shower” can earn sellers an extra 25 percent. Extra money and clean pets—it’s win-win.



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Renting: Landlords can’t find former tenant to return deposit

Fri, 04/13/2018 - 8:07am

Q: My husband and I own a duplex in Minneapolis, and we have a tenant who moved out in July 2017. We mailed her refund for her security deposit to the forwarding address she gave us. A few weeks later, she followed up with us to tell us she never received the check. We canceled that check, figuring it was lost in the mail and proceeded to send a new check. However, this time we sent the check by certified mail in order to track the mailing. That letter was ultimately returned to us; the receipt stated that no one at the address was available to sign for the envelope. We heard nothing more about this matter until January, when she reached out to us again, asking when she would receive her security deposit. The next day, we sent another check by certified mail to the same address. On the second attempted delivery (which we scheduled through USPS with the day and time the renter supplied us) the certified letter still has not been delivered. It is being held at the post office. Since this has cost us money to send two certified mailings, as well as to cancel the original check, we are at a loss on how to proceed. Have we fulfilled the legal requirement in Minnesota in attempting to return our tenant’s security deposit?

A: In Minnesota, the law requires the landlord to send the deposit or a letter outlining why part or all of the deposit has been withheld. Ordinarily, the tenant informs the landlord of their new address or the landlord sends the deposit to the tenant’s last known address, and the deposit is forwarded along with the remainder of the tenant’s mail. A tenant can legally use a work address, a relative’s address or a post office box. In your case, your tenant has given you a mailing address, but is not picking up the certified mail. Her failure to pick up her mail is not your fault, and you have gone beyond the legal requirements for returning her security deposit. When you pick up the certified letter after delivery has been refused, simply hold onto it as proof that you sent it. If the tenant calls you again, you may tell her that you have more than complied with the law and that if she wants her deposit she can come and pick it up. At that time, you can issue her a new check or give her the old one, but have her sign a receipt acknowledging that she has received the deposit and that you have complied with your duty to send it.

Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to, or write to Kelly Klein c/o Star Tribune, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.



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Landlords Win Appeal in San Francisco Rental Market Fight

Thu, 04/12/2018 - 4:02pm

(CN) – A California appeals court reversed a lower court decision with implications for the property rights of landlords in San Francisco on Wednesday.

The California First Appellate District ruled in favor of the Small Property Owners of San Francisco Institute, which argued that San Francisco’s law requiring landlords to wait ten years after evicting tenants before improving their property was illegal.

“The ordinance in SFAA rather than regulating the particulars of a landlord’s proposed merger of a residential unit prohibits a landlord withdrawing a residential unit from the rental market from merging the unit with another unit for 10 years,” the three-judge panel wrote. “In doing so, the ordinance imposes a penalty on the very class entitled to protection under the Ellis Act—to wit, landowners seeking to exit the residential rental business. As such, the ordinance is indeed invalid.”

The Ellis Act is a California law passed in 1985 allowing landlords to exit the rental market and improve their property, so long as they don’t put the property back on the market.

In the throes of a severe housing affordability crisis, San Francisco County Supervisor John Avalos sought to craft regulations to dissuade the owners of non- conforming rental units – typically more affordable – from exiting the market.

He came up with a ten-year waiting list with the hopes of reducing Ellis Act evictions.

The modification to the planning code passed unanimously in December 2013 without public comment.

The institute’s failure to protest the ordinance during the county’s administrative process was a major reason the lower court ruled against it during summary judgment.

However, the state appeals court found that the ordinance’s clear violation of existing state law was enough to prevent its implementation.

“We conclude that because it imposes a 10-year waiting period for alterations of properties that have been withdrawn from rental use under the Ellis Act, Planning Code section 181, subdivision (c)(3) conflicts with, and is preempted by, the Ellis Act,” the panel wrote.



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Senate Passes Bill That Upends Some Short-Term Rental Bans

Mon, 04/09/2018 - 5:43pm

NASHVILLE, Tenn. (AP) — The Tennessee Senate on Thursday passed a bill that overturns some local short-term rental bans after lawmakers debated for more than two hours about property rights versus local control.

Lawmakers from Nashville were the most vocal against the bill. The city recently passed restrictions on short-term rentals such as Airbnb after neighborhood groups complained about noise and rowdy parties at the rentals and their rapid growth changing the fabrics of communities. Nashville passed an ordinance earlier this year that would phase out short-term rentals of non-owner-occupied properties, which have generated the most complaints from neighbors.

The measure that passed Thursday was a compromise allowing investors in short-term rental properties to keep renting them out and be grandfathered in if a local government bans them in the future. That would mean that Nashville and any other local government in Tennessee could put restrictions on the short-term rentals going forward but would have to grandfather rights to those operating legally before the restrictions were enacted.

One of the main sponsors of the measure said it was an attempt to protect the property rights of people who had already purchased homes being used for short-term rentals.

“This bill is about property rights and justice,” said Sen. John Stevens, a Republican from Huntingdon.

But other lawmakers wondered about the property rights of longtime neighbors who opposed the rentals.

Airbnb lobbied state lawmakers intensely after Nashville passed the ordinance limiting the short-term rentals.

One Nashville Republican took aim at Airbnb, the San Francisco-based company that uses an online platform to help travelers all over the world find short-term housing rentals.

“This comes down to a national company —Airbnb— trying to come in and jack up their stock price,” Sen. Steve Dickerson said.

The AP emailed the company, but a spokesman responded by saying Airbnb would not comment on the vote or the debate.

The bill would have originally allowed grandfathered properties to continue as short-term rentals even after they were sold or the owners died. But an amendment by Sen. Bo Watson, R-Hixon, terminates that right under the sale of the property and under other conditions.

The House passed a similar bill last year but still has to approve changes made by the Senate.


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Renters Losing Interest in Homeownership

Mon, 04/09/2018 - 5:43pm

Along with a declining rate of homeownership, analysts have noted over the last few years that fewer Americans appear to be heavily invested in the dream of owning a home.  New research from Freddie Mac gives more credence to what a company official calls a historic shift in the preferences of older consumers.

Freddie Mac’s spring edition of its Profile of Today’s Renter finds that affordability is driving the rent-versus-buy decision process.  Sixty-seven percent of renters who responded to the Profile survey viewed renting as more affordable than owning, including some of those in age groups that have long had the highest homeownership rates.  Among Baby Boomers, who are now aged 53 to 71, 73 percent of those who are non-homeowners said renting was more affordable.  Sixty seven percent of those renters who said they plan to continue as renters cited financial considerations as the reason, up from 59 percent in 2016.

Half of the Boomer renters said they did not anticipate buying a home in the future, eight points higher than responses in the previous survey conducted in August 2017.  Of those, 35 percent have no interest in owning, and 15 percent believe they will never be able to afford it.  Similarly, 31 percent of Gen Xers (aged 38-52) said they would continue to rent, up from 28 percent previously.  Of those respondents, 19 percent lack interest in buying and 12 percent believe they will never be able to afford it.

David Brickman, executive vice president and head of Freddie Mac Multifamily, said “Perceptions of affordability and cost continue to play an outsized role in the choices of America’s renters, as they overwhelmingly see renting as more affordable and the right choice for them – right now.  Remarkably, half of baby boomers who rent do not anticipate owning a home in the future, with a growing number of Generation Xers following suit. Indeed, we are witnessing an historic shift in preference among older Americans, as they increasingly are choosing the size, convenience and affordability that renting offers over ownership.”

Even though the survey found a growing number of renters who said their economic situation has improved since the last survey, it also noted affordability was more of a concern.  The 67 percent of renters who plan to continue renting for financial reasons is even higher among Millennials, those 21 to 37 years old.  Seventy-four percent of that cohort expressed that opinion, up 15 points since 2016.  The percentage of multifamily renters (versus single-family renters) with that view jumped from 57 percent in 2016 to 68 percent today.  While the increase was apparent for all locations, it was more apparent among urban renters.  

Sixty-six percent of renters are moderately or very satisfied with their renting experience, the highest such responses since 2016.  Among those who had experienced rent increases, 64 percent said they like where they live and have no intention of moving.  This response was significantly higher (70 percent) among Boomers than Millennials (59 percent.)

Most renters – 54 percent – continue to believe that renting is a good choice for them now, including 71 percent of millennials.

A companion survey found that cost concerns also play a major role in mobility and housing choices.  In that survey 64 percent of renters said price was the most important factor when considering their next home.  This answer was consistent across all age groups. It was also noted that, again regardless of age group, more renters perceived homeownership as less accessible than they did three years earlier.  Eighty-one percent of renters thought it would be difficult for them to buy a home, as compared to 38 percent who believe renting a home is difficult. Plans to continue renting remain relatively constant, with a majority (55 percent) of renters indicating they plan to continue doing so.

Renters living in the West have more issues of affordability than other respondents. Sixty-four percent said they are spending less on other essentials because of increasing rents. This was at least nine points higher than responses in any other region. Those renters also perceive homeownership as more difficult to attain than other regions, with 51 percent believing homeownership is less accessible than three years ago.  

Brickman added, “Renter satisfaction remains high, but the continued shortage of supply and growing demand means more renters are looking at cost than ever before. Although it’s clear that the demand for rental housing will continue for the foreseeable future, this survey is also a reminder of the important role we play in financing low-income and workforce housing across the United States.”

The Renter Profile survey was conducted in February among 4,115 adults including 1,209 renters. The companion survey involved 2,600 respondents both owners and renters and took place in late November and early December 2017.  Both surveys were conducted online.


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