AB 1506 IS DEFEATED IN COMMITTEE

A MESSAGE FROM AAGLA EXECUTIVE DIRECTOR, DAN YUKELSON

COSTA-HAWKINS IS SAVED…
FOR NOW. TO BE CONTINUED.

Today is a great day for the multifamily housing industry. An Assembly bill introduced by Richard Bloom (D-Santa Monica), AB 1506, to repeal the Costa-Hawkins Rental Housing Act of 1995 (“Costa-Hawkins”) has been defeated. In a meeting today in front of the Housing and Community Development Committee, a 5 member committee, two members were in favor, two were against, and one member, Ed Chau, abstained; therefore, preventing the Bill from moving forward to the General Assembly.

Just prior to today’s Housing and Community Development Committee meeting on AB 1506, your Apartment Association of Greater Los Angeles and its affiliated associations mobilized and encouraged their members to email and call Ed Chau’s offices urging him to Vote No on AB 1506. As a result, calls and emails flooded into Ed Chau’s offices and eventually, Ed Chau shut off his phones! We sent busloads of sign-carrying housing providers to today’s meeting in Sacramento to urge the Committee to Vote No on AB 1506. And, it worked! Ed Chau abstained, which is the same as a No Vote.

Advocacy works!
Your efforts paid off. Thank you all that contributed to the effort to defeat AB 1506.

Costa-Hawkins is a landmark, California state law that places many protective limits on local rent control ordinances. Costa-Hawkins provides two major benefits: (i) first, it prohibits municipalities from establishing rent control over certain types of housing units such as single-family homes, condominiums and newly constructed rental units; and (ii) second, it permits “vacancy de-control”, or in other words, it allows rental housing providers to set their rents at the prevailing market following a tenant’s vacancy. Without Costa-Hawkins, rental housing providers in cities such as Santa Monica and West Hollywood could not raise their rent to market under any circumstances. It is Costa-Hawkins that mandates cities to permit an apartment owner to rent an apartment, when vacant, at any price (e.g., market price). AB 1506 would have repealed Costa-Hawkins entirely.

Although we have won today’s major battle, it is likely that AB 1506 will return in a different form by “chipping away” at some of the protections we have under Costa-Hawkins instead of the full repeal sought by Bloom. In addition, we are faced with a statewide ballot initiative that has been filed by well-funded, price control extremists that, if passed, would repeal Costa-Hawkins in its entirety. The proponents of the initiative have raised nearly $20 million to assure its passage.

We must all continue to join in the battle against these dangerous threats to the rental housing industry in California. The only way that we can defeat the initiative or other attacks on Costa-Hawkins is with money and your involvement.

IT IS IMPORTANT THAT YOU GIVE GENEROUSLY TO THE AAGLA POLITICAL ACTION COMMITTEE TODAY.

If you have the means, please give generously. Now more than ever, we need those that can afford to, to write $1,000, $2,5000, $5,000 or even $10,000 or more checks. If we lose the battle to save Costa-Hawkins, we could lose billions of dollars in lost rental income and property value. If we lose the battle over Costa-Hawkins, many of our members will end up in financial peril.

Now more than ever, stay involved, advocate and give to the AAGLA POLITICAL ACTION COMMITTEE. The Apartment Association of Greater Los Angeles is your regulatory insurance. AAGLA is constantly working on your behalf to ensure your voice is heard and your property rights are protected. We always have your back every step of the way. Support us and we will win.

GIVE YOUR SUPPORT

Seismic Retrofits Now Mandated For Apartment Owners!

By Ali Vahdani, P.E.  Reprinted with permission from the author via  Apartment Association of Greater Los Angeles (AAGLA)

Twenty-two years ago this January, Southern California suffered one of its deadliest and most destructive earthquakes: a 6.7 magnitude jolt that killed more than 60, injured more than 9,000 and caused as much as $25 billion in widespread damage.

Freeway overpasses crumbled.

Gas and water lines snapped, creating an apocalyptic release of both fire and flood in the streets. Blackouts were widespread. Even the U.S. Postal Service halted delivery for days.

But perhaps the most stunning example of the Northridge Quake’s destructive power was the collapse of the Northridge Meadows Apartment building, which crushed 16 residents and flattened cars in the ground-level parking of the soft-story structure.

The disaster prompted a sweeping call for stricter building codes throughout California: a mandate for seismic retrofitting of non-ductile concrete frame buildings and wood structures with soft-story conditions.

Many years and several large-scale earthquakes later – and after decades of controversy – the Los Angeles City Council late last year approved the nation’s most sweeping seismic regulations, affecting some 15,000 buildings in the city.

Building owners have seven years to retrofit their wood buildings with soft-story conditions, and 25 years for nonductile concrete frame structures.

Beginning soon, the Los Angeles Department of Building and Safety will begin issuing courtesy letters to the owners of these buildings, advising them of the required upgrades per the ordinance:

  • The orders will come on a rolling basis, with the city’s largest apartment buildings – those with 16 or more units – getting the first wave of orders.
  • Structures with three or more floors but less than 16 units will come next, followed by all others.

Owners of soft-story buildings will have one year from the date they receive their order to either submit proof that the building doesn’t need retrofitting, or plans for retrofit or demolitions.

Within two years, they must obtain permits to get the work done.

All work on soft-story structures must be completed within seven years of receiving an order, the ordinance states.

A Shared Financial Burden

This January, the Los Angeles City Council agreed that renters and apartment owners may equally share the costs of earthquake retrofitting, a decision that put an end to contentious debate over one of the most far-reaching mandatory retrofit laws in the nation. Similar ordinances in other cities are expected to come.

The Structural Engineers Association of California estimates there may be as many as 100,000 buildings in Southern California facing comparable mandates as other cities and counties consider adopting retrofit laws of their own. Already, L.A. County, West Hollywood, Santa Monica and many others to the north are in the process of considering similar laws of their own.

The law in the City of Los Angeles allows apartment owners to split the costs of seismic retrofit work with their tenants with rent increases of up to $38 per month to cover half the costs of a retrofit.

“Today’s actions will save lives,” Los Angeles Mayor Eric Garcetti told the Los Angeles Times when the vote was passed. “I’m not interested in making history or having the toughest laws. I’m interested in preserving our city’s ability to survive and thrive after an earthquake.”

Many are reluctant to get the work started, but here are some reasons why it’s best to act promptly:

Retrofits Protect Your Assets

Earthquakes are a certain occurrence in California.

It’s not a matter of if a major quake will come, but when.

Geophysicists at NASA’s Jet Propulsion Lab recently determined that there is a 99 percent probability that a major quake will rock California in the next 2 ½ years, and that Southern California is extremely likely to experience a magnitude 5.0 quake or higher during that time.

Yes, soft-story property owners have seven years to get the work done, but no one is advising anyone to wait until the last minute.

“Everyone knows that major earthquakes are inevitable,” said Earle Vaughan, a longtime apartment owner who for the past 15 years has served AAGLA as a director. “I have already completed a retrofit on my property because I know it will not only be needed down the road, but it protects my tenants and investment from anything that may happen in the near future.”

Indeed, seismic retrofits are the best option an apartment owner can take to protect his or her investment.

The University of California at San Diego, home to the world’s largest outdoor shake table, has done repeated tests replicating the effects of a quake on a variety of structures.

They recently conducted experiments on the performance of soft-story structures – buildings constructed over ground level parking – and found that retrofits are quite effective in helping to control or even prevent damage.

Other studies show that retrofits can be cost-effective, too.

Researchers at Caltech recently determined that for every dollar spent in retrofitting soft-story structures, property owners could expect to save up to 7 dollars, and that study didn’t include loss to contents, alternate living expenses or deaths and injuries – all of which would have significantly increased the cost-to-benefit ratios.

Retrofits Can Save Lives, Reduce Liability

This should be everyone’s No. 1 reason for completing a retrofit, but the reality is that we all gamble with life and limb when it comes to forking out money for things that are uncertain.

Case law has now set a precedent that puts the responsibility for death, injury or property damage in the hands of the property owner.

Owners of the Northridge Meadows Apartment complex – the structure that collapsed during the 1994 Northridge quake, settled multiple claims filed by the families of the victims.

Similarly, the 1989 Loma Prieta quake resulted in building owners paying out millions in damages to the families of people injured or killed from failure of their buildings to withstand the earthquake.

A more recent case out of Paso Robles found property owners liable for the deaths of two people during the San Simeon earthquake of 2003. A jury awarded the families of the victims $2 million, concluding that the property owners were negligent for not making the building safer. A state appeals court upheld the verdict in 2010.

Even though the earthquake itself was an “Act of God,” the courts found the property owners negligent because the structure had been identified by the city as requiring seismic retrofits and that even though the deadline to do the work had not yet passed, the owners should have taken prompter action for safety’s sake.

Legal experts found the decision profoundly significant, comparing it to the hypothetical case of a building without sprinklers or fire extinguishers being struck by lightning and catching fire.

If you have a building that is susceptible to collapse and you’re aware that it requires retrofitting to withstand an earthquake, you may be liable.

“As a property management company, we are very concerned with limiting liability issues for our clients,” said Irma Vargas, of RST and Associates. “We have started early on seismic retrofits because we wanted to be proactive in addressing this issue for the safety and protection of both the owners and the residents of our properties.”

Early Action Reduces Haste and Waste

Optimum Seismic is the L.A. area’s leading retrofit company and AAGLA’s Preferred Supplier. We participated in the development of the city’s retrofit policies – bearing in mind that structural engineering, cost analysis and risk management were all important pieces of the solution.

We have completed more than 1,600 retrofits on various types of buildings in the state of California, and demand is increasing.

There is too much work to be done by any one company, but the reality is that heightened demand will drive up price and spark an influx of startup companies who may not have the professional expertise and experience necessary to get the job done right.

Give yourself the time necessary to go through the retrofit process carefully.

Optimum Seismic is teaming up with AAGLA to host 15 public workshops on the subject in various districts throughout the city to inform people about the law, various options available, and recommended steps.

We will also be reaching out to you, the readers of Apartment Age magazine, with regular updates providing step-by-step instructions on everything from start to finish.

Ali Vahdani, a State of California Licensed Professional Engineer, has more than 35 years of experience in building and structural retrofits. His is president and founder of Optimum Seismic, a leading seismic engineering and construction firm serving all of California.