News and Events

CPI Updated: New Allowable Increases Go into Effect Under State Law (A.B. 1482)

The good news for those of us subject to statewide rent control, rent increases this year can be greater, but the obvious bad news is that inflationary pressures have led to rapidly increasing prices for all goods and services. And, to add bad news on top of bad news, the allowable increase under state law, Assembly Bill 1482, is limited to just 10%. Under Assembly Bill 1482, annual rent increases are limited to the greater of (i) CPI + 5%, or (ii) 10%.

This week, the U.S. Department of Labor and Statistics published the updated Consumer Price Index (CPI) for major urban areas. The California (as a whole) CPI is still pending from the California Department of Industrial Relations; however, CPI data is now available for urban areas across California such as Los Angeles-Long Beach-Anaheim, Riverside-San Bernardino-Ontario and others.

Please be sure to refer to the footnotes when referring to the chart above. For help on which area to use to calculate rent increases, please contact one of our Operational Advisors for assistance.

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Join Scott Properties Group and the Asian Real Estate Association of America (AREAA)

at the "Achieving Success in Multifamily" in-person event on May 3rd, from 9:30am-5:00pm in Pasadena: Register - https://glaareaa.org/meetinginfo.php?id=36&ts=1650613363

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Multifamily Owners Aren’t Putting Enough Juice Into EV Infrastructure

When Ford, General Motors, Mercedes-Benz and other auto manufacturers last year pledged to phase out sales of gas and diesel vehicles worldwide by 2040, the most immediate impact on commercial real estate came in the form of multibillion-dollar plans to build domestic factories and battery plants.

But there is more for commercial real estate to facilitate and capitalize on, and it starts at home.

Friday marks one Earth Day closer to the 2040 goal and projections that about half of all cars on the road will be electric in 2050. As adoption becomes more common — 1.8 million electric vehicles were registered in the U.S. in 2020, three times the number of EVs in 2016 — more people need more access to charging, and multifamily developers and owners have fallen behind the rate of adoption.

“The way we characterize the problem is going to evolve over the next couple of years as EVs become more and more widespread,” said Don MacKenzie, an associate professor of civil and environmental engineering who leads the University of Washington’s Sustainable Transportation Lab. “Rather than this being a problem for people who want to own EVs, this is going to be a problem for landlords and building owners and developers when they realize that they are unable and they have not prepared themselves to provide an amenity that many residents have come to expect.”

Most electric vehicles have been sold to wealthy, single-family homeowners, but EVs are becoming more of a legitimate option for more drivers, and 56% of respondents to a 2021 CarMax survey said they expected their next auto purchase to be an electric or hybrid vehicle.

Public funds are behind the EV adoption and infrastructure build-out push. In addition to federal, local and state subsidies for drivers buying electric, the Biden administration's Infrastructure Investment and Jobs Act established the National Electric Vehicle Infrastructure Formula Program, which is tasked with deploying $5B over five years to help states fund public charging infrastructure, especially along the interstate highway system.

NEVI has another $2.5B available for a discretionary grant program to support deployment of rural chargers and infrastructure in underserved communities, among other priorities.

But as EV adoption becomes a more viable option for more people, owners of apartments and other multifamily properties waiting for federal money to trickle down to them aren't positioning themselves for rapidly increasing renter demand. “In the multi-unit dwelling setting, we actually think that the market is behind adoption interest,” McKinsey & Co. partner Shivika Sahdev, who leads the firm’s Center for Future Mobility, told Bisnow.

She said the profile of the prospective EV buyer is shifting, and not just along income lines.

“We’re also seeing folks that live in different types of settings showing interest in buying EVs, and for them, the biggest enabling factor is access to charging,” Sahdev said. “It continues to be one of the top three barriers to adoption for an individual.”

McKinsey projects the overall EV charging market to be $100B in 2030, Sahdev said. Of that, $43B will be spent on residential charging — a smaller percentage of the overall market because a single-family homeowner can buy a charger for as little as $200 while a commercial-grade Level 2 charger can cost $5K to $10K, and upward of $150K for faster, direct current chargers.

Of the $43B expected to go toward residential charging infrastructure, McKinsey predicts $2.5B will be spent for implementation at multifamily properties. Demand is expected to reach 27.4 million chargers in 2030, 1.4 million of which will be for multifamily properties.

Camden Property Trust, which owns and operates more than 165 communities with more than 59,000 units across the country, is among the large-portfolio multifamily owners that have begun to advance EV charging, but the process isn’t simple.

“In our new developments, we’re outfitting our garages with electrical service that can handle a substantial amount of cars,” Camden Chairman and CEO Ric Campo said. “It’s more challenging, for sure, in older developments where we have to upgrade our electrical service to garages and deal with those kinds of things.”

He said that over the last five or six years, Camden has been laying conduit and making other preparations to streamline retrofitting properties when consumer adoption spurs tenant demand.

Planning ahead could have a significant impact on how much a developer has to spend to install EV charging equipment, so even though only about 1% of the global car stock is electric, according to the International Energy Agency, the time for developers to act is now.

“If you’re planning a new development, I think it generally is going to be a lot cheaper because you don’t have to go in and rip out a bunch of existing stuff and put new stuff in,” said Adam Davis, a postdoctoral researcher at the University of California, Davis’ Institute of Transportation Studies.

Retailers have made headlines by making charging locations available to customers. Simon Property Group was an early adopter, making a Level 2 charger available at an Orlando, Florida, mall in 2011. JPMorgan Chase just this month announced a partnership with provider EVgo to install chargers at 50 Chase branches around the country as part of a pilot program.

“I think it’s finally getting to that inflection point where there’s enough demand in the market coupled with the right scale of a company like EVgo where they can say, ‘This is how we want to do it,’” JPMorgan Chase Head of Real Estate John McGinley said. “It’s a little more amenable to a Chase or another large retailer.”

More public chargers will be necessary as mass adoption takes hold to make EV road trips more feasible as electric cars evolve into primary vehicles instead of secondary options.

But EV experts say home charging availability will be so critical that it is destined to be a determining factor in where many people choose to live.

“I think within 10 years, this will kind of flip into now the consumer has the power and they’re choosing where they choose to rent — especially your higher-income renters, your luxury apartment [renters] — they’re going to be choosing where they live based on where they can plug in their car,” MacKenzie said. “So this could then become a liability for those who are not ready.”

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ULAA x Scott Properties Group Happy Hour for Real Estate and Finance Professionals

Please join the UCLA Latino Alumni Association (ULAA) and Scott Properties Group for an evening of learning and networking. The theme of the evening is generational wealth. This event is open to all UCLA alumni, faculty, staff, community members, and friends. Thursday, April 28th | 6:30 p.m. PDT RUSH at Culver City
9546 Washington Blvd.
Culver City, CA 90232 RSVP required: https://tinyurl.com/4knvabvz Cost: $20 per person

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NOW HIRING ONSITE MANAGER: WEST HOLLYWOOD PROPERTY.

NOW HIRING ONSITE MANAGER: WEST HOLLYWOOD PROPERTY. REDUCED RENT + PAY; For more info/email resume to: Info@scott-properties.com

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Landlords And Tenants Alike View Commercial Rent Debt With Trepidation

There has been much bracing for and discussion of an impending wave of evictions that some expect to follow the end of the residential eviction moratorium in the city of Los Angeles and other statewide protections for residential tenants, but less broad attention paid to the city’s concurrent commercial eviction moratorium.

There is no official date yet for the end of the moratoriums, but as the daily case counts for Covid-19 decrease in the LA area and masking and vaccination proof requirements are rolled back, city officials are preparing for the eventual sunset of these regulations.

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So Cal Eviction Moratorium Extended and Rental Assistance Wrap Up

In this AOA Live Stream, you will discover:

• State Eviction and rent increase guidelines
• Update on LA County COVID-19 Tenant Protection Resolution
• LA City Tenant Protections - any relief in sight?
• Live Q & A with Dennis Block

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What’s Next? An Important Legal Update

Hear a briefing on the latest extensions of the Los Angeles County and City of Los Angeles moratoriums on evictions and rent increases. Registration is closed. This event has already been held. Read More..

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My Resident Manager Is Not Working Out—Now What?

via AOAUSA.com Clients thinking about terminating their resident manager often want to know whether they will be able to evict after they end the resident manager’s employment. A simple question but -- even ignoring any Covid eviction rules -- one that does not always have a simple answer. Many factors come into play and, even after those factors are sorted out, the answer sometimes remains frustratingly unclear... Read More..

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Section 8 Housing Reform Moves Forward

via GlobeSt.com Momentum is building for legislation that would increase private sector participation in the Section 8 Housing Choice Voucher (HCV). On March 1, H.R. 6880, the “Choice in Affordable Housing Act” was introduced, by U.S. Reps Emanuel Cleaver (D-MO) and John Katko (R-NY). This legislation parallels Senate legislation introduced May 2020 by Senators Chris Coons (D-DE) and Kevin Cramer (R-ND). Read More..

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