Author: Marlowe Clark

Advantages and Disadvantages of Co-living

Like any living situation, co-living has its pros and cons. An article from the July/August 2020 edition of NAR’s senior newsletter can help you understand what they are. NAR outlines the advantages and potential disadvantages as well as how to mitigate them.

First, the advantages. Sharing responsibilities in the home is sure to decrease the burden on everyone. It’s especially useful if residents have distinct strengths and weaknesses and can complement each other. Residents in a co-living situation also divide costs, whether it’s mortgages as a homeowner or rent as a renter. Another big plus is the social factor. Humans are inherently social, and our physical and mental well-being depends on a sense of community.

Conflict is bound to arise between any people living together. This is especially true when there are power dynamics or physical limitations at play. Homeowners and renters may battle for a sense of control. Differences in health and mobility may place an unexpected burden on some residents. Luckily, many conflicts can be avoided with written agreements and trial periods. Be sure to interview prospective residents and discuss with them matters of finance, cleaning, visitors and pets, scheduling, and private vs common areas and household items. Background checks and credit checks may also be advised.

Photo by Thanos Pal on Unsplash

How To Safely List Your Home During COVID-19

If you’re worried about listing your home during the pandemic, or if you want to take advantage of the increased inventory and buy a new home, there is a protocol for doing so safely, even in heavily impacted areas of California.

You should discuss with your agent the things that can be done to curb the spread of COVID-19. Some things you can do while others your agent will be better able to do. You can leave interior doors open prior to a showing to ensure visitors don’t need to open doors. Also, you can open windows before and after showings to let in fresh air.

In addition to opening windows for a showing, use disinfecting wipes or spray to clean surfaces that you expect may have been touched frequently, such as countertops, cabinets, light switches, and door knobs.

You and your visitors should wash hands or use hand sanitizer, wear masks or other protective face covering, and practice social distancing. Any disposable protective gear should be discarded when leaving.

The listing agent can discuss the precautions with the buyer and/or buyers’ agent. They can discuss taking care to avoid touching surfaces as much as possible and other safety measures, as well as check to make sure everyone is symptom-free.

The California Association of Realtors (CAR) provides a poster guiding the actions of visitors to minimize risk, which should be posted near the entry. CAR also provides a form called the Coronavirus Property Entry Advisory and Declaration (PEAD) which requires all involved to certify that they are aware of the safety requirements. That form should be signed by the agents, seller, and any visitors.

Be sure to call or email us for more information about safely showing property during the pandemic or regarding other aspects of buying and selling in difficult times. We each have over 25 years of experience in good times and in bad.

Photo by Clay Banks on Unsplash

More: https://journal.firsttuesday.us/farm-health-precautions-when-listing-your-home/72565/

California gets serious on housing shortage

It’s no secret that California has exorbitantly high home and rental prices as well as increasing homelessness. What may be less obvious is that the issue lies in housing construction. There simply aren’t enough affordable units being built.

That’s why California’s Department of Housing and Community Development (DHCD) has established ambitious housing goals for the next decade. In order to be eligible for DHCD funding, a county such as Alameda County would need to plan to build 441,000 more housing units between 2022 and 2030. If that sounds unachievable already, take note that Alameda County is still behind by 188,000 units on its 2022 goal. As far as affordability, Alameda County has similar goals as other large metros for income distribution: about 45% to above-moderate income households, about 15% to moderate- and low-income respectively, and about 25% to very-low-income households. Local jurisdictions are also going to need to adjust their zoning laws to accommodate the new goals.

Photo by Denys Nevozhai on Unsplash

More: https://journal.firsttuesday.us/california-sets-lofty-housing-goals-for-the-decade-ahead/72328/

Co-Living vs Co-Housing: What’s the difference?

Co-living and co-housing are two types of housing arrangements that may be confused. Both are types of “intentional communities” — that is, communities in which the residents share some or all of the space. There are important distinctions in how that space is shared, though, outlined in July/August 2020 edition of NAR’s SRES newsletter.

In a co-living arrangement, all residents share a single dwelling, and the residents are not relatives. Each resident will normally have a private bedroom and possibly a private bathroom. The rest of the rooms are communal, including the kitchen, dining room, living room, and laundry area. This will be familiar to college students living in dorms, but it’s also a potentially beneficial housing arrangement of seniors who may not be able to afford their own housing space or may need assistance.

Co-housing communities, on the other hand, are more private, and likely more expensive. Each party in a co-housing situation may or may not be a single individual; they could be couples or families as well. In any case, the living unit is not shared with other parties, and no room inside the dwelling is communal. Instead, the communal space all exists outside the dwelling, in the form of activity rooms, pools, meeting rooms, or similar such areas.

Photo by Nastuh Abootalebi on Unsplash

Tips for seniors to find a housemate

More and more seniors are looking for a financially viable way to retain their independence as long as possible. Co-living is a promising solution, which means finding the right housemate for you. Here are a few tips to help, taken from an article in the July/August 2020 edition of NAR’s senior newsletter.

Don’t limit yourself to only looking for other seniors to be your housemate. College students are often looking for co-living situations as well, so such an arrangement could be mutually beneficial. You may look for other types of individuals that are not usually home, such as business professionals or frequent travellers. It’s okay if you and your housemate have differences. Learn to appreciate those differences and enjoy your time together.

Make sure they aren’t too different, though. Take the usual precautions to determine whether you and your housemate are compatible, such as shared interests, lifestyle, and privacy expectations. You and your housemate should complement each other’s strengths and weaknesses. Your safety is also important — meet first in a public place, have friends with you, get references and maybe even a background check or credit check.

Photo by LOGAN WEAVER on Unsplash

The barriers to homeownership for Black and Latinx buyers

Throughout the country, Black homeowners pay an average of 13% higher property taxes than White homeowners. This is because of assessed values, which are on average 10% higher in Black and Latinx neighborhoods relative to the sale price. Local governments use higher property tax rates to push for gentrification, which they know new white owners can pay but the minority families already living there cannot. White buyers are also more easily able to appeal their property tax assessment.

The problem is worse in California, where Prop 13 is limiting property tax rates on unsold homes by basing property tax assessments on the value at time of sale. The proposition is designed to protect older residents who are on a fixed income and could otherwise lose their homes. But there are some negative consequences for low-income buyers. As soon as the home is sold, the new buyer is potentially facing significantly higher property taxes than the previous owner was, which prices out some people who are otherwise able to afford the purchase itself. And in the meantime, local government has less revenue from property taxes, so they have to make up the difference elsewhere. This often comes in the form of sales tax, which, because the rate is identical regardless of the buyer’s income, is proportionally a larger burden for Black and Latinx indivduals who tend to be lower-income earners.

Taxes aren’t the only issue Black and Latinx people face, though. When the economy crashed in 2007-2009, minorities were disproportionately affected because of discriminatory lending practices. Lenders would statistically charge higher fees to minorities with equal qualification as whites, or steer minorities towards subprime loans regardless of credit history. This meant they were less likely to be able to pay their mortgages after the crash. With all these barriers to homeownership, Black and Latinx individuals lose out on one of the largest sources of wealth, owning a home.

Photo by Masaaki Komori on Unsplash

More: https://journal.firsttuesday.us/the-unequal-property-tax-burden-on-black-and-latinx-households/72464/

New LEED guidelines established for COVID-19

In order to help combat COVID-19, the U.S. Green Building Council has established new LEED safety guidelines. The new recommendations cover layout, materials, air quality, and smart technology, and are focused on senior care facilities.

The guidelines suggest that facilities renovate to create more single-occupancy rooms. Flexible layouts and multipurpose rooms can help to address both current and future concerns without needing additional space. Uncoated copper alloys are best for knobs and rails, as the copper alloys have an antimicrobial factor. Curtains should be replaced with glass or plexiglass. Countertops and floors should use nonporous or less porous materials such as quartz and Corian for countertops and porcelain, vinyl, or wood for floors. Ventilation is of utmost importance, particularly in bathrooms, and should be maintained regularly. Touchless features go a long way, such as automatic doors, touchless faucets, and voice activated lights.

Photo by CDC on Unsplash

More: https://magazine.realtor/home-and-design/feature/article/2020/07/elder-care-updates-to-counter-viral-spread

Microunits may be permitted in some multi-family areas

California bill AB 3173, introduced in February, would require some cities and counties to permit microunits in areas zoned for multifamily residences. The city or county must have a population of 400,000 or more to qualify for this requirement. Because of the way zoning laws operate, the bill would not apply on city land in a city with a population under 400,000 even if the county has a population over 400,000. The bill also establishes size and affordability requirements for the microunits.

Using 2019 population estimates for cities and the 2010 Census data for counties, the bill would apply in 8 cities and 21 counties. Eligible cities are Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, and Oakland. It’s possible that Bakersfield, with an estimated population of 384,145 last year, has now passed the 400,000 mark. Eligible counties are Los Angeles County, San Diego County, Orange County, Riverside County, San Bernardino County, Santa Clara County, Alameda County, Sacramento County, Contra Costa County, Fresno County, Kern County, San Francisco County, Ventura County, San Mateo County, San Joaquin County, Stanislaus County, Sonoma County, Tulare County, Solano County, Santa Barbara County, and Monterey County. It’s very likely that Placer County, with a population of 398,329 at the 2010 census, has now surpassed the requirement.

Photo by Lachlan Gowen on Unsplash

Read the full bill: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB3173

Recent changes to California UBI bill

California proposed a Universal Basic Income bill in February, which would be administered by the State Department of Social Services, called AB-2712. This May, AB-2712 was amended, establishing new requirements for eligibility as well as shifting administration to the Franchise Tax Board.

Under the amended UBI bill, the CalUBI Program would be an opt-in program that granted $1000 per month to eligible California residents over the age of 18. The amount is unchanged from the February version, but the amended bill establishes new requirements. The new requirements are:

-Currently reside in California
-Lived in California for the past 3 consecutive years
-Not currently incarcerated in a county jail or state prison
-Income no greater than 200% of the median per capita income in the county of residence

In addition, the amendments make this income non-taxable under state tax law, and won’t affect income eligibility for state programs. Rather than a flat value-added tax of 10% proposed by the original bill, the amended bill gives the California Department of Tax and Fee Administration until July 1, 2024 to report on the feasibility of a value-added tax.

Photo by Tingey Injury Law Firm on Unsplash

See the full bill: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB2712

Recession hits commercial real estate

In May of this year, commercial property sales were at their lowest level in a decade, and commercial renters are struggling to pay rent. Retail and hotel tenants, who were hit the hardest, are current on leases at rates of only 41% and 37% respectively as of June. This also affects the income of the landlords and investors.

Currently, California’s state of emergency is protecting commercial tenants from eviction. However, tenants don’t presently have protection for any length of time after the state of emergency is over. There is a bill proposed, Senate Bill 939, which would protect tenants for 90 more days, and allow 12 months for repayment.

One sector of commercial real estate is notably resilient: industrial. With so many people forced to move to online shopping, industrial properties suitable for e-commerce aren’t struggling nearly as much. Nevertheless, commercial real estate is still not going to be a great investment for the time being. We can expect this trend to continue for a couple more years, as 2022 is the earliest expected year of recovery.

Photo by Wonderlane on Unsplash

More: https://journal.firsttuesday.us/commercial-real-estate-is-reeling/72262/