SFAA President's Report -- January 2007

Welcome to 2007. I wish that last year’s election was more encouraging, but it wasn’t. I wish that our rights as owners were respected and safe, but they aren’t. I cannot, and will not, paint an optimistic picture about the state of affairs in politics and government, but I do begin my first year as your president with one very important and simple message: Get involved!

For most of us, the apartment buildings we own constitute our biggest investment. These assets represent our retirement accounts, pensions, and disability insurance combined. Many of us depend on the rent and, eventually, the appreciation to take us into a comfortable post-work life, and perhaps to benefit our children when we are gone. None of us views these acquisitions as anything but extraordinarily important in our overall portfolios of wealth.

Yet how much does each of us really work towards protecting these investments? Yes, we belong to an organization devoted entirely to advancing the interests of the housing industry, but ask yourself if your involvement is relegated to reading the monthly magazine and ordering forms when you have a vacancy. Do you regularly contribute to the legal fund? Do you attend the membership meetings? Do you recruit new members? Are you active participants or simply dues paying bodies? I suspect many of us fall into the latter category.

My goal is simple and straightforward. This organization, if it is to be effective, must become more active locally and statewide. This means increased membership and funding. Complaining about the state of affairs or an elected official does nothing to improve our lot in the world. Continual and unwavering support of legal challenges and campaigns will, on the other hand, yield a positive effect over time. Apathy and pessimism lead nowhere. Putting forth a sincere effort will ultimately take us to change.

I have listened to many of you complain about dues and fees. Yet anyone who owns an apartment building in San Francisco is, by national standards, wealthy. Why, then, is it difficult for us to raise money for campaigns and viable candidates? How many times will we let Prop Is, Prop Gs, and Prop Hs pass before we pour serious money into efforts to defeat these bills? You can’t just let the other members pay, because this attitude is proven to be contagious. American politics requires money and money is something we need to raise amongst our membership each and every time we are faced with more erosion of our rights. In San Francisco, such assaults are as regular as the fog rolling through the Golden Gate on an August afternoon.

And what about mounting an offense? For instance, this year we should put at least one measure on the ballot that would restore some of our rights. While undoubtedly you applaud such an idea, what is required for this Herculean effort is cash and volunteer time. Will you provide this?

Please remember that our organization is a non-profit institution. No one gets rich because more owners join. The contributions you make do not enhance someone’s lifestyle. Rather, the bulk of SFAA consists of volunteers and modestly paid employees working long hours, day after day, in an inhospitable political climate. Yet ironically, the gains we achieve increase your wealth by making your assets more profitable.

And consider the alternative to effective activism. Every time more bad legislation becomes law, the attractiveness of your property diminishes. The obvious example is the prohibitive restrictions on evictions. How can someone pay top dollar for housing when it will require an enormous amount of time, money, and even luck just to move in? Less apparent effects include the general degradation of the housing stock because owners either cannot afford or refuse to rehabilitate their buildings, as government has even restricted the ability to pass these costs onto rent controlled tenants. While you may be one of the fortunate few with good tenants and no problems, the laws that get passed and the candidates who get elected will determine the value of your building over time. In addition, don’t count on never having to evict someone or to seek reimbursement after making capital improvements. We all experience difficulties as owners at some time or another. The bottom line is that all of us are in the same boat, and we need to view our neighbor’s plight as our own.

Unquestionably, time is of the essence. I predict that in the next few years we must, as an industry, fight off continued assaults at City Hall as well as in Sacramento. We face an electorate who is either apathetic or hostile to our positions. Therefore, many of the battles will occur in the courtrooms. Our ability to win is entirely dependent on your contributions, both monetarily and by way of active participation.

I joined the SFAA because I had purchased a 5-unit building in the Mission District. I wanted to learn the ins and outs of being a landlord, both because of my investment and because I was beginning a law practice specializing in this area. While both of these needs were quickly met, I soon discovered that the tenant interest groups were relentless in their efforts to restrict my rights, and their success rate was impressive. As such, I could no longer sit by and reap the educational and business benefits of this organization without getting involved in making it stronger so that someone was effectively advocating for our position. I do not regret my decision, and I hope each of you will make this same commitment.

In sum, each of you needs to ask yourself what you can do to make this organization stronger. Please remember that your help is not limited to sending in a check once or twice a year; rather, I ask that you help us recruit more members, and that you attend our meetings and fundraising events. I will fail as your president if I cannot motivate you to comprehend the importance of this message. The SFAA leadership will fail if these goals are not achieved in this New Year. More importantly, the inability of our organization to succeed will exact significant financial detriment to you and everyone else who has invested their life’s earnings in rental housing. So let’s step up the level of participation and involvement now.

Happy New Year, and may we look back at 2007 at the year when the tide turned!

DW