The legislation is scheduled to be approved by the Board of Supervisors by next week. It states that apartment developers who have properties benefitting from tax breaks and zoning changes will be required to rent out part of their apartment buildings at affordable rates. In the old ordinance, all apartment developers and owners, regardless of whether they benefit or not from government efforts are given the choice of either renting part of their properties at affordable charges or paying a certain amount of fee.

The old ordinance was deemed in violation of state laws by an appellate court. According to the court, the ordinance is against legislation aimed at protecting the rights of apartment owners and developers of rental property listings to establish rental rates for their own properties. The court further added that only apartment projects that get public benefits can be required to follow the ordinance.

The appellate court's ruling was upheld statewide, but this has not stopped jurisdictions from trying to find a way to get apartment developers to provide affordable housing rates to city tenants without violating the statewide rule. The latest proposal is reportedly part of local officials' efforts to get apartment owners to do their share in providing affordable housing units to city dwellers.

According to the proponents of the new legislation, the proposal will affect but a few projects since majority of apartments benefit from public aid, either through tax exempted bonds and tax credits or through zoning changes. Law experts have stated that the new rule can withstand any legal challenge and is likely to be upheld in most areas of San Francisco.

They further added that the rule will hold at any court if it can demonstrate that rental property listings developments have some adverse effects on the housing market of a particular community. They also stated that the generic nature of the proposal will make it hard for challengers to win their case.

The Census Bureau reported that households living in properties that they own are at 66.9% during the third quarter of 2010. The rate remained unchanged when compared with the 2010 second quarter. The last time that home ownership rate was at a lower level than its current status was back in 1999 when 66.7% of households all around the country own residential properties.

Historically, 64% of households occupy houses that they own. The figure started rising in 1995 following government campaigns aimed at encouraging people to own residences. Several legislators have reportedly pushed Freddie Mac and Fannie Mae to buy more loans designed for low income families, while others encouraged borrowers with weaker credit ratings to go for subprime loans.

Ownership of residential properties reached its highest level in 2004 at 69%, but started declining in 2006 and continued to decline as the housing market crisis hit. Today, rental property is considered much more preferable than home buying by most Americans, market analysts have reported.

The decline in home ownership is expected to continue until next year due to huge supplies of foreclosures and strict lending rules. Analysts are predicting that ownership of homes will return to the level recorded before 1995 when fewer Americans value residential property investments. According to some housing market experts, the government is partly to blame for the crisis in the residential property industry.

They argued that past administrations have allowed borrowers with low credit ratings to get loans, which eventually led to defaults. The number of houses that are empty or vacant has risen since 2006, analysts have reported. Four years ago, the number is estimated to be at 16 million. By the end of 2008, the number is estimated at 19 million. Rental property vacancy is around 10.3%, while primary home vacancy is at 2.5%.

A big percentage of Gen Y members are expected to come into the rental market soon and landlords and owners of rental housing are reportedly preparing for this occurrence and tailoring their services to this particular generation. However, Kern has cautioned that it will be wrong to ignore other age groups as majority of Gen Y are not even employed yet. He added that over 30% of this population still relies on their parents for financial help and most are still living at home with their families.

The home for rental market's anticipation of younger renters was largely influenced by the U.S. Census Bureau's report that around 57 million Gen Y members will reach the prime rental age of 22 from 2008 to 2020. This has led landlords and multifamily dwelling owners to prepare for younger renters.

However, Kern and other rental housing market analysts have stated that it will be ill advised for rental home owners and builders to start playing music in apartment lobbies aimed exclusively at young people, particularly if these sounds have the potential to annoy other age group renters. They added that using paint colors in apartments and lease centers particularly designed to attract young people might turn other potential renters off.

Kern has advised rental housing developers and landlords to focus on preferences common to all age groups. Security and comfort, he added, should be the primary focus of rental housing. He also stated that the best way to attract all types of renters is to provide trustworthy information that will allow them to make intelligent decisions and will promote a good relationship between renters and multifamily owners. This, Kern has asserted, will also lead to long-term retention of home for rental dwellers.

One of the two properties, called Aire, has 42 stories and 310 units. It was developed by the firm A & R Kalimian Realty. The rent for two-bedroom comes at a minimum of $6,000. The other newcomer, Corner, is comprised of 19 stories and 196 units. Corner was developed by Gotham Organization. The two-bedroom monthly rent for Corner starts at $8,000.

According to local rental market observers, these rents are around three times more than the usual two-bedroom rents required by most properties in the area as of March 2010. For Corner, the highest rent for three-bedrooms starts at $18,000, while Aire rents can reach as much as $20,000.

Despite the relatively high rents required by the two buildings, local real estate analysts believe that they will not have any problem getting tenants. They added that properties rental in the league of Aire and Corner is starting to attract more people. They cited the Grand Tier, a building that rents for a start of $7,000, as example.

Properties near the 72nd Street have been moving towards upscale accommodations in the past few years. Realtors have stated that this trend is evident through properties for-rent like the Time Warner Center, the Central Park West condominium and condominium units at the Apple Bank.

Rental property experts have also stated that the amenities of Corner and Aire demonstrate the shift from regular walk-ups to more upscale properties. Reports revealed that every room of the Corner has a dryer and washer, glass shelves and medicine cabinets in the bathrooms.

Meanwhile, Aire units were designed like a boutique hotel, with pedestal sinks, stainless refrigerators and mahogany floors being just some of the amenities. Rooms at the Aire range between 415 square feet and 2,000 square feet.

Properties rental in the Upper West Side used to be dominated by walk-up buildings with cheaper rental rates. The opening of Aire and Corner is being seen by local market observers as a sign that the area is now moving towards doorman-guarded buildings and more upscale properties.

Under this new legislation, owners of rental housing built after 1979 will have to follow tenant eviction laws followed by owners of residential rental properties built before 1979. Under tenant eviction laws prior to 1979, landlords are prohibited from evicting renters without a reasonable cause. Tenants can only be evicted by just reasons such as breach of lease contract or failure to pay rent.

The new legislation would affect about 20,000 residential rental properties built after 1979 and about 10,000 units more which are being constructed or being planned.

While tenant advocates were elated at the approval of the eviction protection legislation, they cannot claim complete victory yet because the legislation still needs approval from Mayor Gavin Newsom, who had expressed strong opposition to the legislation that would add more challenges to those currently faced by owners of house rentals.

According to spokesperson Joe Arellano, Mayor Newsom planned to veto the proposal, and his veto can be upheld if the final voting by the board gives him the majority. The latest voting, 7-4, needed one more vote so that the legislation would become veto-proof.

The board will again consider the legislation to get the veto-proof majority, but the swing vote – expected to come from Supervisor Bevan Duffy – may not be easy to get. According to Duffy, he does not plan to change his vote.

But Duffy, who has expressed his plan to run for mayor in 2011, is being pressured by renters and tenant advocates to change his vote. Sara Shortt, head of the Housing Rights Committee of San Francisco, said that voting for the proposal should be an easy decision for any city lawmaker because 60 percent of the city is comprised by renters and there is a shortage of affordable housing.

According to Duffy, he would have voted yes if the legislation focused on evictions due to foreclosures. He argued that the legislation would have unintended consequences.

In addition, real estate owners and investors in San Francisco argued that the new legislation would diminish real estate rights and violate a pledge made by city officials to owners of house rentals when they enacted the rent control law in 1979.

Using data from the U.S. Census Bureau, the center also found that renters in New Orleans spent more for rent and utility bills than renters in the other cities studied in 2008, including Las Vegas, Baltimore, New York City, Milwaukee, Memphis, Phoenix and San Antonio.

Out of all New Orleans renters, 41 percent spent at least half of their pre-tax salaries for their rental housing.
In Jefferson Parish and Saint Tammany, 27 percent of households spent 50 percent of their income for rent.

Last year, the median monthly rent in Saint Tammany was $982. The median in New Orleans was $908 and the median in Jefferson was $854.

According to affordable housing advocates, the burden of paying rental costs in New Orleans is heavier because of increases in costs of living in the metro area.

Landlords in New Orleans also explained that they have to increase their rents because they spent high costs in building and maintaining their house rentals after the Katrina disaster.

Homeowners in New Orleans also bear heavier housing burdens than other cities because of increases in the costs of insurance premiums, taxes and utilities in the metro area.

In Saint Tammany, 27 percent of homeowners spent more than 33 percent of their monthly income on housing costs while Jefferson homeowners spent 26 percent – lower than the nationwide average of 31 percent.

Among lower-income New Orleans homeowners, 36 percent spent more than 33 percent of their income on housing costs. Low-income homeowners particularly have been suffering because 81 percent of them spent more than 33 percent of their monthly income on housing costs.

Housing advocates cite the difficulties of the low- and lower-income families in paying their monthly home loan payments as major reasons for foreclosures in the city. They said that post-Katrina salaries have not increased to keep pace with the increase in rents.

According to the Data Center, the rise in New Orleans housing costs to unaffordable levels is a clear indicator that the city needs to step up its affordable housing programs.

But the State Bond Commission decided to stop subsidizing affordable construction in the city in September until a comprehensive market study on house rentals and affordable housing is completed.

In the third quarter of this year, effective rents dropped for the fourth consecutive quarter, the first time it occurred since Reis began monitoring rents in 2008. Effective rent refers to the final amount after incentives such as free one-month rent are deducted.

Victor Calanog, head of research at Reis, also said that in addition to freebies and incentives, landlords have also been lowering their asking rents sharply to entice tenants. They figured that lower income is better than nothing.

According to Calanog, tenants can ask a lot of concessions from landlords. Some landlords are even offering up to 4 months of free rent. Others are offering interior design upgrades, repainting work and free gym memberships. In some cases, if renters ask for assurance that their rents are not going to be raised after their one-year lease contracts expire, they get the pledge.

Based on data from brokerage Marcus & Millichap, the cities offering the most concessions are Atlanta, Denver, Charlotte, Phoenix and Austin.

In Atlanta, landlords are offering an average of 1.5 months free rent; Denver and Charlotte offering 1.4 months; Austin, 1.3 months; Phoenix, 1.2 months; Dallas-Fort Worth and Detroit, 1.1 months; Portland, 1 month; and Orlando and Salt Lake City, offering 0.9 months.

The cities with the weakest home for rental market are Omaha, Memphis and Indianapolis, but these cities are not in the list of cities offering concessions. As vacancy rates increase in these three cities, landlords are advised by analysts to reduce their rents or provide incentives.

According to Calanog, the depressed rents are not likely to reverse their direction in the next several months because of the continued increase in low-priced residential properties and increase in the unemployment rate.

Nonetheless, there are markets which are experiencing increases in rents such as Long Island and Colorado Springs. Both markets showed a 1.6-percent increase in rent in the third quarter.

In the next two quarters, rents are not expected to increase because historically these quarters are slow rental periods, according to Reis analysts. They projected that the rental vacancy rate will increase from the current level of 7.8 percent and surpass 8 percent in the middle of next year.

According to analysts, the home for rental vacancy rate has already surpassed the peak vacancy rate of 7.2 percent in 2004.

Page Mill was given 120 days to resolve its debt, based on documents filed by Wells Fargo with the Assessor’s Office of San Mateo County on September 25.

According to Wells Fargo spokesperson Elise Wilkinson, the bank has filed default notices on all of the apartment units and has warned Page Mill that unless it negotiates a new written agreement with Wells Fargo, all the apartment units will be foreclosed and sold off.

In September, a Superior Court Judge in San Mateo appointed David Wald as receiver and supervisor of the apartment buildings after Page Mill’s real estate management unit Woodland Park Management removed its staff from the complexes.

Wald hired Investors Property Services to manage the apartment units, partially addressing the concerns of tenants who have been worrying about the ownership of the house for rental units. Even before the foreclosure notices, tenant associations in properties operated by Page Mill throughout East Palo Alto have been filing complaints against Page Mill for raising their rents and for failing to maintain the apartment buildings.

Real estate analysts in the area said that Page Mill could negotiate a short sale, a loan-term extension or reduced interest rates, but some of them doubt the capability of Page Mill to raise the money to pay off its missed August payment.

Additionally, investors in multifamily properties in East Palo Alto have been long having difficulties because of the efforts of tenant associations and working-class families to control rents and maintain affordable housing throughout the city.

Investors who have huge plans of rehabilitating and improving apartment buildings and then raising rents are surprised to discover that they cannot just raise their rents without running into fierce opposition from the community.

For the November ballot, the city of East Palo Alto crafted a revised rent-control law to address loopholes in the current rent control law, but Page Mill was able to block the attempt.

Nonetheless, according to analysts, even if Page Mill has successfully blocked the planned revision of the rent control law, it may not be able to block the foreclosure proceedings by Wells Fargo and it may ultimately lose its power over house of rental units in the city.

Based on interviews, the block of apartment units on Mobley Lane has a history of troubled finances. Trilar Realty, which previously managed the property, said it stopped managing the property as soon as lenders foreclosed on the apartment units.

Some of the renters were more fortunate than other residents because they were notified by the owners before the foreclosure and they were given a couple of thousand dollars to move out of the properties. There were also some families which were told to stay and make their monthly payments to the new owners.

But for most of the renters, the foreclosures were becoming a nightmare because they are receiving eviction notices without any refunds of their security deposits or any financial assistance for moving out.

For those who have not received any kind of notice, uncertainty and anxiety have been filling up their nights and days because they do not know if they should continue paying their rent to the same entity, use up their security deposit or begin looking for another rental.

Adding to the woes of residents of the distressed homes for rental is the notice that electricity, water and garbage would soon be shut off even if not all of the renters have received eviction notices.

Despite the anxieties of eviction and lost security deposits, Hemet renters can take comfort from the Helping Families Save Their Homes Act, which was signed by President Obama in May.

The federal law protects renters of housing units that have been foreclosed by banks. Under the law, renters have the right to remain in their rented houses for 90 days after foreclosure. Those with longer lease terms as spelled out in their lease contracts can stay through the rest of the term.

Based on foreclosure data, about one-third of foreclosed housing units in California are rental units. Under California law, lease contracts are cancelled by foreclosure and renters must be given 60 days to move out after foreclosure.

But under the federal law, lease contracts survive the foreclosure of homes for rental. However, they can be terminated if the renters are given a 90-day notice. For some California cities that prohibit foreclosure evictions, the federal law does not preempt these prohibitions.

Either way, there is always the possibility of failure, but if one has invested in a real estate investment firm, one can sue the firm if investments fail.

This is what two Houston, Texas real estate investors and their wives did. Prominent businessmen Monty Davis and Richard Bergmark and their wives sued Plainfield-based real estate investment firm Connolly Properties Inc. after the rental apartment complexes in which their money was invested began to face foreclosure and bankruptcy.

According to the breach of contract action, the Bergmarks and Davises invested a total of $3.15 million in six Connolly Properties apartment entities starting December 2006 up to January 2009. Under their investment contracts, each release of investment money would be used to acquire, own and operate a specific income-generating property.

Two of the apartment entities in which the Texas businessmen invested own apartment buildings in Watchung Gardens, Netherwood Village and Plainfield in Texas. The other four apartment entities own house rentals in Pennsylvania.

The lawsuit centered on two apartment investments that ultimately failed. The families said that they invested in 2008 a total of $850,000 in the Connolly Properties fund Marshall Woods Trust, which planned to acquire a 305-unit apartment building in Norristown, Pennsylvania.

The Bergmark couple also invested another $240,000 in the Connolly fund Hampshire Court Trust, which planned to acquire a 54-unit apartment building in Plainfield.

In April this year, the families said, Connolly Properties CEO David Connolly informed them that he will not pursue the Marshall Woods purchase but instead acquire a 182-unit building in Falls Township, Pennsylvania. When the planned purchase again failed, the families demanded a return of their investment money.

Furthermore, the families claimed that Connolly Properties has not been responding to their demands, but instead has informed them that their money has been used to buy another property. The families reiterated that this third investment was carried out without their consent.

The two families also claimed that Connolly Properties wrote them assuring them that all its house rentals and other apartment properties have no liens or foreclosure cases against them. They however found out through a newspaper report that a foreclosure action has been filed against Plainfield Apartments, one of their investment properties.