Properties for rent in Tampa, Florida will still face rental and occupancy challenges in 2010 despite expected declines in rental inventory because of continuing job losses, according to analysts working for Marcus & Millichap.

The analysts predicted that apartment rents in Tampa will drop further by four percent even if demand will rise slightly. The average vacancy rate is expected to rise to 10.8 percent from the previous month’s rate of 10.5 percent.

The average apartment rent is also expected to fall this year to $767 from $797 in 2009. Rents have fallen by about 10 percent from the average rent of $843 in 2008.

Over the same periods, vacancy rates have grown sharply from 6.9 percent in 2007, when a lot of condo conversions occurred, to 8.7 percent the following year. The months between 2008 and 2009 experienced drastic vacancy increases as the period accumulated nearly 180 basis points in rate growth.

In the Marcus & Millichap study, which surveyed 544 major rental markets across the U.S. for its 2010 apartment report, Tampa again ranked 40th based on economic performance. It was preceded by Fort Lauderdale in the ranking, but it performed better than West Palm Beach. Jacksonville ranked the lowest among Florida markets.

Washington, D.C. remains the strongest market in the U.S. for multifamily properties for rent despite a strong competition from San Diego, which surpassed four places in the ranking to become the second strongest.

According to real estate analysts, the U.S. capital is expected to emerge from the downturn much ahead of other metro areas. San Diego, meanwhile, is expected to continue experiencing lower vacancy rates and higher rental rates.

One concern that could affect rental property recovery is the shadow rental sector – comprised by properties not formally registered or not yet approved as rentals. Fannie Mae has been planning to allow distressed owners of Fannie-guaranteed homes to rent the properties for up to one year as they find out ways to reorganize their finances and weigh their housing options. This could further beef up the shadow market.

Investors looking to enter the property rental sector can explore student housing, Marcus & Millichap advised. In 2009, student housing exceeded rental expectations and surpassed apartment rental performance, posting a nationwide vacancy rate of only 7 to 7.5 percent.

Additionally, investors can also consider properties for rent in Tampa, where the median price in rental communities have dropped from $58,438 per apartment unit in 2008 to $54,671 per apartment unit in 2009.

Homes for rent in Albany are being neglected by landlords and banks as they lay on each other the responsibility of maintaining the rental properties.

Because of low rents, landlords cannot collect enough money to make repairs, even emergency repairs like burst pipes. Banks that foreclose on rental properties also refuse to make repairs, arguing that the properties have become nonperforming assets.

One rental building in Arbor Hill facing foreclosure is the multi-unit apartment complex at 299 Clinton, which is owned by nonprofit affordable housing entity St. Joseph’s Housing Corporation.

Due to financial difficulties, St. Joseph’s defaulted on its loan payments for its rental buildings in Arbor Hill, including 299 Clinton. Mortgage lender JP Morgan Chase Bank was forced to file foreclosure actions against St. Joseph’s Housing.

In December 2008, lawyer William Keniry was appointed by a New York Supreme Court judge as receiver for the Clinton property and other buildings owned by St. Joseph’s which are in foreclosure.

But despite the receivership, tenants of 299 Clinton and other buildings failed to get the repairs and maintenance that they needed. Keniry explained that St. Joseph’s did not have enough money to pay for repairs and that the rents collected were not enough to repair the homes for rent.

Keniry added that JP Morgan Chase also refused to provide funds for repairs, stating that the rental buildings were nonperforming assets. According to housing advocates like Roger Markovics of advocacy group United Tenants of Albany, disputes between landlords and mortgage lenders have become common during the economic downturn.

Markovics said that oftentimes landlords facing foreclosures have given up and therefore have no more interest in or money for making repairs. Similarly, bank lawyers make arguments about the lack of accountability of banks for needed repairs and maintenance work.

In December last year, St. Joseph’s Housing filed documents in court for bankruptcy protection to block JP Morgan from auctioning off the rental buildings. Martha Hobbs, head of St. Joseph’s, also blamed the receiver for not winterizing the buildings and for the worsening of the conditions of the buildings.

But according to housing advocates, St. Joseph’s Housing has a history of not being able to maintain its properties and properly screening renters. In response, St. Joseph’s argued that it cannot raise rents to a level where it can collect enough to be able to make needed repairs and maintenance on its homes for rent.

Owners of house rentals in San Francisco may have to ready themselves for additional challenges to their rental investments after the Board of Supervisors in the city approved a proposal to extend eviction protection laws to rental homes and condos built after 1979, the year the rent control legislation was passed.

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.

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