The Season is Upon Us

t has truly been a privilege to serve you over the last 24 months. During the course of my administration, some of my major accomplishments include negotiating the merger with the San Fernando Valley Apartment Association into AAGLA. This solidified our status as one of the largest apartment owner trade organizations in the United States. Enhancing our overall financial strength, we refinanced AAGLA's long‑term debt with very favorable terms, and in a difficult debt market.

We also placed renewed emphasis on membership services and satisfaction, resulting in advances in our technology platform, website, and, mostimportantly, member satisfaction.

Nothing could have been accomplished had it not been for the support, hard work, and dedication of your Executive Vice President, Charles lsham, and his staff of professionals, who make your association run day-to-day.

Additionally, I would. like to thank the Board of Directors, especially the Committee Chairs, for their dedication and hard work. Your apartment association, founded in 1917, has represented your interests locally and in Sacramento, while providing you with cuttingedge educational opportunities and member services.

We have new operational and legislative issues that must be addressed in our ever-changing environment so that we can continue to grow and serve you effectively. However, without your continued financial support and dedication to your association, we will flounder. We must stand united if we are to continue to prosper as an industry.

Finally, William Dawson, our President-elect, will take over the helm beginning on January 1, 2009. I look forward to supporting our new President, as I know you do.

In closing, I want to wish you all a Safe, Happy and Healthy Holiday Season.

Déjà Vu

he savings and loan crisis of the 1980s and '90s was the failure of 747 savings and loan associations in the United States. The ultimate cost of that crisis was approximately $160 billion. About $125 billion (a pittance when compared to Congress's current $700-billion "Bailout" package for the usual suspects) of it was paid for by the U.S. taxpayer. That contributed to the large budget deficits of the early 1990s and to the 1990-91 recession.

In the 1960s, the government capped the interest rates that savings and loans could offer on their federally insured accounts. When interest rates soared in the early '80s, the S & Ls faced such difficulty in attracting money that the caps were removed. At the same time, many states relaxed the limits on the kinds, of investments that thrifts could then make (to put it mildly).

Deregulation transformed the industry overnight from relatively conservative residential lenders and deposit gatherers to an entirely new business model, apparently unfettered by regulatory oversight, that attracted large pools of deposits by offering higher rates, and then used this cash to move into new lines of business, including junk bonds and speculative real estate development with insured deposits. The party had started. You and I were not invited until the very end, and then only to pick up their sizable bar tab. Their lobbyists made sure of that.

In 1989, Congress created the Resolution Trust Corporation (RTC) to take over the assets of insolvent thrifts and dispose of them at liquidation prices.

The RTC closed or reorganized institutions holding assets of almost $400 billion. It did so by seizing the assets of troubled savings and loans and then reselling them at bargain prices to investors. At the peak in early 1990, there were 350 failed savings and loan institutions under the agency's control.

By 1995, the Savings & Loan crisis was more or less over. The agency was folded into the Federal Deposit Insurance Corporation.

John Kenneth Gaibraith (an influential Keynesian economist and a two‑time recipient of the Presidential Medal of Freedom) called it "the largest and costliest venture in public misfeasance, malfeasance and larceny of all time." I am sure he is turning over in his grave now at the terrible transgressions of those we elected and trusted to represent and protect the public interest.

VOTE YES ON PROPOSITION 11

n July, your Board of Directors endorsed the all-important redistricting reform initiative, now on the ballot as Proposition 11: California Voters FIRST. I recently sent a letter to Governor Schwarzenegger proudly announcing AAGLA's endorsement of the initiative and invited the Governor to speak at our upcoming Trade Show to share his passionate views and support for the measure.

Every 10 years, following the U.S. Census, the California Legislature redraws the district lines for Congress, and the California Senate, Assembly, and Board of Equalization. The Legislature holds open hearings in order to receive public input, but ultimately makes it decisions behind closed doors in formerly smoke‑filled rooms.

This system is flawed. Incumbents invariably redraw their own districts to benefit themselves and assure their victory in subsequent elections. This not only creates greater partisanship issues, but also works to the disadvantage of minority communities (as well as apartment owners).

Proposition 11 proposes an independent commission that would create more politically and demographically balanced districts. It will create an independent commission comprised of 14 people; five Democrats, five Republicans and four independents. This politically balanced commission will create districts that reflect our state's ethnic and gender diversity. It will be chosen among an original pool of 60 California registered voters. The new districts will comply with the U.S. Constitution and with the Voting Rights Act.

Districts will be geographically contiguous and will also respect community, city and county lines.

An incumbent's residence may not be considered and newly drawn districts may not protect them either. The final redistricting plan will be subject to referendum, after which the California Senate, Assembly, and Board of Equalization seats will be redrawn by the commission for the next redistricting in 2011.

Congressional seats will be drawn by the State Legislature following the same mapping criteria and requirements as the commission. The re‑drawn districts will provide a more balanced legislature and fairer representation for all, including apartment owners.

Stop the partisan gridlock in Sacramento and let's hold our representatives accountable, Vote YES on Proposition 11 See AAGLA's website (www.aagla.org.) for more information.

AAGLA — THE LAND OF OPPORTUNITY

Some of you may only think of AAGLA as a place to get up-to-date rental forms, like leases and 3-day notices, and tenant screening. Sure, we have all of that. However, that is only the tip of the iceberg. There are myriad other services and opportunities from which you can benefit on a number of different levels.

Attend our free Member Meetings in Los Angeles, Santa Monica, the San Fernando Valley, and Ventura County. They provide a forum to express your opinions to your AAGLA "Public Servants," to get the latest industry news, to win free prizes, and enjoy the company of fellow AAGLA members.

For example, last month we held our First Annual State Legislative Breakfast. The Master of Ceremonies was AAGLA's own State Lobbyist, Steve Carlson, and he did a terrific job, as always. Our featured guest speaker was Assembly Speaker Karen Bass, a fair legislator who will always give us a fair hearing on the issues. Many important local and state representatives came to our Legislative Breakfast and we had a terrific member turnout (See Charles’ Corner for more details). It was a great success and I hope you were there. If you missed it, a video recording of the event should be up on our website (www.aagla.org) soon.

Volunteer to help your association and fellow members. You can join Jim Clarke (our Local Government Relations Manager) at City Hall to show your support for our important owner initiatives and your opposition to unfair legislative developments, of which there are many. Remember, there is strength in numbers. Trust me. It makes a difference. Please contact Jim Clarke at 213-384-4131, or at jim@aagla.org.

All of AAGLA's directors started as members just like you. You might have an interest in learning more about serving your Apartment Association and the industry as a Director of AAGLA's Board of Directors member, or just by attending committee and board meetings from time to time.

The best way to determine your level of interest and appetite for involvement is to attend our committee and board meetings, held on the second Wednesday of each month (except August and December). The committee meetings begin at 10:30am and usually end just before the board meeting begins at approximately 5:00pm.

We provide lunch to those attending Los Angeles Government Relations Committee Meetings at 12:00pm and dinner to those attending Board of Directors' Meetings.

It is another great opportunity to meet fellow members, learn about the issues confronting our industry, and to serve.

In another vein, terrific seminars are offered every month through Yvonne Calderon, our Training and Placement Manager. Recently, AAGLA offered an L.A. Housing Department Property Management Training Program (offered both in English & Spanish), and a QuickBooks seminar for Property Management. We also offer an ongoing Resident Manager Training program. It's a great opportunity for those considering a new vocation, or for those just interested in sharpening their skills and staying on top of the complex legal landscape. We also provide a placement service for program graduates and owners alike.

Apartment Age is our monthly magazine. Skillfully assembled every month by Kevin Postema (our editor), it contains useful and interesting articles as well as advertising and a directory of advertisers and vendors of all kinds. Over the years, I have found the magazine to be an invaluable landlord resource.

Another important member resource is our great website (www.aagla.org). You can download and fill-in regularly updated legal forms; view and/or download recent copies of Apartment Age; learn about upcoming events and important issues facing our industry; and get a plethora of other useful information here. You can also get tenant screening on‑line most efficiently, and for less money. Call the office for information about that.

And don't forget about our Oct. 7 Trade Show. It should be a great one with terrific seminar speakers and a host of vendors on hand to answer your questions and save or make you money.

On a final note, all of you readers please, have a safe and enjoyable summer, and do your best to stay cool.

 "Debt Gone Wild"

 recently attended a conference addressing the subject of Structured Finance and thought it might be apropos to share with you some of the more pervasive themes as well as some of my thoughts. First, the conference themes.

Conference Themes

$ Massive Global deleveraging (top to bottom).

$ It's the debt stupid!

$ CMBS lenders were underwriting to securitization rather than writing to property fundamentals.

$ What will break the transaction "Log Jam"?

$ Pension funds are reducing their allocations to real estate and increasing their allocations to overseas exposure.

$ Hedge Funds will continue to increase their influence as major players in the real estate capital game.

$ Repricing of assets must occur before deal flow can pickup.

$ Most lenders have completely written off 2008.

$ It may take longer than expected for the excesses of the past to be flushed through the financial system.

$ Interest rates will rise in the intermediate term.

$ Fannie Mae and Freddie Mac should continue to provide liquidity to the multifamily industry: thereby, providing a higher degree of overall price stability.

My Thoughts

While the equity markets appear to have moved past some of the credit and economic issues, the real estate transaction market has not. I believe it is still too early to say that the economy is in the clear and that we will not see continued weakness going forward.

For deal flow to begin again, we will need more accommodating Capital Markets. Credit spreads have improved, but lending overall continues to be excessively tight.

Also, seller and buyer price expectations continue to be far apart. Numerous real estate brokers and investors I have spoken to have commented to me about deals being removed from the market and the wide discrepancies in valuations.

The outlook for market fundamentals is still unclear, and financing still remains difficult to obtain and is expensive, limiting buyer's willingness to extend themselves. At some point, the investors sitting on the sidelines will make the decision to come in, fearing they will miss the next upswing, similar to what we have seen in the public equity markets. While it will happen, that does not seem too imminent given higher borrowing costs and softer fundamentals.

I believe over the next 24-months there will be tremendous opportunities to create wealth for those with the necessary conviction, resources, and plain old luck. Meanwhile, stay tuned!

AAGLA is Hard at Work — Again, as Usual

s midyear approaches, I find myself reflecting upon our accomplishments from the beginning of my term as AAGLA President in January of 2007. We have successfully merged with the former Valley association, completed the sale of their former headquarters building in Van Nuys, refinanced the long-term debt secured by our headquarters building on Westmoreland Ave. in L.A., and begun the process of improving upon our membership and technology platforms.

I am proud of all we have accomplished to date. Nevertheless, we fell short of achieving all of the important goals that I outlined in my January 2007 Apartment Age column. You have my pledge to continue to improve upon an already good effort to date.

Your association (and I do mean "your" association) operates in an increasingly competitive environment. We must continue to strive to do a better job of delivering value to you for your hard-earned dollars and communicating effectively with you, our members. We cannot be successful without your help.

Our primary focus continues to be membership (growth and satisfaction) and our profit centers (advertising, tenant screening, seminars, etc.), which help to support our very successful political representation of apartment owners locally and in Sacramento.

Please send me your ideas and suggestions for improvement via email at jschulhofaagla.org  I promise to respond to you directly, or indirectly through a staff member if they are better qualified to address your questions and/or suggestions.

2008 Trade Show Scheduled

Please make a note of our upcoming Trade Show to be held at the Sportsman's Lodge on October 7. We have moved the show and seminars indoors by popular request to this historic and beautiful venue. Stay tuned for more on this exciting development in upcoming issues of the magazine.

Prop. 98 — The Final Push

Lastly, we also need every member to support the California Property Owners and Farmland Protection Act (CPOFPA), Prop. 98, a new proposed Constitutional Initiative measure. If passed by the voters, the CPOFPA will permanently phase out rent control laws in the State of California and protect you from unfair eminent domain takings by government.

In other words, the CPOFPA wipes out the "taking" of private property for the purpose of conferring your economic benefits on another private individual. Substantial funds are still needed to pass the most important initiative we've seen since Proposition 13. Let's make history together. Please help us with your votes and your dollars. And don't forget to vote No on Prop. 99. It's important.

This important Constitutional Initiative can change the face of our industry forever. Please help us support and pass CPOFPA. Thank You.

April is Fair Housing Month — Nationally and in California

iscrimination in housing was outlawed four decades ago when Congress passed, and the President signed, the Fair Housing Act of 1968. If you discriminate against race, color, national origin, sex (including sexual predators under state law), family status, or disability, you violate federal law.

A property owner or agent cannot refuse to sell or rent to an individual who is a member of one of the above‑listed protected classes when anyone makes an offer to buy or rent real estate.

You also cannot charge a higher security deposit or change the terms of a lease depending on family status, or charge higher application fees

based on race. Of course you cannot lie on the availability of a unit, whether for rent or for sale. A landlord must also set reasonable non‑discriminatory terms for an applicant with disabilities.

The State of California also provides fair housing protection through the California Department of Fair Employment and Housing. Complaints can be lodged at 1800-884-1684 during regular business hours, or to obtain an interview with a state investigator.

Phyllis Cheng is the director of California's Department of Fair Employment and Housing. Her department uses an automatic on‑line system to receive complaints. Prior to accepting her appointment by Governor Arnold Schwarzenegger in January 2008, Cheng was counsel in the Los Angeles offices of Littler Mendelson.

In conclusion, AAGLA has supported and promoted fair housing for decades, well before 1968. It's the right thing to do, and it makes good business sense, too.

Vote Yes on Prop. 98

Finally, don't forget to vote Yes on Prop. 98, the property rights initiative. It's just as important that you vote No on Prop. 99 (the fake property rights initiative).

Too Little, Too late

espite the fact that the Federal Reserve Bank just completed an unprecedented 125-basis-point reduction of the Federal Funds Rate within a single month (the interest rate charged by banks with excess reserves at the Federal Reserve District Bank to banks needing overnight loans to meet reserve requirements), a recent survey of banks showed they are much more stringent in their extension of credit.

That is an important distinction because you and I cannot borrow money from the Federal Reserve Bank. As a result, how much credit the Fed provides, and at what price, impacts us only indirectly. It takes a bank to make that loan to pay for our house, or our apartment building purchase or refinance.

Since the beginning of 2006, over 200 major U.S. lending operations have collapsed, leaving a huge void in their wake for those seeking less than “AAA” quality residential or commercial loans. Meanwhile, foreclosures are soaring as home prices tumble.

In past downturns, the last obligation you abandoned was your home loan. Today, many borrowers appear to have little reservation about just "walking away" if they are upside down (have no or negative equity). This marks a significant change in the mentality of Americans as it relates to their financial obligations and may affect the availability and pricing of credit in the future.

Lenders are looking for a greater margin of safety today and, thus, are much less willing to make what they perceive to be marginally risky loans. Therefore, the Fed's rate cuts may provide far less help to our slowing economy this time around.

Happy New Year!

e begin the New Year a bigger, stronger, and better organization overall. We completed the merger with the Apartment Association of San Fernando Valley/Ventura County, emerging as one of the largest apartment trade associations in the United States.

We also have strengthened our balance sheet as a result of the merger and the restructuring of our long-term debt. On the member service side, we have made tremendous strides in membership services with an expanded and improved website as well as enhancements across the board in all membership service areas.

Politically, we have strengthened our political relationships over the last year, better enabling us to achieve our tactical and strategic objectives locally and statewide.

Finally, in 2008 we shall begin to see the fruits of our labor with respect to our merger as we achieve greater economies of scale and increased income due to our larger membership base.

It is no surprise that the coming year will be full of new challenges. The business landscape has become much more competitive than in the past. AAGLA is a mutual-benefit corporation owned by the members (That's You) and operated solely for your benefit. Our competitors offer some of the same services that we do, and sometimes at marginally lower costs (but not very often). However, like Exxon and General Electric, their mandate is to maximize profits and only that.

Your association spent well over a half a million dollars over the past five years in the political arena alone (which includes support for fair‑minded legislators' political campaigns and our lobbyists).

Supporting our lobbyists and friends in elected office is very expensive. Without their political influence and representation locally and statewide, you could be laboring under punitive and tyrannical legislation, depriving you of your basic rights, profits, and even your property.

If we are to continue to support and represent you effectively, we must have your commitment and support through your donations to our Political Action Committee (AAGLA PAC), payment of your annual membership dues, and use of our member services and programs, such as tenant screening. Please make the same commitment to AAGLA that AAGLA has made to you for the last 90 years. I promise you that with your support we can and will make a difference.

I would like to offer my congratulations to Trevor Grimm, the HJTA, AAGLA and everyone else involved in raising $2 million, collecting 1.1 million signatures, and qualifying the California Property Owners and Farmland Protection Act (CPOFPA) for the June 2008 Ballot.

The ballot measure offers sound reforms that specifically prohibit government from taking private property from unwilling sellers for non-public purposes (such as building a strip shopping mall that nobody needs). The most significant aspect of this measure for apartment owners is permanent vacancy decontrol, eliminating rent control over time. We must support CPOFPA with our votes and our money. If we don't, the bad guys will win again.

In other news, our 90th Installation Dinner was a huge success thanks to Charles Isham and his dedicated staff. We had a terrific turnout this year, particularly from the political spectrum, where new and old friends alike supported one of our most important traditions.

My many thanks go out to Harold Greenberg (Chairman of the Los Angeles Government Relations Committee and Past President), Richard L. Otterstrom (Vice Chairman of LAGRC), Jim Clarke, Local Government Relations Manager, Steve Carlson, Sacramento Lobbyist, and the many others who have worked tirelessly to forge these all important relationships locally and in Sacramento. Lainy Parry was this year's recipient of the 2007 Presidential Leadership Award in recognition of the tremendous work she has done collaborating with the City of Santa Monica to serve landlords and tenants alike.

This year, we shall focus on membership growth; improving communication with our members and the community at large; further expanding and improving membership services; seeking out strategic partnerships and acquisition opportunities; growing profitability and our balance sheet; continuing to expand our political influence and PAC; and providing all the support we can to help pass the California Property Owners and Farmland Protection Act on the June 2008 Ballot. Best wishes for a happy, healthy, and prosperous New Year!

Year-End Wrap-Up

t's hard to believe that this year is almost over, but it is. I have had a great experience serving as your President for 2007, and I look forward to one more year. Looking back, I feel extremely satisfied that AAGLA has made considerable progress this year.

At the beginning of the year, I wrote about things that I hoped we could accomplish, including expanded member services, long-term financial stability, and better member programs. I think we've done pretty well. Now, let's look at what's new and different at AAGLA.

Our biggest achievement was the smooth and successful merger with the Apartment Association San Fernando Valley/Ventura County. Last August, we welcomed over 700 new members to the AAGLA ranks. With the merger came other assets, including property that will aid in the future financial security that a not-for-profit trade association needs in order to keep membership dues lower for you. More importantly, this union makes AAGLA one of the largest rental property trade associations in the country — certainly, the largest "local" apartment association.

The AAGLA website has been over-hauled and enhanced tremendously. We are now receiving close to 200,000 user "hits" each month. Advertising is being displayed on the non-member home page, providing an additional opportunity for vendors and an added revenue stream for the association.

Our member billing system has also been upgraded to work more efficiently. The new invoices are easier to read and return with your payment. They also have the capability to include time-sensitive news and messages about upcoming events and programs.

In other news, AAGLA is becoming even more of a powerhouse in the rental property industry. The AAGLA Political Action Committee has tripled the amount of money raised and contributed in each election cycle. We have gained sorely-needed, additional influence with state legislators; not only in the L.A. area, but now we are also in Ventura County. And, our influence extends outside Southern California to Sacramento as well. As a very well-known and respected group at the city and county levels of government, we have achieved much this year (see Jim Clarke's webpage).

These are just a few of the many accomplishments that have been made this year, and you, our valued members, can be proud. It is you we listen to and represent to the best of our ability. Our direction comes from you. So, thank you for that and for your continuing support.

With 2008 just around the corner, we are gearing up for a very exciting new year. I intend to continue in the same direction and will bring you more details of our 2008 plans in my inaugural article in January. With that, I would like to wish you all a happy holiday season and a very prosperous new year.

Musings About Investment Risk

hile my articles usually relate exclusively to AAGLA, this month I thought I would touch upon the topic of risk. The U.S. Mortgage Market is under enormous stress as lender bankruptcies, hedge fund failures, and rising foreclosures have kept many of us captivated and anxious over the last several months. The events of the recent past underscore the failure of the mortgage industry to anticipate and adapt to external market forces.

I sometimes wonder if we (i.e., apartment investors) are not overly sanguine about the potential external risks to our property valuations and cash flows. I remember the painful lesson learned while a commercial lender in the mid‑90s in the Los Angeles area. I still have vivid recollections of my conversations with senior management pertaining to our collective assessment of the bank's overall downside risk in the event of a regional recession. We believed that California's underlying fundamentals were so strong that our economy was impervious to a substantial economic downturn and there fore we estimated our downside to be no more than 5% to 15% of current valuations: however, contrary to our risk assessment, values fell up to 60% of our original appraisals.

Could we only have anticipated the confluence of events to follow our meeting and sought risk mitigation actions to alter the outcome? The collapse of the Savings & Loan industry (and the government's improvident liquidation of real estate assets which was to follow), the end of the "Cold War" (and the subsequent collapse of the Southern California defense industry), the 1992 Los Angeles Riots, 1994 Northridge Earthquake, and the severe economic malaise which paralyzed our industry were devastating to investors and lenders alike.

Today we all have good reason to be thankful for the strong apartment property fundamentals we currently enjoy. A Housing Affordability Index in the mid‑teens, strong employment, population growth, and supply side constraints have afforded owners substantial rent growth and high occupancies over the last few years.

What might upset the "Apple Cart"? A severe recession, a catastrophe (e.g., an earthquake or an act of terrorism) resulting in a significant uninsured or underinsured property losses, the implementation of an immigration bill resulting in the wholesale deportation of illegal immigrants residing in the Southern California region, a severe contraction of the credit market, punitive rent control legislation, etc.

My purpose is not to create anxiety about the future but simply to provoke thought and to recommend that all of us review our investment portfolios from time‑to‑time to ensure an appropriate level of diversification across different asset classes (i.e., real estate, bonds, stocks, etc.) as well as

the practice of risk mitigation where possible. Think about it.

AAGLA Is Now Bigger and Better Than Ever

 would like to thank all of you who participated in AAGLA's historic Special Meeting and the vote to approve the AAGLN AASFV/VC merger on July 19, 2007.

As promised, those of you who participated in the special meeting were immortalized on the September cover of Apartment Age magazine. We emerge from this union not only as the largest local apartment trade association in the United States, but as a more politically potent representative of our members with significantly more resources to provide necessary services and representation.

The integration of the two trade organizations is well underway and is under the capable leadership of our Executive Vice President, Charles A. Isham. Our staff and Board of Directors are delighted to welcome all of our new Valley members into the AAGLA family.

We look forward to providing all of our new members with an expanded suite of products and services as well as effective representation at city hall and in our state capital. If you haven't already gotten it, your membership information is on the way to you. Meanwhile, I encourage you to visit or contact by telephone

any of your conveniently-located AAGLA offices with any questions or comments you may have, or just to say hello to AAGLA’s courteous and helpful staff members, or to fellow AAGLA members. The telephone numbers and addresses of our offices are listed in the ABOUT AAGLA page.

AAGLA is owned by its members and operates exclusively for their benefit. Therefore, it is in your best interest to support AAGLA by using all of our services and product offerings. They include: Free Legal and Management Assistance, Low-cost Tenant Screening Services (protect your investment before it's too late), free operating and management forms, political representation in Sacramento and across L.A. County, our free monthly Apartment Age magazine, Manager Training and Placement, Special Saturday Morning and Monday Evening Member Meetings (with special guests), low‑cost Seminars, and Trade Shows, and much, much more.

We look forward to serving and meeting all of our new Valley members.

AAGLA Welcomes 800 New Members Aboard!

I am very pleased and excited to announce that the merger between the Apartment Association of San Fernando Valley/Ventura County and the Apartment Association of Greater Los Angeles is complete. The proposal passed unanimously with the required votes by each of the associations' separate memberships during the month of July. Our newly united association will keep the AAGLA name.

This accomplishment increases our organization's size by 800 members, making AAGLA the largest local apartment association in the United States. Our new members will benefit from better and faster service as well as improved legislative and political advocacy at the local and state levels.

With our expanded numbers, AAGLA will, in turn, gain more clout in city halls around Southern California and in the business community as a whole.

We are proud to welcome our new colleagues from the San Fernando Valley and Ventura County. I look forward to meeting many of you at our member meetings held on the second Saturday of each month at our Westmoreland Ave. headquarters office. See Charles Isham's article on page eight for more details about our new association. Again, welcome aboard!

President's Circle

Our new bigger association has the potential to be one of the most active business groups in Sacramento and around Southern California. Our Political Action Committee will also have the ability to grow both financially and influentially.

With that said, I would like to invite all AAGLA members, new and not‑so‑old, to join the 2007­2008 AAGLA President's Circle. This program, detailed in a recent member mailing, helps benefit AAGLA PAC and increases the power and voice of rental property owners locally and statewide. Your premium contribution comes with extra benefits, such as special recognition, free tenant screening certificates, free special events and more. For more information, please contact Jim Clarke at 213‑384‑4131.

Lastly, I would like to thank the members of AAGLA's Board of Directors who have seen fit to elect me to another term as your president in 2008. I am honored to serve and expect more great things to come. I will detail our objectives for 2008 in my January 2008 article.

OUR MOMENT IS NOW

0ur 2007 Trade Show, The Best in the West, was a big success. Over 900 members and friends spent the day with us and left the show enlightened and entertained.

Sixty exhibitors and six seminar speakers spent the day educating AAGLA members about how to maximize rental income under challenging circumstances (and lots of other important topics). At the same time, our exhibitors were demonstrating their products and services to all who visited.

And it was all right next door to the fabulous Autry National Center. What a combination! The Autry National Center celebrates the American West through three important institutions: the Museum of the American West, the Southwest Museum of the Amencan Indian, and the Institute for the Study of the American West. Members and exhibitors attending the show were given free passes to the museum. Over 200 toured it and reported that it is both interesting and informative.

I believe this is the best venue to date for our Annual Trade Show. Next year's Trade Show will probably be scheduled in April or May to avoid the warmer weather. Please send us your comments and suggestions to further improve the show.

I want to thank AAGLA staffers Kevin Postema and Angela Sapien for all their hard work and a terrific show.

NEWEST AAGLA LAWSUIT FILED AGAINST L.A. Ciiy

On May 30, the Mayor of Los Angeles signed an ordinance into law that subjects new apartment units that are built on former rent-stabilized properties to one of two forms of "price (rent) control." This policy is a clear violation of the state Costa-Hawkins Rental Housing Act.

Thus, AAGLA and the California Apartment Law Information Foundation filed a lawsuit against the city last month on behalf of the entire membership.

Please help support this important challenge to the city's illegitimate attempt to further regulate our industry and reduce the value of our properties. Please help support this lawsuit with your checks.

CPOFPA EXPLAINED

Lastly, we also need every member to support the California Property Owners and Farmland Protection Act (CPOFPA), a new proposed Constitutional Initiative measure. If passed by the voters, the CPOFPA will permanently phase out rent control laws in the State of California.

The CPOFPA wipes out the "taking" of private property for the purpose of conferring your economic benefits on another private individual. Over one million signatures are required to ensure that the measure obtains the required 763,789 valid signatures necessary to qualify it for the June 2008 ballot. Please help us with your signatures and your dollars.

This important Constitutional Initiative can change the face of our industry forever. Please help us support CPOFPA (click here for more details).

OUR MOMENT IS NOW

I asked the Board of Directors at our June 13, 2007, board meeting, to adopt and approve a two-part motion. I asked it to allow the merger of the Apartment Association of Greater Los Angeles (AAGLA) and the Apartment Association San Fernando Valley/Ventura County (AASFVNC), and to call a special meeting of membership for the sole purpose of voting on the subject merger. The surviving entity will be AAGLA. The special meeting will be held on July 19, 2007, at AAGLA's main office, located 621 S. Westmoreland Avenue, Los Angeles, California.

I am extremely excited and pleased at the pending merger of two great apartment associations that will emerge from this process as one (stronger and better able to serve their members). In fact, we will be the largest apartment association in the United States of America. Napoleon Bonaparte once said, "in war there is but one favorable moment; the great art is to seize it," our moment is now.

There are many benefits to the members of the merged entities.

As the largest and the best apartment association in the USA, we will increase our political clout and resources (i.e., PAC funds pay for lobbyists and lawsuits). The current members of AASFVNC will benefit from enhanced online services available at www.aagla.org, which include interactive legal forms allowing the user to personalize their forms with their entity name, tenant name, property address, rent amount, etc., and to print forms directly from our website.

There will also be cost savings achieved through greater economies of scale, which will allow us to better serve you. Finally, AAGLA's balance sheet will be strengthened, as well as numerous other benefits to all of you.

Lastly, I would like to thank Past Presidents Jerry Factor, Larry Cannizzaro, William Shaw, and Trevor Grimm, Executive Vice President Charles Isham, and others who invested their time and energy to bring this merger to fruition. Please support the proposed merger with your vote on July 19, 2007. We shall take a commemorative photograph after the vote is completed, and it will appear on the cover of the September issue of Apartment Age. This is your opportunity to become a part of AAGLA history. I shall look forward to seeing you at our Special Meeting.

SINK OR SWIM

Political representation is essential to the long‑term viability of our industry. Effective representation requires resources (PAC contributions to pay for lobbyists, advertising, etc.), your time, and your votes. There are simply more renters than landlords, so we must make every vote count.

Most recently, we found ourselves compromised again by the duplicitous actions of the Los Angeles City Council (See Jim Clarke's column).

The Condo Conversion Moratorium was traded for higher relocation fees for tenants displaced when the Ellis Act is used to convert a building to condos or for redevelopment (or so we thought).

In all of our conversations with our elected representatives, that was the deal. However, in the final draft of the City Council ordinance, mysteriously (because no one seems to know who inserted it???), some additional language was inserted. This new ordinance now includes "good-faith" relocation evictions as well.

If you are contemplating moving your 76-yearold mother into your duplex, it may cost you as much as $17,000. Thankfully, we have good fair-minded Council members like Bernard Parks (and others) who are fair and have the best interests of their constituents and the city at heart. He and Dennis Zine have promised to author "clean‑up" legislation in the near future.

Now, AAGLA is calling on you again. We need you to send your letters and e‑mails to your council members telling them of your outrage at their most recent trickery. You can find their email addresses, phone, and fax numbers on the net at www.lacity.org or by phone at 213‑485­2121. Also, contact the council members who serve on the Housing, Community & Economic Development Committee, Jan Perry, Ed Reyes, Herb Wesson, Eric Garcetti and Tony Cardenas.

From time-to-time, Jim Clarke, our local lobbyist, must also have your support at city hall. If you would like to volunteer, please contact him at jim@aagla.org or by phone at (213) 384­4131 ext. 335. On these occasions, transportation will be provided by AAGLA from our headquarters office.

We must speak with our votes and our money to protect our industry from the increasingly threatening voices of those who seek to unfairly regulate and deprive us of our property.  

AAGLA GOES TO THE CAPITAL

0n March 21, the California Housing Providers Coalition (CHPC) held its Annual Legislative Leadership Conference in your state capitol. CHPC is a coalition of six apartment associations from Garden Grove to Santa Barbara. AAGLA is, of course, the largest member of the coalition (in terms of membership) with the biggest lobbying budget.

CHPC communicates to policy makers the negative consequences of further regulation on an already overregulated industry. Proposed legislation is often wrongly based upon anomalous events at the potential expense of landlord and tenant alike. CHPC and their advocates work diligently to clarify and help solve perceived problems with our lawmakers to avoid unnecessary and potentially costly and destructive legislation.

AAGLA was well represented. I was accompanied on this one‑day capitol summit by AAGLA Vice Presidents Arnie Corlin and Earle Vaughan, Past Presidents Larry Cannizzaro and Irma Vargas (our State Committee Chair), and by Local Government Relations Vice Chair Richard Otterstorm. Jim Clarke (Manager, Government Relations), and Steve Carlson (State Legislative Advocate) also attended. (Read Steve’s articles under the menu “Government Issues, California).

In addition, the Foothill Apartment Association was represented by its President, Charles F. Dunn, the San Fernando/Ventura County Apartment Association was represented by its Past President, Joe Cobert, and the Santa Barbara Apartment Association was represented by its President, Thomas W. Sutphen and its Chief of Staff, Joan Brooks. We embarked upon our ambitious schedule of having meetings with 14 Assembly Members and eight Senators within 7 hours (Wow!!!).

We had many meaningful discussions with these state leaders, and I believe we effectively explained our point of view on some key legislative issues coming before the California State Legislature. Never forget that your Association, AAGLA, is working tirelessly to represent your interests everyday, whether it be in Santa Monica, Beverly Hills, Los Angeles, Sacramento, or in any of the myriad of other municipalities that we serve in L.A. County.

We met with the following elected representatives and/or their staff: Assemblywoman Laura Richardson (D-Long Beach), Assemblyman Mike Davis (D-Los Angeles), Senator Mark Ridley Thomas (D-Los Angeles), Assemblyman Ted Lieu (D-Torrance), Assemblyman Charles Calderon (D-Montebello), Assemblyman Sam Blakeslee (R-San Luis Obispo), Assemblyman Paul Krekorian (D-Glendale), Senator Alan Lowenthal (D-Long Beach), Assemblyman Edward Hernandez (D-West Covina), Senator Bob Margett (R-Glendora), Senator Tom McClintock (R-Thousand Oaks), Assemblyman Curren Price (D-Inglewood), Assemblyman Anthony Portantino (D-Pasadena), Assemblyman Kevin De Leon (D-Los Angeles), Assembly Member Audra Strickland (R-Westlake Village), Senator Abel Maldonado (R-Santa Barbara), Assemblyman Pedro Nava (D-Santa Barbara), Senator Jack Scott (D-Pasadena), Senator Ron Calderon (D-Montebello), Senator Alex Padilla (D-San Fernando Valley), Assemblyman Lloyd Levine (D-Van Nuys), and Assembly Majority Leader Karen Bass (D-Los Angeles).

If you want to communicate directly with your state legislators, about our. issues, or our position on them, contact Jim Clarke for their phone numbers and/or email addresses.

AAGLA PROTECTS YOU AGAIN!

0nce again, the Apartment Association of Greater Los Angeles (AAGLA) has headed off another threat to our industry. Many of you may not be aware of the behind-the-scenes activities that AAGLA staff, Directors and members frequently conduct on your behalf. Recently, we became aware of a proposal by staff members in the City of Beverly Hills that was akin to the unreasonable Systematic Code Enforcement Program in Los Angeles.

AAGLA troops rallied to stave off this threat. I joined immediate Past President Bill Shaw, AAGLA Manager of Government Relations Jim Clarke, AAGLA Directors including, Earle Vaughan, Jerry Factor, Bob Magid and Christian Frére, along with several AAGLA members affiliated with the Beverly Hills Property Owners Association, in quickly stepping up to the plate.

This dedicated working group acted aggressively to launch a grassroots campaign (see Jim Clarke's page) and meet with Beverly Hills staff, members of the City Council, and candidates running for office in the March municipal election, gathering commitments to substantially revise the proposal and/or utilize existing remedies available to tenants. While this proposal is still under review, I believe that the powers that be have seen the light and will permanently table this ill‑conceived policy.

The issue is not just about the livelihood of our members in Beverly Hills. It is emblematic of an ongoing fight to prevent the spread of intrusive and unfair laws everywhere that, in the long run, will adversely affect rental property owners and tenants alike.

Moreover, this is a great example of how AAGLA can rapidly and effectively mobilize its considerable resources. You too can play a role in our efforts by volunteering and supporting AAGLA's Political Action Committee, which enables us to vigorously fight or promote any proposed policy that might impact your pocketbook. If you have any questions or comments, please e‑mail me at jschulhof@aagla.org. 

Stay (Or Get) Involved and Make a Difference

With the first quarter of 2007 coming to a close, my focus is shifting to the next quarter and the balance of the year. Your Board Of Directors has an ambitious agenda for 2007, and we are working hard to deliver on our commitment to maximize member value.

In fact, just last month we had our first board retreat in many years. It yielded many good ideas including a renewed focus on public education on such controversial issues as rent control. There is no shortage of thought‑provoking headlines everyday in the news on such issues as the war in Iraq, China's dizzying economic growth, the USA's growing trade deficit, the housing bubble, the subprime mortgage debt bubble, declining consumer savings rates, and on and on and on.

I do not mean to overwhelm you with worrisome news because there certainly is a lot of it, so here is some good news The apartment market is well positioned for another strong year. Housing affordability has plummeted in most major markets like Los Angeles County, causing vacancies to decline and rents to rise.

Unfortunately, our good fortune does not escape the attention of our elected and appointed leaders statewide for very long, and they will quickly begin to work their regulatory mischief. Stage Left: Renters' rights advocates and some politicians. Stage Right: The Apartment Association of Greater Los Angeles. Your generous contributions to our PAC, and to your Association, provide us with the sorely needed ammunition to fight to protect your rights as landlords and property owners.

Your participation in AAGLA is essential to our vitality and long-term vision as a member‑owned membership organization. Please find listed below three opportunities for your direct participation in your Association.

Monthly Membership Meetings

Please attend the monthly Saturday Morning or Monday Evening Member Meetings, held in L.A. and Santa Monica, respectively. They are informative and provide a forum to share your ideas and meet other members as well as the officers and directors of your Association (see page 22 for details.) We also solicit volunteers to aid staff in special projects from time to time. Call James Clarke for more information about that.

Seminars

Please participate in some of the many low‑cost seminars offered by AAGLA, and provide us with new ideas for topics to be covered in the future. AAGLA's seminars are extremely informative and often necessary for you to gain the expertise that will allow you to operate your building more safely and profitably.

Committee Meetings

Please try to participate in some of our committee meetings, held on the second Wednesday of every month (except Aug. & Dec.) and beginning at 10:30 am. The committee schedule is posted on the internet and on page 22 in the magazine, or you can call Barbara at 213‑384‑4131, ext. 326, to request a copy of the schedule. It is at the committee level where ideas are formulated, problems are solved, and opportunities and challenges are identified. The committee level work is exciting and provides an excellent opportunity to meet AAGLA director and members.

Your continued support is essential to our long‑term success. By investing your time as well as your money in your Association, you help shape the environment in which we do business and the future of our industry.

AAGLA Board Looks Forward at Retreat

By the time you read this article, we (i.e., the Board of Directors and the Executive Vice President of AAGLA) will have participated in an executive retreat with the theme "2007 and Beyond." The purpose of our retreat was: threefold.

1. To identify challenges and opportunities in the near and long term.

2. To make certain as an association dedicated to serving its members that we are doing the best possible job we can.

3. To synthesize the aforementioned into a long-term strategic plan for the betterment of the membership.

In another vein, so that we can improve our ability to communicate effectively with you, please send us an email at aagla@aol with your name and membership number. It's that easy. Once your email address is in our data base, we can communicate with you quickly and efficiently, saving your association postage money, which can be redirected to further enhancing member services and our lobbying efforts on your behalf. More importantly, it allows us to keep you instantly abreast of cutting edge developments (political, legal, and otherwise).

In 2007, it is our goal to improve upon an already excellent membership benefits platform.

In conclusion, I would like to thank Bill Shaw for his dedication and service to AAGLA as a multi-term President, and James C. Fleck and Kevin B. Postema for their hard work in writing and publishing a book about our history, AAGLA The First 90 Years, which you may have already received through the mail. If not, you will be getting it soon. I hope you enjoy the book as much as I did. Special thanks also go to Shaw for the book. It was his idea and he provided the impetus for producing it.

We encourage you to get involved in your Association, whether it is committee participation, Saturday Morning Meetings, or volunteering for special projects. For more information about getting involved, please call Jim Clarke at 213-384-4134, Ext. 335.

Meet The President

On the evening of December 1, 2006, I was sworn in as the new President of the Apartment Association of Greater Los Angeles (AAGLA), replacing former President Bill Shaw. Association General Counsel Trevor Grimm served as our swearing in officer, spelling out my duties and obligations as your new President, and those of our new members on the Board of Directors. My wife, Kyoko, and three children, Tristan, Marika and Mark, joined me for the ceremony and inauguration, which took place at the Jonathan Club in downtown Los Angeles.

For the past 90 years, AAGLA has been dedicated to serving our members in an ever-changing environment fraught with both risks and great opportunities for those committed to the rental housing industry. The level of dedication and purpose exhibited by our staff and that of our members has been truly inspirational.

Over the next 12 months we'll be focusing our activities in three primary areas.

• Membership value through new and better member services.

• Long-term financial stability for AAGLA.

• Development of a long-term strategic plan.

I plan to focus primarily on improving our already excellent membership services programs.

First, we will improve access to information and products via the Internet. I would also like to develop new services and products. Some goals include the following.

• An affordable insurance program for our members.

• Easy internet access.

• Expanded offerings in Apartment Age magazine.

• New educational courses to keep every member on the cutting age of both technology and the complex regulatory environment we must navigate every day.

Second, I shall work closely with the relevant committees and with our Executive Vice­President, Charles Isham, to develop and improve existing profit centers within our organization to provide all the necessary resources in the political arena in both L.A. County and at the state level in Sacramento to support important projects as they develop.

Finally, from time to time, every organization must re-examine itself from the bottom up to ensure its financial strength, relevancy, and overall value to its membership. Therefore, I think it is incumbent upon our staff, your Board of Directors, and you, our members, to develop a long-term strategic perspective for the future viability and success of our association.

I want to thank all our members for their confidence in me that led to the Board of Directors elevating me to the top position on AAGLA's Board. I promise you I won't let you down. Look for good things to happen over the next 12 months.