Joseph Krist

Publisher

Publisher’s Note: The MuniCreditNews is taking a couple of weeks off for repairs to the publisher. We’ll be back in October.

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$475,000,000

Municipal Electric Authority Of Georgia

Plant Vogtle Units 3&4 Project M Bonds, Series 2019A

Moody’s: “A2” stable outlook
S&P: “A” negative outlook
Fitch: “BBB+” negative outlook

Right up front, we take the view that Fitch is right on this one. We completely understand the value that is put on the general obligation of the participants. But we see it as inconsistent that the market is so concerned  about the sanctity of special revenue bonds in a post Puerto Rico era but is wiling to hang it’s hat on the legals to support this credit.

The Votgle expansion is an economic sinkhole. Nuclear power right now is not viewed by the general public as green in terms of climate change. It is not even economic relative to its competitors. That may change but in the meantime the sunk costs of the expansion and increasing competitive forces pressuring large central utilities like MEAG will continue to weigh negatively on credits.

The reality is that MEAG management with support from politically conservative state officials were willing to bet their utilities credit that they could make nuclear power work. The issue isn’t whether nuclear is the most cost efficient (it’s not), whether its green (emission free is not the same as green), or whether it’s the best choice versus renewables or the dreaded “self-generation”. The issue is that nuclear power does not have a political constituency regardless of its technological merits.

Five pages of risk factors is a hint that this should be a credit that one should be compensated for owning. And this is where the value of the general obligation and the rating that is based on that  comes into play. If this is a revenue bond, than it should trade through its equivalent GO security. If it’s a GO than it should trade behind a revenue bond. That, however, is not what the ratings reflect.

NYC REAL ESTATE

New York is viewed as being at some sort of historic apex in its existence with a rising population and seemingly unstoppable growth in real estate values. It’s impossible to get around Manhattan without navigating a street or side walk narrowed or blocked by residential construction. It would seem to be the best of times.

A new survey has cast some light on the subject which just might alter that image.  A new analysis by the listing website StreetEasy estimates that of 16,200 condo units across 682 new buildings completed in New York City since 2013, one in four remain unsold. That’s roughly 4,100 apartments. Manhattan had the most unsold condos by far: Over 2,400 of the unsold units, about 60 percent, were in the borough, primarily in large luxury buildings.

This data comes at a time when the Manhattan retail vacancy rate has been a continuing concern. The two phenomena are not necessarily linked although efforts by developers to “manage ” their inventory make it difficult to know how much of the vacancies are due to soft demand or owners simply holding tight to their price demands.

This is all going on at a time when the City’s overall economy is still doing well.  There is some cause for concern that employment in the financial sector will soften in the fourth quarter. This will likely further hamper the recovery of the real estate market as these cuts will impact a significant target group of real estate buyers. it reflects the still significant contribution to the City economy made by the financial industry.

The data also shows how the current shape of the New York real estate market drives the issue of affordability. The study showed a number of buildings that have decent sales percentages but that also have high proportions of those units on the rental market. This makes it more likely that these owners are investors rather than buyers with long term interests in the neighborhoods and local economies which they would normally support.

Factors driving the data include the City’s “mansion tax” (up from a flat 1% on million-dollar sales up to 3.9% for sales above $25 million)on those units and the loss of the SALT deduction. The current atmosphere around immigration also impacts the desirability of the market to foreign investors who play a large role in the City’s residential property market.  

The impact from a downturn in  the real estate market directly on the City’s real estate tax base is fortunately tempered by the use of averages over time to determine taxable value. This reduces volatility of the tax base through both ups and downs. The impact of lower incomes and higher end employment would be more rapidly felt.

GM STRIKE

The last time there was a nationwide strike against one of the major US automakers was in 2007. The financial crisis hadn’t fully unfolded and GM was still a solvent entity. But that was as they say a long time ago in a galaxy far away. The industry stands at the center of the issue of transportation and technological change and faces significant choices about its direction. Now that uncertainty has spread into the realm of labor management.

That is the light in which we view the UAW announcement of a nationwide job action against GM. That would impact 46,000 GM autoworkers at 55 facilities in the United States.  In reality, the resolution of an agreement will be establishing a template for managing the impact of technological change on current jobs across the industry. A strike, if extended will be costly in terms of lost income and reduced economic activity. A UAW worker will get only $250 a week in strike wages. The union had $721 million in its strike fund in 2018 and temporarily increased dues in March this year to boost it to $850 million.

The strike is of interest because of the policy implications of what the workers ask for and achieve and how that stacks up against policy proposals from the Presidential campaign. Take health care. Research by the Ann Arbor-based Center for Automotive Research shows that an average UAW worker pays about 3% of his or her health care costs compared with 28% paid by the average U.S. worker. “Unallocated assembly plants” refers to GM’s decision announced last fall that it would indefinitely idle four of its U.S. plants. 

The resolutions reached over these issues are more than a local or state credit issue. They have real significance that will influence a variety of political actions and reactions in light of the “threat” of job losses to technology whether it be through lower overall vehicle production (one potential outcome) or shifts in production based on the adoption of electric versus internal combustion vehicles. It’s about much more than whether local sales tax bond coverages are lowering.

CYBERSECURITY GOES TO SCHOOL

The first days of class should be the most exciting of the school year as new teachers, students, and subjects get introduced to each other. In the case on one Arizona school district, events were something more than exciting.

A ransomware attack on the Flagstaff, AZ school district led officials to close school for a couple of days while they addressed issues associated with the attack. the district ultimately chose to close schools out of an abundance of caution. It wanted to verify the integrity of systems related to the district ultimately chose to close schools out of an abundance of caution. What it did not do was pay the ransom. The district manages its data and information technology on a distributed basis between itself and various third parties including Northern Arizona University   Coconino County and private vendors.

It is not clear how much but the District did have cyber security insurance. This will cover a portion of the remediation. The District is also allowed to use two of its budgeted five snow days to account for the two days the schools were closed. District management says the total financial cost will not be known for at least another month.

So hope fully there is something to learn from this school experience. We learned that the housing of data on a less concentrated basis may be safer than relying on one server or source. We learned that you can get cyber insurance. And we learned that a little financial flexibility (snow days in September) can go a long way as well. We also know that information like this does not necessarily compromise cyber security in and of itself. So why can’t investors get more of this? This incident could go a long way towards developing a disclosure template for municipal credits to follow.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Joseph Krist

Publisher

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SOUND TRANSIT FUNDING CHALLENGE

The Washington State Supreme Court will hear arguments on a challenge to the formula used to calculate the value of automobiles for the purpose of calculating the tax due to Sound Transit, the public transit agency in and around Seattle. Taxpayers who are plaintiffs in the lawsuit contend that the transit agency uses a formula that inflates the value of vehicles when it levies a motor vehicle excise tax. That value is used to establish the amount of what is known as the car tab.

Vehicle owners in urban parts of Pierce, King and Snohomish counties pay the tax through their annual vehicle registration, known as a car tab. The suit relies on an interpretation of procedural aspects of how a law is enacted. One provision says no law shall be revised or amended by mere reference to its title. The revised or amended law must be laid out “at full length.” The plaintiffs contend that this did not occur.

They seek the return of hundreds of millions of dollars collected from taxpayers since Puget Sound area voters approved the car-tab tax rate increase in 2016. Sound Transit also must be prohibited from collecting that tax in the future, unless the Legislature votes again on the matter. The car tab dates back to 1990, when the Legislature approved a new valuation schedule for the statewide car-tab tax that had been levied for decades. It overvalued the worth of a vehicle to raise more revenue for transportation projects.

Six years later, the Legislature enacted a law which authorized Sound Transit to collect a car-tab tax. Voters that year approved a 0.3 % car-tab tax to help pay for light-rail projects. Sound Transit used the state’s valuation schedule adopted in 1990. Opposition continued and in 2002, voters statewide approved Initiative 776, which repealed the state law authorizing locally imposed car-tab taxes, Sound Transit’s car-tab tax and the valuation schedule it used.

That initiative was overturned in the Washington Supreme Court in 2006. The Legislature then the Legislature approved a bill authorizing local governments to create regional transportation districts to build roads, in part through car-tab taxes. Four years ago, a bill passed giving Sound Transit authority for a voter-approved car-tab tax not to exceed 0.8 % — on top of the 0.3 % approved in 1996 — for a total of 1.1 % of the vehicle’s value. That bill did not use the schedule with the lower values for vehicles that lawmakers approved in 2006. That formula would have meant less revenue for Sound Transit.

The bill said the higher valuation schedule that Sound Transit had used since it began to collect car-tab taxes in 1997 temporarily would be in effect until its 30-year bond debt incurred in 1999 for light-rail projects is retired. The transit agency has said that will happen in 2028, when its 0.3 per cent car-tab tax is set to end. Voters will already get a chance to vote on transit funding. Initiative 976 would cap car-tab taxes at $30 and also would reduce several other transportation taxes. It has the same sponsor as did the previous failed initiatives to defund public transit.

NYC SPENDING

Two recent reports from New York’s Citizens Budget Commission shed light on spending practices by NYC under Mayor Bill DeBlasio. One highlights the City’s use of leasing to acquire much of its office space. CBC estimates that New York City government leases 22 million square feet (of an estimated 37 million square foot real estate portfolio) from private owners.1 Most leased space houses agency offices (13.5 million square feet), but the City also leases space for public services ranging from schools and day care centers to warehouses, tow pounds, and courts.

In fiscal year 2018 New York City spent more than $1.1 billion to lease space for public facilities and offices—an amount that has grown 40 percent since fiscal year 2014, far greater than the 20 % increase in the City budget, the 12 % increase in asking rents for office space, and the 10 % increase in the number of full-time City employees.  The City Charter requires the Department of Citywide Administrative Services (DCAS) to maintain a list of leased and owned space; however, DCAS does not publish lease-level data on how much space the City leases, how much each lease costs, or how efficiently agencies use their space. 

Leasing has been on the increase since 2009 under the Bloomberg administration but it accelerated at the start of the de Blasio administration. The City does not publish a complete record of leases and space use that includes each lease’s costs, square footage, and occupancy. DCAS only publishes data on the locations of buildings where the City leases space and the agencies located at each property.

At least some effort was made in the prior administration to address the concern over long term leasing by the City. The Bloomberg Administration launched the Office Space Reduction program to reduce the size of the City’s office portfolio by 1.2 million square feet. Through fiscal year 2012 the program reduced occupied office space by 400,000 square feet and saved $15 million in annual rent expenses and $4 million in energy costs.9 The average square footage occupied per employee declined 8.6 percent from a high of 280 square feet in fiscal year 2012 to 256 by 2016. The program was not renewed for fiscal 2017.

The real estate management issue joins several others as sources of opacity and a lack of accountability. The City can’t provide data on the efficacy of its tax incentive plans, it can’t (or won’t) account for spending under the billion dollar Thrive NY mental health program (run by the Mayor’s wife), and current real estate management initiatives did not set reduction targets and did not report metrics, such as square footage per employee, to track progress.

ALASKANS PAYING FOR THIS YEAR’S BUDGET

A new governor has undertaken an aggressive ideologically based approach to the management of the State’s finances. The most prominent example is the gutting of the University of Alaska’s budget which is resulting in the elimination of tenured faculty under financial exigency rules. That was not necessarily something that people explicitly voted for.

Now one of the main cogs in the State’s transportation system has been shown to be a target of the cuts. The Alaska Marine Highway System, (AMHS), released its winter schedule with fewer sailings and a new pricing system. The changes also include the use of dynamic pricing. This is a much loathed system of raising and lowering ticket prices based on perceived demand. The most visible examples are its use by airlines and sports teams.

The State Transportation Department has said “we had to reduce our service by one-third because we just don’t have, we don’t have funding.” The cut was just over $43 million. It means that some communities will lose ferry service for six months. Passenger fares could climb by as much as 30% while vehicle and cabin rates could rise as much as 50% on heavily booked sailings.

We are not talking about minimal expenses for passengers. A passenger going from Haines to Bellingham, Washington can expect a base fare of about $500. But that could increase to nearly $650 if the ship fills up. Fees will increase for changes or cancellations close to travel dates while fares will increase 10% for the days preceding and after special events. 

There are communities which rely on the ferries for access to the mainland and at least one of them will lose service altogether. It is hard to see how this helps the Alaska economy, all in the name of raising the oil dividend. Except the dividend was not raised and remains at $1600. Putting political views aside what the math says is that if you live in one of the communities which is losing its winter ferry service, you lose access to the outside economy and other opportunities, your life gets much more inconvenient and expensive, and you do get $1400 to help you out even all of the cuts were supposed to get you the $1400. It makes no sense.

SCHOOL BUILDING COSTS IN THE AGE OF GUNS

The opening of the school year has been the occasion for several school facilities to be opened and publicized in an effort by both administrators and industrial interests to show off the latest in school building technology. It is hard in the current environment to criticize any effort to promote the safety of school children. I write this as a parent of a public school graduate and the spouse of an inner city teacher in both public and private schools.

Whenever new the technology has an opportunity to be introduced and profited from it will occur. In the wake of the Sandy Hook and Parkland incidents, significant efforts have been made on the part of vendors to have their ;products employed in an effort to provide security in schools. Whether it be surveillance equipment, reinforced materials, designers, or other technology vendors. As the chair of the Partner Alliance for Safer Schools, or PASS has said, “When you have an active shooter situation, I guarantee in the first couple days your inbox is going to have solutions from companies trying to market their technology.”

One school in western New York state is even employing facial recognition technology in spite of the global controversy over its uses and technological shortcomings. The trend of school districts being overwhelmed by vendors is reminiscent of the introduction of computers into classrooms.  A whole industry has grown up around products including biometric screening, outdoor lighting optimized for video surveillance, and audio analytics .

The real capital expense comes with school renovation and construction. A discrete approach to architectural design for schools has developed. In Fruitport, Michigan, a newly renovated high school will be “the safest, most secure building in the state of Michigan,” according to a district superintendant. It reflects a current trend with limited sightlines, wing-wall protrusions for students to hide behind, and an all-seeing reception desk the architect calls an “educational entry panopticon.”  The school features bulletproof glass and other reinforcements. It also costs $48 million.

In Indiana, one school is fitted out with  strobes and horns are installed throughout the hallways and in every classroom for instant alert.  Teachers wear “panic buttons” which can activate the system. each classroom features a hardened door system that will withstand an attack by pistol, rifle, shot gun and followed with using the butt of the shotgun to attempt to knock the vision window out.  This door automatically locks when closed. If it sounds like a modern prison, that maybe because the design firm also designs prisons.

No one is saying that students and teachers shouldn’t be safe at school. The question is are these large expenditures being undertaken because they are effective or has what’s been effective is the marketing by the security industrial complex.

PREPA RESTRUCTURING MOVES CLOSER

The president of the fiscal control board overseeing Puerto Rico’s attempts to restructure its debt announced an agreement with the bond insurers Syncora Guarantee, Inc. and National Public Finance Guarantee Corp. to join the Restructuring Agreement (RSA), which was achieved earlier this year with several holders of PREPA and Assured Guaranty Corp. The agreement now accounts for 90 percent of the uninsured bondholders and all PREPA bond insurers.

Holdouts remain and they stand in the way of a conclusion to the deal. It remains however, an important step in that one less institutional block is an obstacle.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Joseph Krist

Publisher

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JUNK LAWSUIT AGAINST ILLINOIS DEBT REJECTED

On Aug. 29, Sangamon County IL Associate Judge Jack D. Davis II denied a request by individual plaintiff John Tillman together with Warlander Asset Management LP, (the money behind the case) to file suit to block the state from continuing to pay off $14 billion in “structural debt” bonds issued in 2003 and 2017. The complaint sought to argue the state violated Section 9 by failing to identify a “specific purpose” for the debt when issuing the bonds at question in the case.

The lawsuit named as defendants Gov. JB Pritzker, state treasurer Michael Frerichs and state comptroller Susana Mendoza. None of them were in office when the bonds were issued. The judge found “the legislation stated with reasonable detail the specific purposes for the issuance of the bonds and assumption of the debt as well as the objectives to be accomplished by enactment of the legislation.” “Despite Tillman striving mightily to do so, he cannot ignore the plain language of the statutes in question,” the judge wrote. “Tillman’s proposed Complaint is chock-full of conclusory and argumentative statements describing the financial condition of the state that are irrelevant and which the court must disregard. Indeed, it resembles far more of a political stump speech than it does a legal pleading.”

The judge went further declaring that allowing lawsuit to proceed would “result in an unjustified interference with the application of public funds” and would lead to a court substituting its interpretation of the constitution for the will of the General Assembly and other elected officials, which the judge said was a “non-justiciable political question.” None of this is surprising. It has also been alleged that Warlander Asset Management LP was hoping to profit from a short position if the lawsuit succeeds.

It is a reflection of how continually annoying it is to hear how non-traditional investors keep trying to bring their “better way” of trading and investing to the municipal bond market. These aren’t corporate entities you’re messing with they are providers of public goods which by their very nature are often essential. Junk lawsuits to facilitate a short are one “improvement” this industry can do without.

CALIFORNIA REVENUES

After finishing fiscal year 2018-19 above the 2019-20 Budget Act forecast by $1.041 billion, preliminary General Fund agency cash for July, the first month of the 2019-20 fiscal year, was $533 million above the 2019-20 Budget Act forecast of $7.794 billion.  Personal income tax revenues for July were $364 million above the month’s forecast of $5.403 billion. Withholding receipts were $353 million above the forecast of $5.06 billion. Other receipts were $11 million higher than the forecast of $762 million. Refunds issued in July were $7 million lower than the expected $322 million.

Proposition 63 requires that 1.76 percent of total monthly personal income tax collections be transferred to the Mental Health Services Fund (MHSF). The amount transferred to the MHSF in July was $7 million higher than the forecast of $97 million.  Sales and use tax receipts for July were $25 million above the month’s forecast of $1.732 billion. July is the firstn month of the 2019-20 fiscal year and includes the final payment for second quarter taxable sales, which was due July 31.  Corporation tax revenues for July were $119 million above the month’s forecast of $357 million.

 Estimated payments were $146 million above the forecast of $290 million, and other payments were $63 million lower than the $162 million forecast. Total refunds for the month were $36 million lower than the forecast of $95 million.  Insurance tax cash receipts for July were $4 million above the month’s forecast of $22 million. Cash receipts fromn alcoholic beverage taxes, tobacco taxes, and pooled money interest were $15 million above the month’s forecast of $100 million. “Other” revenues were $6 million above the month’s forecast of $180 million.

STATE SELLING RAIL LINES

It is easy to forget that there was a long history of government participation in the local economy dating back to the early 1900’s. Cooperative farming entities and a strong mistrust of national institutions supported the notion that the state could have a role in directly supporting farm economies by providing access to markets. Long before the introduction of automobiles and the development of a serious road system, the primary source of transport for people and goods between markets was the railroad.

In reflection of that tradition, the approximately 533 miles for sale were purchased by the state four decades ago when railroad giant Milwaukee Road went bankrupt. Some lines were purchased and restored to service by other railroads once Milwaukee Road went under, but the state purchased the remaining essential lines that were not sold privately. The state is now looking for prospective buyers to take the rails off its hands with the ultimate goal of returning the rails to private sector ownership to boost traffic, tax revenues and job creation.

A total of six lines are for sale, and prospective buyers can propose to purchase a single line, combination of lines or portion of a line to the board. The longest stretch of rail for sale is the MRC Line, running 285 miles from Mitchell to Rapid City.  The segments are operated by different operators under leases and subleases. Any sale will need to be approved by the state railroad board, the Governor, and the federal Surface Transportation Board.

ROADS TO NOWHERE

For years, development proponents have supported state financed road building as a tool to support their projects. The relationship between roads and development is well established. In the municipal bond market, the experience with toll road development projects which were ultimately designed to generate new development has been mixed at best. Failed projects linked to development have been experienced in Colorado, Virginia, Florida, and South Carolina.

Now in spite of those experiences, the forces behind road development are taking another stab at things. For years, Florida governors and legislators have been loath to approve a major expansion of toll roads throughout the State. Development supporters have championed an effort to undertake major expansions (300 miles) of roads to generate development. The latest iteration of the would extend the Suncoast Parkway to Jefferson County, another would extend Florida’s Turnpike to the Suncoast Parkway up to the Georgia border and a third would build an entirely new toll road from Polk County to Collier County.

There is only one small problem with the effort. It apparently does not have support from any of the major non-real estate constituencies which would be impacted. These include elected representatives from four of the counties to be impacted as well as the Florida Trucking Association (FTA). The FTA notes that existing Interstate 10 has wide swaths and many interchanges with “zero economic development.” State transportation officials acknowledged afterward that they have basic questions to answer about the proposed roads. The Department of Transportation does not have data showing the roads were needed.

And that brings us to the credit aspects of the proposal. Too many of them fail even in the presence of data purporting to show need. “There’s some obvious things we know we need to take a look at — the economic feasibility, the environmental impacts, that’s obvious,” a department spokeswoman said. In an age of data driven decision and policy making, this proposal fails to meet minimum tests of practicality. The access to information and data to the public should be driving government decision makers towards better processes for developing, permitting, and executing capital projects. This proposal fails that test.

CAN FREE MASS TRANSIT WORK?

A monthly pass good for riding anywhere in Kansas City, Mo., and its neighboring communities in Missouri and Kansas costs $50 on the regional bus system. A daily ticket costs $3. That doesn’t seem to be too much but ridership tells a different story. On the buses, most run below capacity even at rush hour. On the other hand, the light rail system is looking at expansion to reflect high demand. And the light rail is free.

The Kansas City Area Transportation Authority has been willing to test out a variety of pricing approaches in an effort to boost utilization. Veterans now ride free, as do many K-12 and college students. Partnerships with businesses and local safety-net providers allow them to distribute free rides to their clients. In all, about 25 percent of KCATA riders don’t pay to ride.  

The light rail service which operates in downtown KC has a much better utilization rate. It is also free with operating costs covered through sales and property taxes levied in a special taxing district that extends for about a half-mile on either side of its route. As for the bus system, $8 million a year out of the KCATA’s $105 million operating budget is generated by fares. The city of KC, MO already collects two sales taxes that benefit transit, though not all of those funds are directed toward KCATA. About $2 million per year goes to the streetcar, and somewhere between $3–4 million goes to the city’s public works department. So right there is $6 out of the $8 million in potential “lost fares”.

Making up the remainder from other sources would seem to be feasible. The City of KC, MO already directs $17 million from the city’s general fund to subsidize parking garages. There is also the potential for more revenue from an expansion of light rail and the expansion of sales tax zones to fund the expansion as is the case with existing lines. There could be operational savings from the elimination of duplicative bus service along new light rail routes.

Were the KCATA to eliminate fares across the board, that would make Kansas City the first major city in the country—a few small college and resort towns have already done it—with a free transit system. 

RENT CONTROL IN CALIFORNIA

One clearly emerging trend in state legislature since 2019 has been their willingness to legislate solutions to the issue of housing costs and rents in particular. Under an agreement announced by Gov. Gavin Newsom and legislative leaders, Assembly Bill 1482, would limit rent increases statewide to 5% plus inflation per year for the next decade. The law would also include a provision to prevent some evictions without landlords first providing a reason.

Enactment is however, not a sure thing. The bill is a more stringent version of proposed legislation on the subject. The California Assn. of Realtors, a major source of lobbying influence at the Capitol, had agreed not to oppose a weaker version of the legislation that would have capped rents at a higher percentage for a shorter time. The organization said after the deal was announced that it would lobby lawmakers to vote against the bill. At the same time, the California Apartment Assn., which represents landlords in the state, notes that the announced deal includes an agreement by the organization to no longer do so.

The proposed rent caps have yet to be formally incorporated into the bill, would not apply to properties built in the last 15 years, nor would they apply to single-family home rentals unless they were owned by large corporations. It would not affect existing  rent control regulations, such as those in Los Angeles and San Francisco. The bill would extend caps to apartments in those cities not covered by the existing local measures.

The bill’s anti-eviction protections, which would limit evictions to lease violations or require relocation assistance, would take effect after a tenant has lived in an apartment for a year. A bill must be voted on by September 13.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.