State Farm and Allstate's Decision: The Impact of Ceasing New Property Insurance Policies in California

California Water Restrictions

In 2018, Brown signed AB 1668 and SB 606, which set water efficiency standards for utilities to follow in the decades to come. The bills say indoor water use needs to be reduced to an average of 55 gallons per person per day by 2023, declining to 50 gallons by 2030.

The average American’s eight-minute shower uses 17 gallons. An old top-loading washer will use approximately 40 to 45 gallons, while modern high-efficiency models only use 14 to 25 gallons, according to the Alliance for Water Efficiency.

But those are just general targets water districts will have to meet across their ratepayer bases, as part of a broader “water budget” strategy that accounts for both indoor and outdoor use. Water districts — not individual customers — could be fined if they don’t hit the targets.

Over the next two years, state regulators in consultation with local water agencies will set limits on how much water can be used to water lawns and landscaping and fill swimming pools. Outdoor use accounts for the majority of the total residential consumption in much of California.

The outdoor standards will vary greatly from one district to the next. The legislation allows for places such as Sacramento with large yards and hot, dry summers to use more water outdoors than in cooler coastal regions.

The new rules also encourage water providers to replace leaky infrastructure. Ancient pipes and crumbling water mains account for millions of gallons of wasted water statewide.

The idea behind the legislation is that all those factors — the indoor standards, the limits on outdoor water use, making water systems more efficient — will be built into a utility’s goals across a ratepayer base.

By 2027, local water agencies will have to meet these goals or theoretically could get fined by the state up to $1,000 per day or $10,000 per day during an official drought emergency.

Individual ratepayers, however, wouldn’t get any fines issued by the state. The utility would. Of course, individual ratepayers could see higher water bills as a result. 

SB 606 does give local water agencies the authority to impose fines — and even 30-day jail terms — for individual water scofflaws. But the authority is limited to residents who violate local ordinances on water use during an official “water shortage emergency” that’s so severe it’s threatening “human consumption, sanitation, and fire protection,” according to SB 606. That has nothing to do with the state-imposed indoor and outdoor water budget standards currently being hashed out.

Residential Water Restrictions

• - Limits of 55 Gallons of water per person per unit
• - Fines of $1,000 if over the limit
• - Fines of $10,000 if over the limit in a drought period

Commercial Water Restrictions

• A reduction of 10% of water use by 2020 will apply to all commercial properties
• Certain restrictions for Water retailers

It's obvious that the State legislature is being overly protective about water concerns. After all, the simplier solution would be to collect the rain water that current runs into the ocean. Instead, property owners need to be very concerned about meeting these new requirements in order to avoid fines. 

The bill was also written in a way where the fines will be placed on the water utilty companies. This means the companies will automatically pass these fines to the property owners on their water bills. Ensure you are monitoring your water use with new technology or manually watching your use before you end up with unexpected large fine on your next water bill.

Maximizing Rental Revenue: The Importance of Increasing Rents When Legally Allowed

As a real estate property owner, it's essential to strike a balance between maintaining positive tenant relationships and maximizing rental revenue. One key aspect of achieving this balance is increasing rents when legally allowed. In this blog post, we will delve into the importance of timely rent increases, highlight negative consequences of neglecting them, discuss how rental increases enhance property value for investors, and emphasize the role of professional property management in maximizing rental revenue.

1. Negative Consequences of Avoiding Rent Increases: When rental rates remain stagnant for extended periods, property owners can experience several negative outcomes:

• Financial Strain: Insufficient rental income can limit your ability to cover property expenses, such as maintenance, repairs, and mortgage payments, potentially impacting your profitability.

• Deferred Upgrades: Without adequate funds generated through rental increases, it becomes challenging to invest in property improvements and upgrades, which are crucial for attracting quality tenants and maintaining property value.

• Inadequate Returns for Investors: Failing to adjust rents can result in diminished returns on investment, as rental income fails to keep pace with rising costs and market trends.

2. Enhancing Property Value for Investors: Regular and appropriate rent increases can significantly enhance the value of your property for investors:

• Attractive Cash Flow: Increasing rental income ensures a steady and reliable cash flow, making your property more appealing to investors seeking sustainable returns on their investment.

• Increased Property Value: A property generating higher rental income is generally perceived as more valuable in the market. Potential buyers and investors are willing to pay a premium for properties with a history of strong rental revenue.

• Better Financing Options: Lenders often consider the rental income generated by a property when evaluating loan applications. Higher rental revenue resulting from timely rent increases can help secure better financing terms for future real estate ventures.

3. Balancing Rental Increases and Tenant Retention: While rental increases are important, it is crucial to strike a balance to minimize tenant turnover and vacancies:

• Fair Market Rates: Setting rents at or slightly below the fair market value ensures competitive pricing while maximizing revenue. Excessive or unfair rent hikes can prompt tenants to seek more affordable alternatives, leading to higher turnover rates and extended vacancy periods.

• Tenant Communication: Open and transparent communication is key. Informing tenants about the reasons behind the rent increase and providing ample notice helps maintain a positive landlord-tenant relationship and fosters understanding of the value they receive in return.

4. The Role of Professional Property Management: To navigate the complexities of rent increases and optimize rental revenue, partnering with a professional property management company offers several advantages:

• Market Expertise: Property management professionals have in-depth knowledge of local rental markets, enabling them to conduct thorough market analyses and set appropriate rental rates.

• Tenant Retention Strategies: Experienced property managers employ effective tenant retention strategies, ensuring lease renewals, minimizing vacancies, and maximizing rental income.

• Timely Rent Reviews: Property management companies can stay abreast of legal requirements and perform regular rent reviews, recommending and implementing rent increases in accordance with applicable laws and regulations.

Conclusion: Increasing rents when legally allowed is essential for property owners to maintain financial viability, enhance property value for investors, and strike a balance between maximizing rental revenue and tenant retention. By implementing appropriate rent increases, you can ensure steady cash flow, attract investors, and provide the necessary resources for property improvements. Engaging the services of a professional property management company can further optimize rental revenue by leveraging their expertise and experience in navigating the rental market, promoting tenant retention, and conducting timely rent reviews.