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

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.

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

Recently, two major insurance providers, State Farm and Allstate, have made headlines by announcing their decision to stop providing new property insurance policies in California. This development has significant implications for homeowners in the state, as it limits their options when it comes to securing property insurance coverage. In this blog post, we will explore the reasons behind State Farm and Allstate's decisions and discuss the potential impact on homeowners in California.

Understanding the Insurance Landscape in California: California is known for its diverse and unique geographical features, including a coastline prone to wildfires, earthquakes, and other natural disasters. This presents insurance companies with significant challenges when it comes to assessing risks and providing coverage. Insurance providers must carefully evaluate these risks to ensure they can maintain financial stability while providing coverage to policyholders.

Reasons for Ceasing New Property Insurance Policies:

1. Increasing Costs of Natural Disasters: In recent years, California has experienced an uptick in destructive wildfires, particularly in areas where homes and wildland areas overlap. These wildfires have resulted in substantial property damage and insurance claims, leading to increased costs for insurance providers. As a result, insurers have had to reevaluate their risk exposure and may decide to limit their exposure by discontinuing new policies in high-risk areas.

2. Regulatory and Legal Challenges: California has strict regulations and legal requirements that insurance companies must adhere to. These regulations often aim to protect consumers but can create financial burdens for insurers. For instance, after wildfires and other disasters, insurance companies face pressure to cover losses even if policyholders' properties were in high-risk areas. These challenges can make it difficult for insurance companies to maintain profitability and may lead them to make decisions, such as ceasing the issuance of new policies.

Impact on Homeowners:

1. Limited Insurance Options: With State Farm and Allstate ceasing to provide new property insurance policies, homeowners in California may face limited options when it comes to finding coverage. This restriction could create challenges for homeowners looking to secure insurance for their properties, especially those residing in high-risk areas prone to natural disasters.

2. Potential Price Increases: With fewer insurance providers in the market, the laws of supply and demand may come into play, potentially leading to price increases for property insurance. As competition decreases, the remaining insurance companies may have more leverage to adjust their rates, affecting the affordability of coverage for homeowners.

3. Need for Alternative Solutions: Homeowners affected by this development may need to explore alternative options to obtain property insurance coverage. This could involve reaching out to smaller, regional insurance companies, exploring government-backed insurance programs, or considering specialized insurance policies tailored to high-risk areas.

4. Importance of Risk Mitigation: Given the increased challenges of securing property insurance in California, homeowners must prioritize risk mitigation strategies. This may include investing in home improvements, such as fire-resistant roofing and landscaping, as well as implementing safety measures to minimize the potential for damage.

Conclusion: The decision by State Farm and Allstate to cease providing new property insurance policies in California highlights the complex challenges faced by insurance companies in a state prone to natural disasters. While this development may pose difficulties for homeowners in terms of limited options and potential price increases, it also underscores the importance of risk mitigation and exploring alternative solutions. Homeowners should stay informed, consult with insurance professionals, and take proactive measures to protect their properties in the face of evolving insurance dynamics.