Find the moment you remember.

Taylor Avakianat 23:00

I don't remember what prop it was or what what which is the property taxes. Keeping the the property tax. Oh, I'm sorry. the rent control. Rent control. Yes.

Taylor Avakianat 21:27

market. That's a rent control market.

Taylor Avakianat 25:26

Are they going to have rent control?

Taylor Avakianat 31:24

It sounds like I got your answer, but do you believe in rent control?

Taylor Avakianat 36:50

now. The market's the rental market is for sure flat. I mean, we've seen it the last two years, it's been about 2 to 3% rent increase, which for LA is is low, I would say standardly. So, it feels like to me in vacancies are staying longer, more concessions on a lot of things we have. And the average that we're seeing is around 8 weeks for a lot of these new construction buildings, which is a lot. um and they're structuring it uniquely, but it feels like the rental market's pretty flat to me, which is an overall…

Taylor Avakianat 24:28

…go further and farther up inwards because a lot of investors are looking in Ventura too, Oxnard. They don't want to deal with, you know, LA County rent control and stuff. But, if you're doing new construction, it's kind of like squeezing those two opportunities together. And if the rent's going to continue to grow up, it's probably gonna make a ton of

Taylor Avakianat 28:08

client side's different. Do you think it's because you after running a property management company? Because I commend you and every property manager that I know like no one likes property management. No one most owners don't like their property managers. Um, but property management, you're dealing with tenants and like it's tough. It is a tough business, right? Was there something where the money became um such like okay I can see a path to growing a huge property management company that we're kind of already doing…

Taylor Avakianat 1:05:52

…got to manage that and someone's got to deal with those situations. And there's nuances where if an investor from Georgia came and tried to buy a rent control building in Los Angeles, like they'd probably get their ass beat because it is freaking hard. It is very hard, right? And so you kind of need that special skill. And so my thought was, okay, there's this tokenization stuff, but you still need an operator

Taylor Avakianat 38:53

Isn't it rent isn't rent control changed now? Well, yes, but if anything built in the city of LA after 1978 is is statewide rent controlled versus city of LA, which is a stricter rent

Taylor Avakianat 4:09

positively leveraged and then they enacted rent control.

Taylor Avakianat 30:30

um what do you mean by that too many? Well, I mean, I have a large part of my portfolio, our rent control department. So, why is it a bad thing? Well, I'm subject to political risk, right?

Taylor Avakianat 31:53

So, for you, what I'm hearing you say is that you're looking for ways to diversify out of rent control into non-reg.

Taylor Avakianat 25:24

said you're not very emotional when it comes to real estate decisions does that mean if a deal in um you know Compton comes up and it's a slam dunk home run makes sense like you guys are investing there or do you have parameters in terms of either rent control laws or locations or tenant types or is it going to be primarily Section 8 like is there

Taylor Avakianat 30:35

…I don't think a lot of people talk about that how just because there'll be because people say like Argentina how went from that's more on the rank control side but they went from highly rent controlled to not rank controlled at all and their rents came down 30% right like that's something that a lot of apartment owners and people who stand up for apartments will point to and say Hey look this is why some of these programs and policies that we have in place on the service may look great but actually in reality the…

Taylor Avakianat 38:21

…feel about the city council and some of the decisions that they've been seeming to make in terms of making it either more restrictive in terms of rent increases which I know the county came out and Chang the amount that you can raise the rent uh based two-thirds on the CPI for rent control units which was built before 1995 and then recently I've heard that the city is making a push to convert all buildings to Electric appliances and an electric and then also they're considering reducing some of the rent increases…

Taylor Avakianat 45:40

…do the banking Mountain View being one of them which is obviously a near Google and apple and stuff like that so cver city has their own um I think rent control policies they have their own Ula stuff which seems to be working out pretty well I saw a detailed breakdown of that my my concern and I get this question a lot from not only owners but people who friends family they're like are you sure you want to be dealing and selling properties in in Los Angeles because it seems like every year it just gets harder and…

Taylor Avakianat 11:03

…like a broken record because I say it almost every time but it's they everyone knows we have a housing housing shortage in Los Angeles why do the rents keep coming up because supply and demand that is the fundamentals of why your rent keeps going up it's because there's not enough housing for everyone else and when it's harder to develop that only constrains the supply where it becomes almost a benefit a benefit or like the people who are winning are the ones who can afford to do these new developments and make it…

Taylor Avakianat 42:47

so interesting it's so interesting um I'm curious to know your thoughts with the regulations and R control and this is filmed before prop 33 either passes or doesn't and it'll come out after so we're not going to have the answers to this but with like all the regulations that are going on in California rent control things like that how do you do you see California and Los Angeles as being a long-term place where you want to continue to develop or do you see yourself trying to diversify in maybe a little more…

Taylor Avakianat 32:56

this in Argentina I think in article came out how they had super strict rent control the person I know this is four five seven years ago they got rid of rent control completely and the rents actually came down 30 or 40% because everyone started building again and it's like wait a second uh if you don't put restrictions then people will build and then the supply and demand fundamentals will be there and then the rents come down surprise right right how crazy is that a great example of that yeah which is just I mean…

Taylor Avakianat 43:53

Well, as some I think because the rent control laws are getting stricter and stricter, people are going to give you that $2,000 price base rent, but there's going to be all these stacked on fees on top of it so they get to market rent or perceived market rent that they're trying to achieve, right? Because they can't increase the rents. It's not going to make sense from a growth per projection perspective over their investment timeline if they're not going to be able they can raise the rent 3% or vacancy control…

Taylor Avakianat 1:06:33

be. Well, you don't have rent controlies, right? You don't got to deal with tenants. Really? I know. I know. I know.

Taylor Avakianat 12:43

Do you want to buy some rent controlled Los Angeles multif family properties cuz that is the biggest headache that I think anyone can deal with.

Taylor Avakianat 43:22

No, that's but but you know what? And I think what has been, especially in Los Angeles what makes sense is because other income is not rent controlled. For the most part, right? There's certain skip pass through fees and stuff like that, but parking income parking income is not rent controlled. You can raise it as much as you want every year.

Taylor Avakianat 22:46

They really do matter. Do you think that there could be because we we beat it LA um they were going to do something like the uh rent stabilized or trying to do something like vacancy control. Right. Clearly that's not a good way to go about it. Are they do you think New York is going to reverse that andor do you think that that possibility could come to Los Angeles if we continue down the path?

Taylor Avakianat 31:53

how prop 33 even had legs to begin with because that would have done exactly that which is happened in New York City in 2009 when they passed that bill now I don't know the exact number of of units that are off the market but when you have vacancy control and you have a TI pay 700 bucks and then you can raise to $730 like it just makes more sense to close the doors and not rent it out right it's only going to exacerbate

Taylor Avakianat 31:04

…in 6 months 12 months now what is it 3 months away for this November vote four months if and we were talking about that about New York vacancy control right that is on the ballot in Los Angeles and so if you're buying properties that you guys are buying 20s 30s 40s 50s 60s built 1960s built buildings and those are capped at you know 3% to four 5 6% rent increases per year now imagine your business plan in in 2017 2018 2019 where you can't increase the rents when someone leaves that that that crushes any sort of…

Taylor Avakianat 25:15

right everything comes and goes and well in retail you know rank control um they're trying to they were trying to put something on the ballot to control commercial rents as well I don't I

Taylor Avakianat 44:25

Like let's let's say vacancy control happens. Your apartment you can only raise it from 1000 to 1030. Does someone say, I'm going to renovate this, but parking's $1,000? And you can the the base rent's 1030, but if if parking or you know, like is there a workaround? You know what I mean?