Issuu

SUMMER 2021

CONNECTION

C . A . R . Legislative Update This week sees legislation intended to increase the supply of housing moving forward in committee, S B 9 ( Atkins) and S B 1 0 ( Weiner). While C . A . R . supports increasing supply, we are requesting amendments on both bills. Also, S B 476 ( Min), a PAC E consumer protection bill we support continues to move forward. SB 9 (Atkins) Subdivisions: Tentative Maps is a bill which will make it easier for owners of property to have freedom to split their lots and to build two units per lot. The bill also has a number of constraints on how development must proceed to ensure that such development is not disruptive to an area. C . A . R . has concerns about the possibility that in the absence of safeguards, properties could be purchased by developers in the more affordable and diverse areas of the state and properties constructed that are not beneficial to the members of that community. C . A . R . is therefore requesting amendments to help address that concern. If these amendments are accepted, C . A . R will move to a support position.

H OAs without really looking at how that could affect existing H OA communities. As amended the bill would create a host of title and other concerns regarding how it would affect H OAs, governing documents of H OAs and possibly even the ability to finance units in H OAs. C . A . R . moved to oppose S B 1 0 until it is amended to address those issues. The bill author has agreed to amendments that address would our concerns and return S B 1 0 to the version introduced earlier this year. C . A . R . will remove our opposition once these amendments are in print. SB 476 (Min) PACE Program Administrators requires that an energy audit is performed on a property before the execution of a PAC E financing contract. It also provides that an inspection must be done to ensure that all work has been performed properly before payment is disbursed to the licensed home improvement contractor.

An energy audit is something C . A . R . has always favored as it would help ensure that consumers are not misled into contracts for improvements which actually do little to improve energy or SB 10 (Wiener) Planning and Zoning empowers local water conservation for the property. governments to enact ordinances that allow for greater construction of housing. It would allow a locally enacted S B 476 will be heard in the Assembly Local ordinance, for example, to permit owners to exempt projects Government Committee on June 2 3 . of 1 0 units or less, from any additional C EQA review if the parcel is in a transit-rich area, jobs-rich area, or an urban “Reprinted from C.A.R. website (https://www. infill site. S B 1 0 also requires developers to follow all local car.org/knowledge/pubs/newsletters/ objective design criteria, local impact fees, local height newsline/leg%20update%2062121), with and setback limits, and local demolition standards and permission of the California Association prohibits the streamlining of projects in state or national of REALTORS. Copyright. All rights historic district. However, S B 1 0 was amended to include reserved.” This bill will be heard in the Assembly Housing and Community Development Committee on June 22.

A PUBLICATION FOR MEMBERS OF THE WEST SAN GABRIEL VALLEY REALTORS®

www.wsgvar.com 1 0 3 9 E . Valley Blvd. #2 0 5 B , San Gabriel, C A 9 1 7 76 (6 2 6 ) 2 8 8 - 6 2 1 2 • Monday to Friday • 9am to 5pm

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OFFICERS MINDY YEH President

BRIAN CHEN President- Elect

L I N G C H OW Vice President

LORRAINE CLARK Treasurer YIN BIHR Secretar y

DIRECTORS PAU L I N E L A M

NANETTE ONG

C E C E L I A “ C Y L ” R U DA R

T O M A S WO N G

SHUN ZHANG I M M E D I AT E PA S T P R E S I D E N T GIUSEPPE VENEZIANO EXECUTIVE OFFICER ALBERT TRAN

ASSO CIATION STAFF ANGELICA MORALES Director of Operations

K A R E N S N OW Accountant

PHONG TON Education & Store Manager

BELEN BERRIOS Communications & Events Manager

CHRISTINE CHEN Member Support Specialist

S U S A N K R O G S TA D Member Support Coordinator

FIRST

June 2 5 , 2 0 2 1 9 : 3 0 am - 1 2 : 3 0 pm Webinar - License Renewal D R E 45 - Hour Continuing Education June 2 8 & 2 9 , 2 0 2 1 9 : 0 0 am - 5 : 0 0 pm Certified International Property Specialist ( C I P S ) Designation Courses June 2 8 , 2 0 2 1 9 : 0 0 am - 1 : 0 0 pm Selling High Performance Homes June 2 9 , 2 0 2 1 1 0 : 3 0 am - 1 2 : 0 0 pm Are We Seeing the End of the Tenant Relief Act? June 3 0 , 2 0 2 1 1 1 : 0 0 am - 1 2 : 0 0 pm Hurdlr: Business Expense & Mileage Tracker July 7 , 2 0 2 1 9 : 0 0 am - 4 : 3 0 pm 8-Hour MLO Live Webinar Continuing Education Visit www.wsgvar.com/events/education-schedule/ for the complete education class schedule.

N E W S & FEATURES What’s Happening in Your City & Los Angeles County Summer 2 0 2 1 Legislative Repor t 6 Sales and Price Repor ts

Assessor 1 0 1 : Basic Facts Property Owners Should Know 10 Single Family Residence Statistics

Signs of Recovery

The Role and Status of US Temporary Visas for Workers and Students 20 www.wsgvar.com

Happy Summer! It has been a joy and a pleasure to have served as President of the West San Gabriel Valley REALTORS® (WSGVR) over the past year. I’m happy to have done so alongside the 2021 Board of Directors, our Executive Officer and staff and look forward to serving the rest of 2021. I’d like to take a moment to congratulate the 2022-2023 Board of Directors election winners. Congratulations to Marian Cavataio, Ling Chow, Lorraine Clark, Jeff Huang, Earl Knudson and Tom Tseng. Together they will work hard and review the current policies and, when needed, set new ones in place to benefit our members. We look forward to a successful year ahead for our association. On April 15th, 2021 the 11th Director and Supervisor Charter Ceremony was held for our New Taipei City Real Estate Agent Association. I had the privilege to record a video to congratulate them on their successful reelected directors and supervisors. Congratulations to their 11th Chairman, Mr. Ling Pingchuan and Chairman Mr. Zhang Ronglong. I’d like to extend my thanks to our WSGVR 2021 President-Elect, Brian Chen, and our Executive Officer, Albert Tran, as well as GBC members for participating with Canadian Real Estate Association (CREA) and WSGVR in a presentation for “A Global Affiliates Webinar Series: Market Portfolio & Networking”. This took place on Wednesday, May 26th, 2021 f rom 10:30am-11:30am. On Wednesday, June 2nd, 2021 , it was my honor to represent WSGVR and WSGVR Global Business Council (GBC) in joining The Global Real Estate Association of Seoul (GRAS). I was able to be a part of the signing of our Virtual Memorandum of Understanding (MOU) to build and start a great relationship between the two associations. This relationship will allow members to collaboratively learn about perspective markets, increase their cross border transactions and make referrals. We look forward to visiting GRAS in the future, when it is again safe to do so. Thank you to everyone who helped make this event successful. The National Association of REALTORS® (NAR) annual Conference & Expo will be live in San Diego November 12-15, 2021. We look forward to meeting our MOU partners at the conference and would like to invite them to stop by our board to meet all of our members. The FAA has updated federal guidance which allows you to fly drones at night and over people and vehicles. The latest Window to the Law

CONNECTION SUMMER 2021

Editor Alber t Tran

Copywriter Rachel Str ysik

Production Design Elisabe th Zárate

P R E S I D E N T ’ S M E S S A G E explains how this add more depth to your marketing. As per NAR Associate Counsel, Ms. Katie Garrity, new FAA rules ease restrictions on certain operations: FAA 2016 rule - pilot licensing requirements, drone weight limits and altitude and speed limits. NAR Window to the Law: Remote Identification Rule (Effective 09/15/2023): requires drones to transmit identifying information, accessible by law enforcement agencies. Operations Over People and at Night Rule (Effective 03/16/2021): certified drone pilots with updated initial test or online training may fly at night, drone must be equipped with flashing anti-collision lights, be familiar with FAA Rules, State and Local laws, keep pilot certification handy during operation. Hiring drone photographer: confirm company’s insurance coverage, operator must have a current and updated pilot certificate, comply with all applicable FAA Rules and State and Local Laws, require identification by the company for any claims related to the operation, address copyright issues. For best practice, it is recommended to include the new revised C.A.R. California Association REALTORS® Property Images Agreement (C.A.R. PIA Revised Form 6/21). For more information please visit nar.realtor/drones We are excited to be able to reopen our office soon. This last year has been trying but we look forward to being able to serve you in person again soon. Meanwhile we are excited for our second virtual July 4th celebration that will take place on Thursday, July 1st, 2021 at 9:00am, which will be hosted by WSGVR Membership and Special Event Committee. During the event, we will share a virtual tour of our US monuments and history, along with games and drawing prizes. We hope you’ll be able to attend. Thank you again for your continued support and loyalty to WSGVR. Please continue to stay safe and healthy. The pandemic is not over yet but there is a light at the end of the tunnel. Sincerely,

Mindy Yeh 2020/2021 WSGVR President

West San Gabriel Valley R E A LT O R S ® Newsle tter Submissions For submissions contact Albert Tran

All articles are informational and are not intented to be a substitute for professional assistants. Consult a professional as needed.

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What’s Happening in Your City & Los Angeles County Summer 2 0 2 1 Legislative Repor t The West San Gabriel Valley R E A LT O R S ® ( W S G V R ) Legislative Committee has compiled the following legislative reports for each of our cities ( Alhambra, Monterey Park, Rosemead, San Gabriel, and Temple City). In addition, it also reports on the legislative issues within Los Angeles County via the Los Angeles County Business Federation, also known as BizFed. BizFed is a massive, diverse grassroots alliance that unites and amplifies the voice of businesses in and around the Los Angeles area.

Alhambra

Monterey Park

The city of Alhambra has been committed to permit more housing projects, especially Accessory Dwelling Units (ADUs) and affordable housing. After rejecting the proposed The Villages Project, in the spring, the city planning commission has just approved an 100% affordable housing unit known as “Mariposa on 2nd”. The project sits on a former city parking lot on 2nd St by Main St. The applicant is requesting approval for the construction of a seven (7) story 50-unit residential, a one (1) commercial unit and a mixed-use affordable housing complex, with a 2-level above-ground parking garage. Residential uses are conditionally permitted in the CBD zone when in conjunction with commercial use. In addition, the applicant is installing a new wireless facility at the western corners of the building along South Second Street.

The city of Monterey park is in support of the San Gabriel Valley Council of Government’s (SCVCOG) white paper on Los Angeles Home Homeless Services Authority (LAHSA). The SGVCOG and its member cities, including the city of Monterey Park, developed this white paper to demonstrate our commitment to creating a more coordinated, effective homelessness services system, which is capable of solving our homelessness crisis.

The proposed development includes a total of 50 units, 30 of which are 1-bedroom units and 20 of which are 2-bedroom units; with three (3) layouts that prospective tenants will be able to choose from. All units will share similar floor plans consisting of a living room, dining area, kitchen, and one or two bedrooms. Plan 1-1 will consist of a one (1) bedroom, one (1) bathroom, of approximately 6 48 square feet. Plan 2-1 will consist of a two (2) bedroom, one (1) bathroom, of approximately 841 square feet. Plan 2-1 Alternative, will consist of a two (2) bedroom, one (1) bathroom, of approximately 8 44 square feet. The residential units will be located on floors three ( 3) through seven (7). With the exception of the manager’s unit, 100% of the residential units will be dedicated as affordable units. A total of 24 supportive housing units will be constructed, with 15 units designated as a one (1) bedroom unit and 9 units constructed as a two (2) bedroom unit. These 24-units will be income-restricted for those who meet the Area Median Income (AMI) of 30% (Very Low Income). In addition, 25 affordable units will be constructed, with 15 units designated as a one (1) bedroom unit and 10 units designated as a two (2) bedroom unit. These 25-units will be income-restricted for those who meet the AMI of 50% (Low Income). The project has been approved by the city of Alhambra planning commission. It is the first large-scale project being approved by the city. The city has chosen to dedicate one of its lands to set samples and encourage developers to follow suit with more affordable projects.

Th e cit y of Mon te re y Park, alon g w ith all jur isd ic t ions th rough out th e s t a te , is m an da te d b y Cal if or nia St a t e law t o pre pare a h ous in g e le me n t upda t e f or s t a t e ce r tific a tion . Th is upda te m us t com ply wit h St a t e Hous in g Law an d t o accom m o da te the cit y’s new Re gion al Hous in g N e e ds Allo c a tion ( “ R H N A ” ) d ur ing th e Six th Cy cle Hous in g E le me n t P la nning Per io d , e x te n din g from Oc t ob e r 1 5 , 2 0 2 1 t o Oc t ob er 1 5 , 2 0 2 9 .

Rosemead City of Rosemead Planning Commission Meeting was held on June 7, 2021. An applicant resubmitted a design review and density bonus application for the construction of a residential/ commercial mixed-use development, which is physically suitable for the proposed density of development. The finding, tentative for this tract, located on Walnut Grove Avenue and Garvey Avenue, will consolidate four existing parcels. In total, 1.06 acres for the creation of 54 legal condominium parcels for the development of 42 residential condominium units and 12 commercial condominium units totaling 18,646 square feet of commercial floor area and 42 residential condominium units (seven out of the 42 units would be lower income). This project includes an amendment to the general plan, which will change the land use designation of the subject parcel from commercial to mixed-use: Residential/Commercial (30 du/ ac). The Mixed-Use: Residential/Commercial (30 du/ac) land use designation allows a density of 30 units per acre. Per Rosemead Planning Commission staff report ( Page 1 4 of 7 8 ) this proposed project meets Regional Housing Needs Assessment ( R H N A ). “ The California Department of Housing and Community Development ( H C D ) has determined that the regional housing need for jurisdictions in the S C AG region is 1 , 3 41 , 82 7 units. The Final Sixth Cycle R H N A allocation for the city of Rosemead totals 4 , 6 1 2 units. The proposed development of 42 residential units will contribute to the city’s R H N A allocation for Planning Cycle 202 1 to 202 9 . ”

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Temple City The city’s property at 9 0 5 0 E . Las Tunas Drive ( 2 1 , 0 0 0 sq ft) is situated in a well-traveled corridor that presents unique redevelopment opportunities for the city. The city has contracted with Goodale Architecture Planning to conduct a study on the site and to present preliminar y site utilization concepts. Currently it is being used as the Chamber of Commerce office, which will be relocating to 5 9 3 8 Kauffman Ave in the future. The following are preliminar y site utilization options for the city council’s consideration: 1 A . Retail: A one-stor y 7 , 70 0 sq. ft. dividable retail space. Merits: This option is most contextual to the current streetscape. Debits: This option would not take advantage of the unique site location and the opportunities it presents. 1 B . Incubator: A one-stor y 7 , 70 0 sq. ft. shared-resource office space. Merits: This option is most contextual to the current streetscape and could address a growing need for co-working spaces. Debits: May require a specialty landlord or management for success. 2 . Fast Food Restaurant: A 1 , 8 0 0 sq. ft. fast food restaurant, with 6 0 0 sq. ft. outdoor seating space and a drive-thru. Merits: This option could be somewhat fitting to the streetscape. Debits: Awkward site geometr y for parking and drive-thru; “suburbanizes” a space that could extend the city’s downtown area. 3 . Senior or Affordable Housing O ver Re tail: A four-stor y structure with 9 , 0 0 0 sq. ft. retail space on the first floor, and senior or affordable housing units in the upper levels. A subterranean parking level is also included as an option for this concept. Merits: This option would help the overall region’s affordable housing crisis, and could bring robust returns. Debits: Awkward site geometr y for parking and retail. 4 A . Public Park: A 1 2 , 0 0 0 sq. ft. public park with related recreational support. Merits: This option could provide more green space along the Las Tunas corridor, and leverage or preserve existing features. Debits: Foot traffic seems to be low in the area and there are safety issues due to vehicular traffic. 4 B . Restaurant, Adaptive Reuse: Retain existing structure and adapt into a restaurant with 2 , 40 0 sq. ft. enclosed dining area and 6 0 0 sq. ft. patio area. Merits: This option leverages and reuses almost all existing resources and structures on the site. Debits: This option does not maximize the development/density potentials of the site. Single-owner operator is also key to initial success or failure. These options are preliminar y concepts, city staff and consultants will work to provide the city council with a comprehensive analysis to explore select concepts from.

San Gabriel The city of San Gabriel anticipates its first Affordable Housing development at 405 S. Del Mar Avenue, San Gabriel, a city lot acquired in December of 2020. Research approval seems to be pointing towards moving forward with the development. Related California, a development company, is enlisted to work with the city of San Gabriel in the development. The project proposes approximately 50 rental units for seniors and 50 rental units for families in two separate buildings with common areas in between. If all goes well, construction is expected to commence in 2024. Meanwhile, other developments encircling the city of San Gabriel include the following mixed use developments and commercial developments: Mixed Use Developments include the construction of the Curio Hotel on 101-111 W. Valley Blvd, which will house 225 hotel rooms, 87 residential units and 32,823 sq.ft. of retail space. Curio will be one of 3 luxury hotels in the city of San Gabriel along with Hilton and Sheraton. The One is another development at 101 E. Valley Blvd with 81 residential units and 15,000 sq.ft. of commercial space. Mission View Plaza at 704-7 12 W. Las Tunas Dr. will include 31 residential units, 4 live/work units and 6,369 sq.ft. of retail space. The construction at 400-420 W. Valley Blvd will have 127 residential units and 50, 500 sq. ft. of commercial space. The development at 300 E. Valley Blvd will have 68 residential units and 16,500 sq.ft. of commercial space. The development at 220 S. San Gabriel Blvd will have 153 residential units and 34, 835 sq. ft. of commercial space. The development at 201-217 S. San Gabriel Blvd will have 153 residential units and 34, 835 sq. ft. of commercial space. Commercial Developments include the Elegance at San Gabriel on 824 S. Gladys, which will be a senior residential care facility consisting of 197 rooms. Also, on 414-420 S. San Gabriel Blvd, construction of an art gallery and 200,000 sq.ft. of self storage facilities will be underway. Mark your calendars for San Gabriel’s Virtual “National Night Out” with the city of San Gabriel and the Police Department on August 3, 2021 at 5PM. Featuring the K-9 unit, motor officers, station tour, the School Community Engagement Team (SCET) and more! For more info, contact (626) 451-5 455 or info@SGPD.com www.wsgvar.com

BizFed Homelessness 2021’s Top Issue for the Second Consecutive Year As BizFed has done in its previous 13 surveys, survey respondents were asked to identify issues they consider either “extremely critical” or “somewhat critical” and then rank those in order of importance. Prior to 2020, high taxes and fees had a nine-year run as the top issue, however, for the past two years, homelessness has been rated as the most concerning issue for Los Angeles area business owners. This year’s top five issues are as follows: Homelessness: For the second consecutive year, the top business concern, after ranking as low as 17th in 2017, was Los Angeles’ homelessness crisis. More than 95% of those surveyed rated it as “extremely critical” or “somewhat critical.” Taxes & Fees: This issue, which until 2020 ranked as the top concern among Los Angeles-area businesses, ranked a close second to homelessness for the second consecutive year. Crime: After jumping from #12 to #3 in 2020, business concern about crime was rated as “extremely critical” or “somewhat critical” by 94% of those surveyed.

Education: Likely reflecting challenges many workplaces experienced in the past year due to COVID-19-related school closures and accompanying childcare issues, education climbed the rankings to #4 this year, up one slot from 2020. Legislative Gridlock (State/Federal): Government’s inability to get things done continues to be a top concern among business leaders, jumping from #10 in 2019 to #4 in 2020 and #5 in 2021. In line with the issues identified as most critical, business leaders remain particularly dissatisfied with local government’s performance when it comes to reducing homelessness (only 12.8% expressing they are satisfied), housing affordability (only 11.3% satisfied) and imposing reasonable fees and regulations (only 20.8% satisfied). Also registering very low satisfaction ratings were attracting new business, streamlining business permits, improving traffic and reducing crime. The only issue to score above a 50% positive was public safety and emergency response time. Legislative Report Contributors: - Tom Tseng, Alhambra City Liaison, Global Business Council Vice Chair - Tomas Wong, Monterey Park City Liaison, Legislative Committee Chair - Mindy Yeh, Rosemead City Liaison, 2020/2021 President - Nanette Ong, San Gabriel City Liaison, Membership/Special Events Chair - Shun Zhang, Temple City City Liaison, Global Business Council Chair - Lucia Tam, Liaison to BizFed

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Assessor 1 0 1 Basic Facts Property Owners Should Know By Jeff Prang Los Angeles County Assessor

As you might imagine my office receives literally tens of thousands of questions annually, interestingly enough, mostly dealing with real estate. Questions about home values, reassessments, what happens when a homeowner dies or better yet, what exactly is the Homeowners’ Exemption? Nearly half of my approximately 1 , 2 0 0 employees are property appraisers. They appraise ever ything from homes to commercial buildings to airplanes. Obviously, I value my relationship with Realtors and other real estate professionals. In fact , the West San Gabriel Valley Association of Realtors and the other AO Rs in Los Angeles County are vital to the job that I do. I find that when we can share resources and information and support one another’s efforts we are far more effective. Along those lines, I have taken the most common questions and provided the answers for W S G VA R members to share with your clients and prospective clients:

1 . What is a supplemental tax? The Supplemental Tax is a bill that reconciles the difference between the taxes owed by the prior owner and those now owed by the new owner. This amount is prorated from the time of closing escrow until the time the Assessor learns that there is a new owner and the Treasurer- Tax Collector can send a new, upto-date property tax bill. To estimate the amount of supplemental taxes for a given property, please visit h t t p s : / / a s s e s s o r. l a c o u n t y. g o v / s u p p l e m e n t a l - t a x estimator/ 2 . What do you do when a property owner dies? The Los Angeles County Assessor must be notified within 1 5 0 days of the date of death by filing the Change in Ownership – Death of Real Property Owner form along with a copy of the death certificate. This must be filed in addition to any notification made to law enforcement, the Coroner, or even the RegistrarRecorder/ County Clerk. Failure to notify the Assessor may result in penalties and complicate estate planning. For more information, go to assessor.lacounty.gov/ death-of-real-property-owner. 3 . What exactly is the Homeowners’ Exemption? This is a property tax savings program that reduces the assessed value of your home by $7 , 0 0 0 , which translates to approximately $70 annually off your property tax bill. The home must be your primar y residence. You need only file the form one-time and the annual savings remains until you sell our home or affirmatively cancel the exemption. Over 3 0% of homeowners in L A County who qualify have not applied, primarily because they are unaware of this easy to access program. For more information go to assessor.lacounty.gov/homeowners-exemption.

I find that when we can share resources and information and support one another’s efforts we are far more effective.

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4 . Am I protected from reassessment if the property is in a trust? No. A trust is essentially a set of instructions on how property is to be disposed of upon the death of its owner. Generally, when the trustor of a revocable living trust passes away, their property transfers to the beneficiaries named in the trust. Although a trust may identify the recipient of the property – the beneficiar y - that beneficiar y is still obligated to report the transfer to the Assessor’s Office by filing a Change in Ownership – Death of Real Property Owner within 1 5 0 days of the death. Additionally, if a child or grandchild is inheriting the property, they may seek to have the date of death transfer excluded from change in ownership reassessment by filing a Prop. 1 9 parentchild or grandparentgrandchild transfer exclusion claim with the Assessor’s Office. For more information go to assessor.lacounty.gov/real-estate-professionalstoolkit/ 07 -wills-and-trust-savings/ . 5 . When the Assessor building diagrams are in conflict with those at the City building department , which are correct? The cities have the official plans upon which you should rely. A discrepancy between the Assessor’s records and the city’s may indicate that there has been unpermitted construction. 6 . When will my property be reassessed? Property is reassessed when it changes ownership or when new construction occurs. Examples of new construction include the addition of a pool or accessor y dwelling unit ( A D U ). When new construction occurs, only that portion of the property that was newly

constructed is reassessed; the rest of the property however retains its existing base year value. As a result, following the completion of new construction, the property will have what is called a “blended” base year value. These are just a sampling of the questions my office receives ever y day, but they’re some of the most common. For more information on these issues or any others, visit assessor.lacounty.gov or call 2 1 3 - 9 74 - 32 1 1 .

Over 3 0% of homeowners in L A County who qualify have not applied, primarily because they are unaware of this easy to access program.

Los Angeles County Assessor Jeff Prang has been in office since 2014. Upon taking office, Prang implemented sweeping reforms to ensure that the strictest ethical guidelines rooted in fairness, accuracy and integrity would be adhered to in his office, which is the largest office of its kind in the nation with 1,400 employees and provides the foundation for a property tax system that generates $17 billion annually.

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Acquisitions for large commercial real estate— properties or portfolios of at least $2 . 5 million— fell 2 8% year over year in the first quarter of 202 1 , with transactions declining across all property types, except for hotel acquisitions. Investors could be acquiring hotels to convert into other uses such as multifamily housing. ( N A R recently released a report detailing five case studies of hotels and motels repurposed as multifamily housing. Find it at nar.realtor.

The commercial real estate market is recovering. . .

Signs of Recover y By Scholastica ( Gay) Cororaton First quarter transaction and market data show commercial real estate is digging out of its pandemic slump—but it hasn’t bounced back to pre-pandemic levels. The commercial real estate market is recovering, according to the National Association of R E A LTO R S ® ’ quarterly market survey of commercial members and other industr y data, but it remains weak compared to conditions before the C OV I D - 1 9 pandemic.

By contrast, in smaller markets where transactions are less than $2 . 5 million, N A R commercial members who participated in the survey reported that their sales transactions volume in the first quarter of 202 1 contracted by just 1% compared to the level one year ago. Respondents reported an increase in acquisitions for industrial properties and all types of land, with strong growth in sales of residential and industrial land.

Prices Begin to Recover Commercial real estate prices continue to firm up, but the value of commercial real estate is still broadly down by nearly 6% compared to one year ago, based on the Green Street Commercial Price Index, an appraisal-based index of the properties held by R E I Ts. The decline has tapered off from the 1 0% decline in the second quarter of 2020 .

Among closed transactions of N A R commercial members (typically below $2 . 5 million), sales prices rose by 2% on average year over year.

Among closed transactions valued at $2 . 5 million or more, sales prices rose 6 . 7% from one year ago, according to Real Capital Analytics. Among closed transactions of N A R commercial members (typically below $2 . 5 million), sales prices rose by 2% on average year over year. N A R members reported particularly strong price gains for land (+6%), industrial warehouses (+5%), class B / C apartments (+5%). Residential land prices were up 9%. www.wsgvar.com 16

Cap Rates on the Decline While prices are showing some firming, cap rates have been on the decline. Risk spreads (cap rate less 1 0 -year T -note) for the office, retail , industrial , and hotel sectors have also trended downward. First-quarter cap rates were at about the same level as those of one year ago. However, the market is still thin, so first-quarter rates likely reflect transactions of prime properties or properties expected to yield good cash flows when redeveloped or put to uses other than the existing use. The Changing Demand Predicted effects of C OV I D - 1 9 on demand for office space are starting to materialize. A sizable majority of N A R commercial members who responded to the Q 1 survey— 70%—reported that companies are reducing their square footage needs due to more employees working from Smaller Cities Buck Office Trends According to the Bureau of Labor Statistics, 2 1% of the workforce was still working from home as of March 2 02 1 , up from 6% before the pandemic. Not surprisingly, the national office vacancy rate continued to tick up in the first quarter of 202 1 , to 1 6 . 4%, from 1 3% one year ago. Vacancy rates have increased as occupiers shed 1 3 8 . 4 million square feet of office space. That’s the equivalent of 2 , 4 0 3 football fields, or 48 football fields per state. The largest increases have occurred in big cities where finance and tech companies are headquartered. San Francisco’s overall vacancy rate—direct and available via sublet—increased by 1 2 . 7 percentage points compared with one year ago, jumping from 6% to 1 8 . 7%, as 9 . 7 million square feet became unoccupied, according to Cushman and Wakefield. In Seattle, the vacancy rate rose from 8% to 1 7 . 2%, as 4 . 3 million square feet of office space became unoccupied. The New York– Midtown South market shed the most office space, 1 0 . 7 million square feet , leading to an vacancy rate of 1 7%, up from 8 . 2%. Other metro areas with a relatively large tech workforce, such as Austin, Texas; Nashville, Tenn. ; Rochester, N .Y. ; and Salt Lake City, also saw a surge in overall vacancy rates.

home. In addition, more than half of respondents— 5 7%— reported that they are seeing shorter-term leases compared with before the pandemic. Despite these troubling indicators, there are pockets of opportunities, particularly in secondar y and tertiar y markets. Respondents to the Q 1 survey anticipate a modest increase in sales of land ( 5%), industrial warehouses ( 3%), and class B / C apartments ( 1%) in the next 1 2 months. Respondents anticipate a decline in sales transactions for retail, office, and hotel and hospitality properties. N A R now produces a monthly Commercial Market Insights Report.

afloat and continue to pay rent throughout the pandemic. The U. S . Census Bureau’s Business Pulse Survey, launched in April 2020 , shows less than 2% of small businesses have closed permanently. Lower asking rents may also be a factor. For example, Boise, Idaho, saw just a 1 . 7% increase in office vacancy rates compared with a year ago. The asking office rent in Boise is just $2 1 . 5 0 per square foot, compared with $40 in San Francisco. In some cities, a large part of the available office space is for sublet. Direct tenants are still leasing the space, but with workers working at home, they’re subletting unused space. Available office space from flexible operators like WeWork is also part of this subleased vacancy. Tech workers and startup companies have been the largest occupiers of flexible office space.

In most secondar y or tertiar y cities, vacancy rates have increased only modestly. One factor could be the Paycheck “ Copyright N AT I O N A L A S S O C I AT I O N O F R E A LT O R S ® . Protection Program, which has helped small businesses stay Reprinted with permission. ” www.wsgvar.com

The Role and Status of U S Temporar y Visas for Workers and Students The U S immigration system is complicated, confusing, and frequently changing. With nearly 20 0 types of visas covering ever ything from business and tourist trips, to temporar y employment , or long-term residency, it’s no wonder that the topic of immigration frequently sparks misunderstandings. Temporar y visas are designed for non-immigrants and include significant numbers of foreign workers in the U S and visiting international students. For real estate professionals, guest workers and students play a vital role in supporting property markets and economic development. Even though temporar y workers and students are not granted permanent residence, they still need places to live and there are no restrictions on owning U. S . property. According to N A R ’s Profile of International Transactions in U. S . Residential Real Estate, resident foreigners who purchase U S property are usually interested in a primar y residence. In contrast , non-resident foreigners are typically seeking a vacation or investment property. Regardless of the type of property acquired, foreign investment in U S real estate positively impacts property prices. Also, foreign workers and students contribute directly to local economies, supporting businesses and services beyond housing. Recent Developments C OV I D - 1 9 has touched ever y aspect of human life, including global travel and migration. Following the coronavirus pandemic’s outbreak, the White House suspended many categories of visas on the grounds of protecting jobs for U S workers while the risk of economic recession loomed large. The executive order, which went into effect on June 24, does not affect immigrants already in the US, existing visa holders, temporary workers in food production industries, or health care workers and researchers fighting COVID-19. Initially, the executive order suspended visas for international 18

students attending US universities that moved to remote learning. Subsequently, this part of the executive order was rescinded, and student visas remained intact. The current situation involving U S visas remains fluid. For example, in August the U S State Department announced the easing of additional restrictions, based on various national interest rules. 4 Key U S Visa Programs N A R supports visa programs as an important source of foreign investment in the U S . From an advocacy perspective, N A R promotes visa programs that are transparent and accountable, operated in a fair and efficient manner and actively weed out fraud and abuse. In terms of supporting U S real estate markets, these four non-immigrant programs are noteworthy. Specialty Occupations • Purpose: To help US companies hire foreign workers with specialized skills, often in technology and medical fields. • Positive Real Estate Impacts: Stimulates economic development, job creation, and property ownership. • Status: Suspended in June, with some restrictions subsequently eased. Seasonal Workers ( H 2 B ) • Purpose: To help U S employers temporarily fill nonagricultural jobs (usually six months). • Positive Real Estate Impacts: Supports housing in resort areas that rely on seasonal help (waiters, lifeguards, etc.). • Status: Suspended in June. Applicants may still be eligible if they meet specific criteria, including proof that denial will cause financial hardship for the US employer. Expat Employees ( L 1 A and L 1 B ) • Purpose: To assist international companies in establishing US operations by temporarily relocating some employees. • Positive Real Estate Impacts: Stimulates economic development, job creation, and property ownership. • Status: Suspended in June, with some restrictions subsequently eased. For example, foreign companies wishing to open US offices must employ five or more US workers.

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Student Visa ( F 1 ) • Purpose: Allows international students to attend U S colleges and universities. • Positive Real Estate Impacts: Students purchase and rent properties near educational institutions for housing and long-term investment, typically with their families’ financial support. • Status: Briefly suspended in June for remote learning students; now fully operational.

Bermuda At $2 6 3 , the Work from Bermuda program is a more affordable tax-free option for lovers of island living. Unlike Barbados, Bermuda’s remote work visa does not have a minimum monthly income requirement.

Looking For ward Global real estate professionals should keep a watchful eye on the visa landscape in the U S and other countries. As the pandemic continues to shape nations’ visa policies, there will undoubtedly be both positive and negative impacts to cross-border property investments.

Estonia As an extension of its e- Residency program, Estonia’s new Digital Nomad Visa allows remote workers with a minimum monthly salar y of $4 , 1 5 0 to live in Estonia for up to one year. The application fee is $1 2 5 , but the program is currently limited to people traveling from a small group of approved countries outside the E U, Schengen Area, or the U K .

Who is Recruiting Remote Workers? Digital nomads have been in the vanguard of the workfrom-anywhere movement long before the onslaught of C OV I D - 1 9 . Now, remote work has become mainstream, and many countries are eager to boost their economies. Several new visa programs are designed to attract workfrom-home employees longing to trade their virtual Zoom backdrops for a real-life change of scener y, including:

Georgia The Remotely from Georgia program accepts remote workers from 9 5 countries, including the U S , for stays ranging from 1 8 0 to 3 6 0 days. The minimum monthly income requirement is $2 , 0 0 0 , and applicants must provide proof of health insurance. Upon arriving, a 1 2 -day quarantine is required at a pre-approved hotel at the traveler’s expense, followed by a health screening.

Barbados The Barbados Welcome Stamp lets foreigners live on Barbados income-tax-free for one year, although the visa cost is steep: $2,000 for individuals, and $3,000 for families. It allows unlimited exit and re-entry, as well as free public schooling for children under 12. Applicants must show proof of employment and at least $50,000 in annual income.

In recent years, numerous other countries, including Mexico, Spain, Portugal, Germany, and the Czech Republic, have introduced visas targeting freelancers and digital workers. Since C OV I D - 1 9 has paused or altered some programs, it’s essential to research the latest requirements. “ Copyright N AT I O N A L A S S O C I AT I O N O F R E A LT O R S ® . Reprinted with permission. ”

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Photos by Alber t Tran Lacy Park, C A

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Br yce Canyon National Park, U T

Gwinn Park, C A

Photos by Alber t Tran

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