San Rafael – With great organizing and advertising on local media, the three rent control initiatives on the ballot in the cities of Fairfax, Larkspur and San Anselmo in Marin County were solidly defeated in the November 5th election. All 3 measures were defeated with an over 66% NO vote.
Each ballot measure attempted to overlay additional rent caps to the current state laws that call for annual caps of 5% plus whatever the local CPI index is at the time rents are raised. Defeat of these initiatives allows landlords to keep up with the increasing costs of operating rental properties.
In the statewide measures, Prop 33, was also defeated soundly which called for repeal of existing California laws regarding rent control. Those behind the proposition were seeking to rewrite the current laws making them more favorable to tenants. The opposition to Prop 33 also heavily advertised against the measure, claiming that it would affect new statewide laws to encourage more rent housing. Those include the new Accessory Dwelling Unit legislation and the developer friendly initiatives to increase rental housing and bypass many of the hurdles developers face when they seek local approval for their projects.
In other positive news for the Marin County apartment market, lending rates for financing apartment purchases are coming down to as low as the high 5% range from last year’s highs of 7.5%. The Fed recently dropped their fund rates by another quarter of a point and plan to drop an additional quarter point by the end of the year. Local apartment lending is now at 60% LTV as opposed to the last 24 months at 50%. Some lenders will also increase their LTV to 65% if the borrower meets certain asset criteria.
I am looking forward to a very strong year of Marin County real estate sales in 2025 as long time owners retire from the apartment business and the next generation of apartment investors move into the market.
If you would like to discuss your apartment portfolio and how to complete 1031 exchanges into non management intensive real estate, like DST’s or NNN properties, please feel free to contact me at 415-302-7730 or email me at katherine@khiggins.com.