The leasing cap in Third Laguna Hills Mutual will stay at 30% as opposed to being lowered to 25%, a minimum rate set by state legislation, as decided during a regular meeting of the board Tuesday, Jan. 18.
The majority view, shared among directors and residents, agreed that lowering the leasing cap, which limits the number of units in Third that can be leased, misses the point of the legislation – to address housing communities with an inadequate number of rental units – and would infringe on property rights because Third’s leasing policy already exceeds the minimum requirement.
The average leasing percentage in Third is now 26%, according to a Village Management Services staff report.
The resolution is in response to Assembly Bill 3182, which became effective in 2021. It requires that at least 25% of units within a common interest development must be available to rent.
Director Cush Bhada said the actual leasing percentage in Third is significantly lower. He highlighted the phenomenon of nonresidents buying condos to house their parents at no charge, which are still classified as “rentals” under mutual policies.
During discussion of the agenda item, Katherine Platt, a 13-year Village resident and real estate agent, said: “Since more than one in four condos are currently leased, it’s obvious that being able to lease condos is a strong draw to buyers and current owners. The more buyers want to buy, the better the property values.”
In contrast, a staff report said that the benefits to lowering a rental cap may actually include a possible increase in the property value depending on the market, a wider pool of owner-occupied units and a reduction of financing fees incurred by buyers and existing owners.
Third unanimously sent the resolution back to committee for revision, with amendments to check the legality of Third’s original leasing policy from 2008 and to investigate the proper mechanisms to revise the leasing policy as well as facilitate child-parent leasing.
COVID-19 update
The COVID-19 case rate continues to climb in Orange County, with the latest reports indicating 197 new daily cases per 100,000 residents, according to the OC Health Care Agency.
In the city of Laguna Woods, there were 942 COVID-19 cases as of Tuesday, Jan. 25 – an additional 101 cases since the previous week – and 61 related deaths to date.
“It’s about being safe, wearing your mask, washing your hands – all of the protocols we’ve had in place in the past – but this omicron [variant] is spreading quickly and fast,” said VMS CEO Jeff Parker. “Unfortunately, it continues to grow.”
The testing positivity rate stood at 25.3% as of Tuesday — that’s the number of swabs and spit tests that return testing positive for the coronavirus.
Meanwhile, the health equity rate – the test positivity of disproportionately impacted neighborhoods – was reported at a slightly higher margin of 29.2%.
“We want to make sure … [that new COVID-19 cases do] not impact the hospitalizations too much so that people can go get regular service and emergency services as needed,” Parker said.
Town halls
All town halls are to be postponed until the mask mandate is lifted, Third President Robert Mutchnick said.
State officials reinstated a statewide indoor mask mandate – regardless of vaccination status – in mid-December. Given the sharp increase in reported COVID-19 cases, the order has been extended from Jan. 15 to Feb. 15, until further notice.
Resale report
The average resale price for a unit in Third Mutual in December was $464,252, up from $403,237 in December 2020, according to a VMS staff report. Resales year to date numbered 493, up from 339 the year prior. Sales volume in December was $19.5 million compared with $18.5 million in December 2020.