Shear Wall Footing Strap
The arrow is pointing to a shear wall strap that
goes in to the concrete footing. This strap nails to the corner of the
wall and helps to reinforce the building in case there are is an
earthquake or strong winds.
These straps are made from galvanized metal and as you can see this one is starting to rust. Don't assume that galvanized metal will not rust over time or with the right conditions.
This metal strap is starting to rust because, it has had plenty of moisture over the years and is located in a relatively shady corner of the house.
Without the sun heating up this wall, the moisture can sit in the wood for long periods of time. This moisture can attract termites or cause wood rot to the framing.
As you can see in the picture above, the wood cedar shingles were removed because they were damaged and will need to be replaced.