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May 01, 2001

May 01, 2001

 

 

MINUTES OF THE REGULAR MEETING OF

THE SAN FRANCISCO RESIDENTIAL RENT

STABILIZATION & ARBITRATION BOARD,

Tuesday, May 1, 2001 at 6:00 p.m. at

25 Van Ness Avenue, Suite 70, Lower Level

    I. Call to Order

    President Wasserman called the meeting to order at 6:15 p.m.

    II. Roll Call

                  Commissioners Present: Aung; Becker; Gruber; Hobson; Justman; Lightner; Marshall; Mosser; Murphy; Wasserman.

                  Staff Present: Helton; Lee; Wolf.

    III. Remarks from the Public

      A. Landlord Jon Bumgarner spoke to the definition of "tenant" in the Ordinance because one of his tenants is a German citizen living and working in Germany. This individual has attempted to illegally sublet on three occasions, and the unit is "below market."

      B. Tenant Jose Morales noted that the room was not large enough to accommodate the number of people in attendance and said that the public should be allowed to testify before the Board conducts its regular business.

      C. Tenant Ernestine Weiss informed the Commissioners that the Golden Gateway complex rents units to corporations for use as short-term rentals, and said that the Board should "stop this practice."

      D. Landlord Ida Rachael told the Board she needs help with an on-going problem with one of her tenants. Ms. Rachael said that the tenant’s allegations of wrongful eviction were a "lie", and she doesn’t agree with the rent reductions that were granted for decreased housing services.

    IV. Consideration of Appeals

    A. 34 Sixth St. #317 AT010045

    The tenant’s petition alleging decreased housing services was dismissed due to her failure to appear at the properly noticed hearing. On appeal, the tenant claims that she and her representative misinterpreted the Notice of Hearing, and believed the hearing to concern other claims which she had previously settled with the landlord.

          MSC: To accept the appeal and remand the case for a new hearing. (Becker/Marshall: 5-0)

    B. 135 Sixth St. #410 AT010044

    The tenant’s petition alleging decreased housing services due to a leaky roof and damaged ceiling was granted on remand, and the landlord was found liable to the tenant in the amount of $200.00. On appeal, the tenant maintains that the amount granted is insufficient compensation; and the landlord made several untruthful statements at the hearing.

          MSC: To deny the appeal. (Lightner/Gruber: 5-0)

    V. Public Hearing: Ellis Rescission

    The Board has been discussing the problem of owners rescinding Ellis notices of withdrawal prior to the recording of a Notice of Constraints against the property. By so doing, an owner is free to re-rent the vacated units at market rent, thereby obtaining the benefits of an Ellis eviction without any of the burdens. In the past, it had been staff’s practice to allow an owner to rescind an Ellis notice of withdrawal in two circumstances: 1) after the effective date of withdrawal, only upon a showing that one or more of the existing tenancies was continuing; and 2) prior to the effective date of withdrawal, without any showing as to the status of the existing tenancies.

    At the Board meeting on March 20th, the Commissioners debated the question of how many units should be required to remain in place in order to allow rescission, and whether the amount of money the displaced tenant received pursuant to settlement with the landlord should make any difference. As there was no consensus on this question, Senior Administrative Law Judge Tim Lee was asked to draft a new administrative policy without specifying the number of units.

    At the April 3rd meeting, the Board discussed a Memorandum prepared by Mr. Lee and Senior Administrative Law Judge Sandy Gartzman, which outlined three options: 1) after a Notice of Intent to Withdraw has been filed, the notice may not be rescinded unless the owner proves that none of the existing tenancies were terminated as a result; 2) rescission would be allowed if not all of the existing tenancies were terminated; or 3) rescission would be allowed if a certain percentage of the existing tenancies, to be decided by the Board, were terminated as a result of the Ellis filing. Considering the lack of unanimity on the Board for any of the approaches, and the complexity of the issue, the Commissioners decided to obtain input from the public and practitioners in this area. In addition to the three options outlined in the Memorandum from staff, a fourth option was added, which would require that at least one of the existing tenancies remains in place and all other tenancies vacated pursuant to a fair settlement.

    The Public Hearing on the four proposed administrative policy options regarding the circumstances in which rescission of an Ellis filing would be allowed commenced at 6:30 p.m. and concluded at 7:48 p.m. Thirty-six individuals addressed the Board as follows below:

      1. Tenant Jose Morales prayed that we "come to our senses, and not try to maximize profits at the expense of the poor, especially seniors." Mr. Morales believes that the proposed "regulation" will "obliterate rent control and allow landlords to evict to jack up the rent."

      2. Tenant Vince Pietro Matera pointed out that landlords are supposed to be going out of the rental business in good faith. Mr. Matera believes that, if the prior tenant cannot be found, the unit should be re-rented at the prior rental amount. Otherwise, the landlord could collude with a tenant paying market rent and allow only that tenant to remain in the building.

      3. Tenant John Daniels told the Board he was "devastated" when he received an eviction notice. Mr. Daniels believes that title to the building should be clouded immediately and anything less is similar to "declaring bankruptcy and leaving creditors in the lurch."

      4. Janan New of the S.F. Apartment Association expressed her organization’s support for Option 4, and asked that the Board schedule a Public Hearing on the Rules changes proposed by Commissioner Lightner.

      5. Kerrie Evans said that the belief that rent control causes homelessness has been disproved by the Tucker Study, which proved a link between homelessness and good weather.

      6. Tenant Charles Brerwirth supported the statements of John Daniels, saying he is also an artist in a storefront, and thought that there was "some security for folks like him."

      7. Landlord Jon Bumgarner said that he has a tenant who gave notice and is voluntarily vacating. Mr. Bumgarner said that, economically, he would be better off leaving 2 units empty if he is thinking about selling the building within 4 years.

      8. Tenant Larry Roberts lives in a 6-unit building that is for sale. Mr. Roberts told the Board that they should take the needs of the tenant majority in San Francisco into consideration, especially since "this would fail to pass on the ballot."

      9. Tenant Yan Qi Guang said that he is facing an Ellis Act eviction and that his attorney is working on a settlement with the landlord. Mr. Guang asked that the Board not pass something that would interfere with his settlement.

      10. Tan Chau of the Chinatown Community Development Center said that his organization bought the building at 665 Clay Street in order to preserve affordable housing after Ellis notices had been given by the prior owner. Mr. Chau told the Board that, if Option 1 passed, they would not have been able to buy the building, and suggested Option 3 with 75% of the tenants remaining in place.

      11. Gen Fujioka of the Asian Law Caucus told the Board that he represents tenants and "sees lots of Ellis." Mr. Fujioka said that, in some situations, an owner can be convinced to rescind the Ellis filing and keep tenants in place. Option 1 is therefore a problem because of its "inflexibility."

      12. Tommi Avicolli Mecca of the Housing Rights Committee sees problems with all of the proposals, and suggested that the Board "come up with a way to make #1 work for tenants." Mr. Avicolli Mecca said that 27% of Ellis evictions impact seniors, and 23% are tenants in the Castro District.

      13. Kim Stryker of the Small Property Owners of San Francisco supported Option #4. Ms. Stryker maintained that, since the passage of Proposition I, Ellis numbers have gone up. She pointed out that many small owners are seniors, are possibly disabled themselves, and it is her belief that excessive regulations are forcing them to sell their homes. Ms. Stryker suggested that these decisions should be based on the findings of the Housing Study.

      14. Tenant Ernestine Weiss said that San Franciscans are supposed to be compassionate, but pointed out that seniors with 10 years of tenancy cannot be evicted in New York. She said that seniors should not be dispossessed.

      15. Tenant Philip Brady said that all of the proposals would work against preservation of the housing stock, and that Ellis is a drastic measure which encourages sale of the property rather than keeping units at ridiculously low rents. Mr. Brady suggested that perhaps rent control restrictions are too strict if landlords are taking units off the market.

      16. Landlord Patricia Carter said that she should have the right to do what she wants with her property, including no longer being a landlord. Ms. Carter said that new tenants are paying too much because long-standing tenants are paying too little, and said that we should "do away with inflexible laws."

      17. Landlord Peter Holden said that landlords are getting away from the original intent of the Ellis Act, and it is now "part of a money-making scheme." Mr. Holden believes that Option #4 provides the most flexibility and said that he supports "affordable", not "cheap", rent.

      18. Landlord Kia Eldemir asked what happens if a landlord is on a fixed income. Ms. Eldemir needs to spend $12,000 on repairs to her building’s drainage system, money which she doesn’t have, and she says that if she just uses the unit as a sewing room she won’t have to deal with it.

      19. Steven Shubert is a counselor at the Tenants’ Union who says he’s "never counseled a landlord who’s being evicted." He has, however, counseled "tons" of tenants, especially elderly tenants. Mr. Shubert told the Board that the main purpose of Just Cause grounds for eviction was to prevent evictions in order to increase the rent, but that these proposals would "do just that."

      20. Landlord Andrew Long endorsed Option 4. Mr. Long said that the Ellis Act is "not good public policy", but that people resort to it for many reasons. He suggested that, in order to keep units on the market, make it easy to withdraw Ellis notices.

      21. Landlord Marina Franco, who is on the Board of the S.F. Apartment Association, supported Option 4. Ms. Franco pointed out that many tenants get "huge payoffs", whereas in other counties they just get a 30-day notice and no compensation.

      22. Tenant Chris Slingsby expressed his support for the statements of Mr. Shubert of the Tenants’ Union.

      23. Tom Ram of the Small Property Owners of San Francisco spoke of a small landlord who is dying of AIDS but can’t move downstairs in their building; and another landlord just making expenses by cleaning houses. Mr. Ram suggested that funding for the Housing Study be increased to find out the extent of the problem.

      24. Heidi Smith, Tenants’ Union counselor, said that losing one’s home is one of life’s most traumatic events, and that she doesn’t know what to tell tenants who ask her if two months’ free rent is a "good deal."

      25. Cynthia Arnold of Tenants for Home Ownership supported Option #4. Ms. Arnold believes that she should be able to negotiate with her landlord, and that landlords have a right to make a profit. Ms. Arnold contended that the majority of buildings being Ellised have long-term low rent paying tenants, and that tenants should be responsible for their own financial security.

      26. Norman Rolfe said that he originally had supported Option 1 to "deal with chicanery." He also thinks that Option 4 could have some benefits if a "super-majority" is left. Mr. Rolfe feels that if a landlord no longer wants to be a landlord, they should sell the building and provide life-time leases for seniors as a condition of sale. Mr. Rolfe said that "you can’t run over people in the name of property rights."

      27. Tenant Robert Sites said that his building was Ellised two years ago, but that he is "still fighting." Mr. Sites told the Board they would not be enforcing State law if they allowed landlords to evict and re-rent the property: "if a person stays, the property’s not Ellised."

      28. Tenant Roy Levy told the Board not to adopt any policy that would allow a landlord to profit after an Ellis filing. This would constitute a fraudulent practice under the Civil Code, and they would be an "accessory before the fact."

      29. Tenant Todd Curtis thanked the Board for "trying to close the loopholes", but asked that they not adopt Option #4, or he’ll be "out of a home." Mr. Curtis has been threatened with an Ellis eviction by the new owner of his building, and said that he "can’t work out a deal with landlords who lie."

      30. Robert Pender of the Tenants’ Network said that he doesn’t know much about Ellis, but that tenants have the power of the Referendum, which is the best defense.

      31. Tenant Diane Perez-Portello said that she is a single mother with two children. She asked that the Board not allow landlords to raise rents, or she will be out of her home.

      32. Tenant Anastasia Yovanopolous said that the Ellis Act is "onerous" and should be final; the landlord "should think twice." Since "many folks have had to leave the City", a landlord should not be able to change their mind when they’ve "changed peoples’ lives."

      33. Ted Gullickson of the Tenants’ Union said that "this is all about landlords renting at a higher rent", which is prohibited by Ordinance Section 37.9A. Mr. Gullickson told the Board that, legally, they could only adopt Option 1.

      34. Tenant Jean Marsh told the Board that she has received "wonderful help" from the Rent Board over the years. After her landlord filed a Writ in her case, Ms. Marsh feels financially and emotionally beaten down. She told the Board that this affects working people as well as the elderly and disabled, and that her landlord was given the building as a gift, for no consideration.

      35. Tenant Ted Sevringhouse told the Board not to do anything to "dilute tenants’ rights" under Ellis. Mr. Sevringhouse said that many tenants have a "hard time dealing with the stress", and the burden should not be put on tenants to sue for wrongful eviction.

      36. Sarah Menio said that "the City belongs to everyone, not just the affluent."

      37. Landlord Ida Rachael said that landlords have problems as well, and that tenants should have the government supplement their rent. She said that the Board should try and find a balance, since it "works both ways."

    VI. Old Business

      A. Ellis Rescission

    The Commissioners discussed the four options presented, in conjunction with the testimony they received from the public. Commissioner Marshall expressed her support for Option 1, if some flexibility were built in to address the problem raised by the non-profit housing developers in attendance at the hearing. She also pointed out that it is not true that if a landlord rescinds an Ellis filing, they must "wipe out all of the remaining tenancies - they just have to rent the units at the prior level." Commissioner Lightner expressed her concern that some tenants want to be able to make a deal with their landlord when the only option is an Ellis eviction with no compensation. President Wasserman pointed out that nothing the Board does will ever stop the "bluff" Ellis evictions. Commissioner Gruber stated his view that the Ellis Act is not a "mechanism for bluffing"; a landlord shouldn’t be able to "scare someone into making a decision:"; and said there is "no half-way." After further discussion, the Board voted as follows below:

          MSC: To adopt the following policy regarding Ellis Notices filed with the Rent Board on or after May 2, 2001:

                  A Notice of Intent to Withdraw Residential Units from the Rental Market may be rescinded only if the owner proves that none of the existing tenancies was terminated as a result of the Ellis filing, or except under extraordinary circumstances approved by the Rent Board. If an owner claims that the recorded constraints have been fully satisfied and are no longer applicable to the property, the owner can submit supporting evidence and request expungement of the Notice of Constraints, and the Rent Board will determine if expungement is warranted. This administrative policy is subject to change by the Rent Board in the future.

                  (Becker/Marshall: 5-0)

      B. Proposed Amendments to Rules Sections 1.21 and 6.15C(3)

    At the meeting on March 6th, Commissioner Lightner introduced an amendment that would change the definition of "tenant" by adding Rules Section 1.21 to require that a person permanently occupy a unit as his or her principal place of residence. At the meeting on March 20th, the Board requested an opinion from the Office of the City Attorney as to whether such a change would require an amendment to the Rent Ordinance. Prior to their discussion of this issue, the Board voted as follows below:

          MSC: To waive attorney-client privilege as to the April 29th Memorandum from Deputy City Attorney Marie Blits regarding changing the definition of "Tenant." (Gruber/Becker: 5-0)

    Commissioner Lightner began the discussion by outlining several examples where the current Rules and Regulations expand the Rent Ordinance and stating her opinion that this proposal is not outside of the Board’s powers. However, in her Memorandum, Ms. Blits said that such a fundamental change in one of the central terms of the Rent Ordinance would best be effected by amending the Ordinance. Ms. Blits went on to say that the Board might consider addressing part-time occupancy issues by further refining or defining the term "tenant in occupancy" for purposes of the rent increase limitations of Ordinance Section 37.3(a). Commissioner Becker said that Commissioner Lightner’s proposal, while "artfully drafted, constituted an ultra virus endeavor. Commissioner Justman expressed his view that there were valid statutory construction reasons for adding a new Section 1.21, defining "Tenant in Occupancy", and offered some suggested language. This issue will be discussed further at the meeting on May 15th.

    Commissioner Lightner’s other proposal, to add Rules Section 6.15C(3), which would require that a Master Tenant pay a pro-rata share of rent for the unit, will also be discussed at the meeting on May 15th.

VII. Communications

    The Commissioners received several items of correspondence concerning the Ellis Rescission issue.

    VIII. Director’s Report

    Senior Administrative Law Judge Tim Lee informed the Commissioners that Judge Garcia has ruled for the landlord in the case of Goodwin vs. Rent Board (Superior Court Case No. 317339). Mr. Goodwin received 7% rent increases based on the increased property taxes incurred by the estate of the prior owner. When he filed for another 7% increase based on the debt service from his purchase of the property, it was denied by the Administrative Law Judge based on Rules Sections 6.10(e) and (a) as constituting "exaggerated results." Judge Garcia found that since there were two separate transfers of the property, two operating expense increases were permissible. A settlement agreement will be brought to the Board for their approval at the meeting on May 15th.

    IX. Calendar Items

      May 8, 2001 - NO MEETING

      May 15, 2001

      3 appeal considerations

      Old Business: Proposed Amendments to Rules Sections 1.21 & 6.15C(3)

      New Business: Goodwin vs. Rent Board (Superior Court Case No. 317339)

    X. Adjournment

    President Wasserman adjourned the meeting at 10:25 p.m.

Last updated: 10/9/2009 11:26:12 AM