June 18, 1996
MINUTES OF THE SPECIAL MEETING OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION &
ARBITRATION BOARD,
Tuesday, June 5, 2001 at 6:00 p.m. at
CITY HALL, ROOM 408
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; Wasserman.
Staff
Present: Grubb;
Wolf.
Commissioner
Mosser appeared on the record at 6:30 p.m.; Commissioner Murphy arrived at the
meeting at 6:36 p.m.
III. Approval
of the Minutes
MSC: To
approve the Minutes of May 15, 2001.
(Becker/Gruber: 5-0)
IV. Remarks
from the Public
Mavel
Hussan expressed her fear that, were the Board to pass proposed Rules Section
1.21, tenants would be in danger if they did not sleep in their unit every
night.
V. Consideration
of Appeals
A. 1200
Taylor #18 & #4 AT010098
& -99
The
landlord’s petition for rent increases based on increased operating expenses
and certification of capital improvement costs to 12 of 16 units was
granted. The tenants in two units
appeal the decision as to the capital improvement passthrough and the operating
expense increase. Pursuant to the
Moratorium on processing of capital improvement passthroughs, only the appeals
as to the operating and maintenance expense increase are currently at
issue. The tenants in unit #18
claim that: any increases granted
should not apply to them because they were served notice of the hearing under
an incorrect name; the landlord was allowed to supplement the evidentiary
record after the hearing with invoices that the tenants did not have an
opportunity to refute; the increase in management fees was not the result of
any increased services to the tenants; and the landlord’s out-of-pocket costs
have actually decreased, as have services rendered to the tenants in the
building. The tenants in unit #4
assert that the landlords are not entitled to an increase based on increased
debt service costs pursuant to Rules Section 6.10(g).
MSC: To recuse Commissioner Becker from consideration
of this appeal.
(Marshall/Gruber: 5-0)
MSC:
To deny both appeals.
(Lightner/Gruber: 4-1;
Hobson dissenting)
B. 1351
– 25th Ave. AL010095
The
tenant’s petition alleging decreased housing services due to noise emanating
from the landlord’s unit, which is upstairs from the tenant’s unit, was
granted. The landlord was found
liable in the amount of $500.00 per month until there is a cessation of the
unreasonable noise coming from her unit.
On appeal, the landlord claims that: the Administrative Law Judge did not consider her testimony
and based his decision on hearsay evidence; the amount granted is excessive;
and the Rent Board cannot assess punitive damages.
MSC:
To deny the appeal.
(Becker/Marshall: 3-2;
Gruber, Lightner dissenting)
C. 138-146
– 6th St. AL010096
Five
tenant petitions alleging unlawful rent increase were granted because the
Administrative Law Judge found that the landlord had failed to prove that the
subject premises is exempt from Rent Board jurisdiction. On appeal, the landlord asserts that:
the premises are exempt because:
an oral agreement existed between the landlord and the California
Department of Corrections to provide housing to former inmates, and the
Department of Corrections is subsidizing some of the tenants’ rents; the
building has undergone substantial rehabilitation, and there is no requirement
in the Rent Ordinance that a landlord file a petition in order to be exempt on
these grounds; the Certificate of Final Completion and Occupancy was issued
after the effective date of the Ordinance, and the building was vacant prior to
that time; and the public policy reason for the exemption, the addition of
units to the housing stock, is satisfied by granting exemption in this case.
MSC:
To deny the appeal.
(Marshall/Becker: 5-0)
D. 2430
Cabrillo AT010101
The
tenant’s petition alleging decreased housing services was denied. The tenant’s claim was that, pursuant
to a 1997 Conciliation Agreement, the landlord fails to expend one full hour
per week on common area maintenance and the premises are therefore in an
unsatisfactory condition. On
appeal, the tenant asserts that:
the Administrative Law Judge exhibited bias on behalf of the landlord;
the landlord’s attorney harassed him at the hearing; the Administrative Law
Judge tried to pressure him into mediating the case, and failed to allow him
time for cross-examination; and he proved his case through pictures, letters
and a credible witness.
MSC:
To deny the appeal.
(Lightner/Gruber: 5-0)
E. 1369
Hyde St. #65 AL010100
The
tenant’s petition alleging decreased housing services due to the removal of
garage space in the building was granted and the landlord was found liable to
the tenant in the amount of $300 per month, the current fair market value of
the parking space. On appeal, the
landlord contends that: the tenant
should not be granted a rent reduction upon removal of the housing service that
is greater than the amount they were paying for the service; the reasons for
the withdrawal of the service are irrelevant to the valuation of that service;
the value of the garage originally constituted 13% of the tenant’s total rent
obligation, but the valuation determined by the Administrative Law Judge
constitutes 21% of the total rent; and, since market value was neither demanded
nor paid for the service, it should not be the amount granted for the rent
reduction.
MSC:
To recuse Commissioner Lightner from consideration of this appeal. (Murphy/Lightner: 5-0)
MSF:
To deny the appeal.
(Becker/Marshall: 2-3;
Gruber, Justman, Murphy dissenting)
MSC:
To accept the appeal and remand the case for a hearing to put in evidence
regarding the intended use of the parking space and to consider the landlord’s
credibility regarding the long-term use of the space. (Justman/Gruber:
3-2; Becker, Marshall dissenting)
F. 265 Fell St. #601 AT010102
The
tenant’s petition alleging decreased housing services was dismissed due to his
failure to appear at the properly noticed hearing. On appeal, the tenant provides evidence that he was ill on
the day of the hearing.
MSC:
To accept the appeal and remand the case for a new hearing. (Becker/Lightner: 5-0)
VI. Public Hearing
At
6:56 p.m., the Board commenced a Public Hearing on proposed new Section 1.21,
which would require that an individual occupy a unit as his or her principal
place of residence in order to be covered by the rent increase limitations of
the Rent Ordinance. 35 individuals
testified as follows below:
1. Mavel Hussan told the Board that the
proposal doesn’t make sense, and constitutes “attempted repression just short
of martial law.”
2. Brook Turner, Executive Director of the
Coalition for Better Housing, said that his organization strongly supports the
proposed regulation. Mr. Turner
read from a description of the proposal posted on the Tenants’ Union web site,
which he said constitutes “vilification and mis-truth.” According to Mr. Turner, in a poll
taken one year ago, 70% of San Francisco tenants said that they do not approve
of rent controlled apartments being used as second homes.
3. Landlord attorney David Wasserman told
the Board that, in Manhattan, there are “tons” of apartments that “folks can’t
afford to give up” because the rents are so low. Mr. Wasserman said that the supply of housing is being held
hostage to non-use and, that if the supply were to increase, rents would go
down.
4. Landlord Gary Briggs told the Board of
three situations that he feels warrant the proposed legislative solution: 1) an individual with a home in Sonoma,
who comes to the City 3 times a week to run his business; 2) the Spreckles
Mansion, which was being used by peninsula residents for cultural forays into
San Francisco; and 3) New York City.
Mr. Briggs said that it is “better late than never.”
5. Landlord Andrew Long supports the
proposal because “if you’re wealthy enough to have two homes, you’re wealthy
enough to pay market rent.” Mr.
Long cited the SPUR Study that estimates that 7,000 rental units are currently
being held off the market.
6. Landlord Peter Euteneuer said that, of
his 47 rental units, 4% or 2 units fall within the category that would be
affected by the proposed regulation.
If the same holds true for most landlords, Mr. Euteneuer believes that a
great number of units will come back on the market. He also said that the transient use of apartments results in
higher costs to be borne by long-term tenants.
7. Tommi Avicolli Mecca of the Housing
Rights Committee wondered what the term “normally returns to” means, and asked
how it will be interpreted. For
example, if he has to go to Philadelphia to care for his sick sister, will he
lose his rent control protections, and will his landlord have to be a spy? Mr. Avicolli Mecca believes that tenants
are treated as “second class citizens” because they cannot afford to buy their
homes.
8. Anthony Schultz supports the proposal
in order to free up units, but said that is “has to work for both sides.”
9. Norman Rolfe said the regulation should
be sent back for clarification; that pied a terres are rare; that unscrupulous
landlords will try and use this to evict; and that there are “questionable
statistics” in the SPUR Report.
10. Landlord Kira
Eldemir said that the Rent Board’s Rules and Regulations have made her rental
agreement with her tenant “null and void.” Ms. Eldemir has one tenant who is an oral surgeon who spends
one and one-half days per week in San Francisco. She asked if this individual needs protection and if she
should be asked to subsidize him or her?
11. Steven
Shubert is opposed because he believes that the proposal provides an incentive
to show that tenants are no longer primary residents of their units. He does not believe that if someone has
to care for an ill parent, they should have to worry about rent control
protection.
12. Landlord
Karen Crommie said that the draft proposal has been worked on, and represents a
“reasonable compromise.” She urged
approval.
13. Tenant
Michael Barrett voiced his opposition based on “unsubstantiated statistics and
speculation.” Mr. Barrett said
that Manhattan is a “totally different situation.”
14. Landlord
Naomi Richen said that the Rent Ordinance is supposed to expand the supply of
affordable housing, and that she “can’t imagine how anyone is opposed.”
15. Tenant Alice
Kostin expressed her fear that low and moderate income tenants could lose their
homes if they had to take care of a sick relative over a long period of time,
or if they were ill and had to return to their parents’ home, since the
proposal doesn’t apply only to individuals with two homes. Ms. Kostin believes that non-English
speaking tenants are at a serious disadvantage at hearings.
16. Janan New,
Director of the S.F. Apartment Association, said that “rich people don’t need
rent control” and that the proposal plugs a loophole that has been abused for
far too long. Ms. New believes
that increased supply will result in lower rents in the long term.
17. Small
landlord Marina Franco said that she experiences very little turnover in her
building and that it is disheartening for the other tenants when someone
doesn’t actually live in their unit.
A “revolving hotel” for some tenants’ friends results in a “lower quality
of life” for everyone in the building.
18. Landlord
Donald Gibbs said that the proposed regulation is well written and that he
supports it. Mr. Gibbs explained
that one of his tenants will be going into a nursing home, and the unit will be
used merely as storage. Mr. Gibbs
feels that, at some point, that unit should return to the market.
19. Landlord Tom
Garber supports the proposal and cited two anecdotes from his experience: a tenant who moved to Pennsylvania over
two years ago and returns to San Francisco only 7-10 days per year to visit
friends; and his cousin, who moved to St. Helena 15 years ago, but comes in to
the City once a month to go to dinner or a play.
20. Landlord Bob
Mayer supports the proposed regulation because “housing should be for San
Francisco residents who need it.”
21. Landlord
Peter Holden expressed conflicting feelings because he has a friend who moved
to New Jersey but keeps a $750 unit to conduct business in San Francisco a few
times a year; Mr. Holden said he doesn’t want to be the reason this individual
is kicked out of his apartment.
Mr. Holden also said that the proposal is “too fair, and too
reasonable”, so the Board “better not do it.”
22. Landlord
Peter Hadiaris is also an attorney who represents tenants, and who is in favor
of the proposal because “pied a terres are taking units off the market.” Mr. Hadiaris believes that working
class tenants have more to gain by freeing up housing.
23. Tenant Sandra
Finnegan spoke against the proposal because of there being no implementation
process. She asked under what
circumstances her landlord could make her prove that her unit was her principal
place of residence, and said that a landlord should have to have “Just Cause”
before being able to invade her privacy.
24. Landlord Paul
Johns said that the proposed regulation is “far overdue”, and cited the
examples of doctors working for Kaiser who have apartments in the City but live
elsewhere.
25. Landlord Sam
Hunt said that he rents to a tenant who lives in Thailand and sublets his unit;
the tenant is only in San Francisco two weeks out of the year.
26. Susan
Kellerman said that the proposed regulation is an “obvious way to get more
units” and urged support.
27. Tenant
Gilbert Herrera, the appellant in the case at 265 Fell #601 (AT010102), told
the Board that he has cancer and HIV and was too ill to call on the day of his
hearing.
28. Cynthia
Arnold of Tenants for Home Ownership supports this “common sense housing
policy.” Ms. Arnold took care of
her ill mother for 5 months and experienced no problems with her landlord, and
said that tenants who travel produce less wear and tear on their units.
29. Tenant
Roberta Callahan said that the proposal “opens a can of worms” and will lead to
snooping by landlords over an “exaggerated problem.” Ms. Callahan believes that it is “part of the game” if a
tenant rents an apartment and then goes somewhere else, and that a landlord
“doesn’t get market for every unit.”
30. Small
landlord Nancy Tucker said that she was “more excited” than she had been at any
other Public Hearing of the Board, because the discussion was about adding to
the housing stock. Ms. Tucker
knows of two units being used as offices, and of situations where tenants have
offered to “sell back their units” for a sum.
31. Tenant George
Buffington said that “landlords arguing for more units is like the fox arguing
on behalf of chicken coops”, and expressed concerns regarding enforcement.
32. Landlord Bill
Quan supports the proposal and said that peoples’ concerns will be addressed in
a hearing.
33. Property
Manager Dan Michael is also a tenant who supports the proposal, because he
“sees the abuses.”
34. Small
landlord David Ferguson said that the pendulum has swung too far on the side of
tenants, and that small landlords are being abused. Mr. Ferguson said that he was a Socialist in college but,
“you’ve gotta grow up.”
35. Michelle
Horneff, President of the Professional Property Management Association, said
that her organization supports the proposal. Ms. Horneff read from a letter in which the tenants, who
live in England, admit that their unit is being used as storage for their
wedding presents.
Upon
the conclusion of the Public Hearing at 8:00, the Commissioners discussed the
proposed regulation. Commissioner
Hobson suggested that the Board eliminate voter registration because it is a
meaningless criteria; he also told the Board that, when taking care of his sick
mother, he had to come back to his apartment once a month in the face of his
landlord’s allegations that he was no longer living there. Commissioner Marshall raised a concern
that many owners will give notice of a rent increase on this ground, knowing
that many tenants will simply pay the increase or move, whether or not the
increase is warranted. She suggested
that the landlord should have to file a petition prior to giving the notice of
rent increase; if approved, the increase would be retroactively effective as of
the effective date of the landlord’s notice. Commissioners Lightner and Murphy expressed concerns that
there is a due process problem with requiring that a landlord “ask permission
first”, since there is no discovery mechanism in the Rent Ordinance. Commissioner Wasserman referred the
Board to Part 5 of the Rules and Regulations, which provides that a landlord
must petition for a hearing if they seek to impose a rent increase in excess of
limitations. The landlord would
first have to make a prima facie case that the tenant was not a “Tenant in
Occupancy” pursuant to the new regulation, and then the burden would shift to
the tenant to prove that he or she used the premises as their principal place
of residence.
Commissioner
Becker was concerned regarding “ambiguities” in the language regarding which
situations would be covered by the proposed language, and in which temporary
circumstances tenants would still retain their rent control protections. Commissioner Justman indicated that he
wanted to ensure that the regulation affected the situations the Board wanted
to target, and he was willing to entertain suggestions to make clear what was
covered and what was not.
Commissioner Lightner crafted specific language to address Commissioner
Becker’s concerns, which was agreeable to Commissioner Justman. The Board did not specify how long a
tenant could go away to school and still be considered a “Tenant in
Occupancy.” While Commissioner
Justman said that he did not have a problem with someone leaving for up to two
years to further their education, “if it gets up to six, it becomes a
problem.” These questions will be
decided on a case-by-case basis.
Commissioner Marshall was also concerned that the Board not
“inadvertently amend Rules and Regulations Section 6.14.” The Commissioners agreed that nothing
in the new regulation would affect co-tenants or approved sub-tenants who had
not been given 6.14 notices or who were not subject to a Costa-Hawkins
increase. Therefore, if any tenant
who meets the Rent Ordinance definition of tenant resides in the unit as their
principal place of residence, including co-tenants and approved subtenants, an
unlimited rent increase would not be approved pursuant to this regulation.
With
the addition of the requirement that a landlord petition for a rent increase on
this basis, and the additional language referenced above, the Board passed the
proposed regulation pursuant to the below motion:
MSC:
To pass new Rules and Regulations Section 1.21, defining “Tenant in Occupancy”,
as amended, to be effective immediately.
(Lightner/Gruber: 3-2;
Becker, Marshall dissenting)
The
new Section, which pertains to rent increase limitations only, and does not
remove the requirement that there be “Just Cause” for eviction, reads as
follows below:
Section
1.21 Tenant In Occupancy
A
tenant in occupancy is an individual who otherwise meets the definition of
tenant as set forth in Ordinance Section 37.2(t), and who resides in a rental
unit as his or her principal place of residence. Occupancy does not require
that the individual be physically present in the unit at all times or continuously,
but it must be his or her usual place of return. Evidence that a unit is the individual’s "principal place of
residence" includes, but is not limited to, the following elements, a
compilation of which lends greater credibility to the finding of “principal
place of residence” whereas the presence of only one element may not support
such a finding:
(1) the subject premises are listed as the
individual’s place of residence on any motor vehicle registration, driver’s
license, voter registration, or with any other public agency, including
Federal, State and local taxing authorities;
(2) utilities are billed to and paid by the
individual at the subject premises;
(3) all of the individual’s personal
possessions have been moved into the subject premises;
(4) a homeowner’s tax exemption for the individual has not been
filed for a different property;
(5) the subject premises are the place the
individual normally returns to as his/her home, exclusive of military service,
hospitalization, vacation, family emergency, travel necessitated by employment
or education, or other reasonable temporary periods of absence.
Section 5.10 Who must file
Landlords
who seek to impose rent increases which exceed the rent increase limitations
set forth in Section 4 above, must petition for an arbitration hearing. Landlords who seek a determination that
a tenant is not a tenant in occupancy pursuant to Section 1.21 above must
petition for an arbitration hearing prior to issuing a notice of rent increase
on such grounds. Any petition
seeking a determination that a tenant is not a tenant in occupancy shall be
expedited.
VII. Communications
In
addition to correspondence regarding the subject of the Public Hearing and
cases on the appeals calendar, the Commissioners received the following
communications:
A. Office workload statistics for the
month of April, 2001.
B. A current list of Rent Ordinance
amendments.
C. The annual report to the Board of
Supervisors on the number of eviction notices filed with the Department.
VIII. Director’s
Report
The
Board welcomed back Executive Director Joe Grubb. Deputy Director Delene Wolf informed the Commissioners that
the hearing in the case of Quigg v. S.F. Rent Board has been continued
until June 13th at 9:30 a.m. in Dept. 302 of Superior Court.
IX. Old
Business
A. Goodwin v. Rent Board (Superior Court Case No. 317339
The
Deputy Director informed the Board that Judge Garcia granted the landlord’s
Writ on April 30, 2001. While the
Judge did not specifically order that the Board grant the landlord 7% rent
increases based on increased operating expenses, the only basis for disallowing
the increases was found not to be warranted by the Judge. In order that the landlord not pursue a
constitutional challenge to the 7% limitation on operating and maintenance
expense increases, the Board passed the below motion:
MSC:
Pursuant to the Court Order in Superior Court Case No. 317339, to remand the
case on the record to the Administrative Law Judge to grant the landlord’s
petition for 7% rent increases based on increased operating expenses. (Gruber/Lightner: 5-0)
B. Proposed New Rules Section 6.15C(3), Requiring that a Master
Tenant Pay a Pro-Rata Share of the Rent
Discussion
of this proposal was continued to the June 19th meeting.
X. Calendar
Items
June 12, 2001
- NO MEETING
June 19, 2001
6 appeal
considerations
Executive
Session:
Larsen v. Rent
Board (Superior Court Case No. 319390)
Old
Business: Proposed New Rules
Section 6.15C(3)
Pursuant
to Rules Section 2.18, and due to the July 4th Holiday, the Board
voted as follows below:
MSC:
To waive Rules and Regulations Section 2.13(a) and not schedule a Board meeting
on the 1st Tuesday in July, which is July 3rd. The first meeting of the Board in July
shall be on July 10th.
(Gruber/Justman: 5-0)
XI. Adjournment
President
Wasserman adjourned the meeting at 10:00 p.m.