November 14, 2000p>
MINUTES OF THE REGULAR MEETING
OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION & ARBITRATION
BOARD,
Tuesday, November 14, 2000 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
6:01 p.m.
II. Roll Call
Commissioners Present: Becker; Hobson; Lightner;
Marshall; Mosser; Murphy; Wasserman.
Commissioners not Present: Gruber.
Staff Present: Gartzman; Grubb; Lee; Wolf.
Commissioner Justman appeared on the record
at 6:13 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of October 17, 2000.
MSC: To approve the Minutes of October 19, 2000.
IV. Remarks from the Public
1. Rebecca Graf of the Housing Rights Committee
informed the Board that she was one of the original proponents of Proposition
H, and had been involved in drafting the Initiative. She told the Commissioners
that it had been intended that a Decision be considered "final"
once the appeal process had been completed or the 15-day period for filing
a timely appeal had expired.
2. The landlady involved in the case at 1733 Golden
Gate Ave. (AL2K0177) asked for an extension in order to obtain a Certificate
of Occupancy for the structure.
3. Landlord Scott Hall inquired as to the definition
of "seismic work" under Proposition H. Specifically, Mr. Hall
intends to add a bedroom to several units in his building. Since it will
be more expensive to do so in San Francisco than somewhere with less threat
of earthquakes, could this be petitioned for as allowable seismic work pursuant
to Proposition H?
4. Gerald Sverdlas asked what effect Proposition
H would have on the appeal he was at the meeting about.
V. Consideration of Appeals
A. 445 Webster #1 AT2K0154
The landlords’ petition for rent increases based on
increased operating expenses for 11 of 15 units was granted, resulting in
7% base rent increases for all but 2 units. One tenant appeals the decision
on the grounds of financial hardship. The tenant’s appeal was filed two weeks
late because the tenant is suffering from AIDS.
The Commissioners continued consideration of this
appeal so that staff could write the appellant and request clarification as
to the actual number of tenants residing in the unit and have any additional
adult occupant submit a Hardship Application. Staff was also instructed to
send a copy of the landlord’s opposition to the tenant appeal to the tenant.
Nothing further was received from the tenant.
The tenant filed a petition asking for a rent determination
for a non-comparable unit in the building that he was now living in, having
been evicted from his prior unit for occupancy by the owner. The Administrative
Law Judge found the appropriate rent for the replacement unit to be $976.04,
rather than the $1,350.00 set by the landlord. On appeal, the landlord argues:
that the Board’s authority to set a rent for a vacant unit is preempted by
Costa-Hawkins; that procedures for determination of initial rent for non-comparable
replacement units would have to be enacted by the Board of Supervisors; that
square footage comparison is an inaccurate measure of the value of a rental
unit and does not reflect the pricing of rental units in San Francisco. Consideration
of this appeal was continued from the meeting on November 14th,
because of the lack of two votingTenant Commissioners at that meeting.
The landlord’s petition for a rent increase based
on comparable rents was denied. The landlord’s appeal was accepted and the
case was remanded to determine whether the threshold requirement for a rent
increase based on comparables had been met. The Administrative Law Judge found
that the landlord had failed to prove that the rent was set or kept low or
was increased only negligible amounts, nor had they demonstrated the lack
of a fair return on the building, as opposed to this particular unit. The
landlord appeals the remand decision, asserting that: the amount of rent the
Administrative Law Judge found was charged for the unit when it came under
jurisdiction may not be correct; the appropriate initial rent date for the
unit is 1994, when the tenant’s mother died, instead of 1979, when the unit
first came under rent control; allowing a subtenant to succeed to the benefits
of a controlled rent denies the landlord the benefits of vacancy decontrol;
the landlord is being denied procedural and substantive due process by being
deprived of a fair return on this unit; and the Board’s policies regarding
fair return are not elucidated in the Ordinance or Regulations. Consideration
of this case was continued from the October 17th meeting because
only one voting Tenant Commissioner was in attendance.
The landlord’s petition for extension of time to do
capital improvement work was denied because the Administrative Law Judge found
that the landlords knew or should have known that the work would take longer
than the date originally estimated, but failed to file the petition timely.
Additionally, it was determined that stop work orders issued by the City were
the result of the landlords’ own actions. On appeal, the landlord in attendance
at the hearing, who is not fluent in English, contends that she did not understand
the questions posed to her at the hearing nor does she believe that she was
understood by the Administrative Law Judge. The landlord maintains that the
delays in the work were beyond her control, and that she notified the Rent
Board as soon as it became apparent that the time for the project would exceed
the amount of time granted pursuant to the first Petition of Extension of
Time.
E. 750 Rutland, No. 1 AL2K0173
The tenant’s petition alleging decreased housing services was granted and the landlords were found liable to the tenant in the amount of $4,477.50 due to serious habitability defects on the premises. On appeal, one of the landlords claims that the landlord who received notice of the hearing, his father, does not speak or understand English. He avers that the testimony and evidence introduced by the tenant at the hearing is false and requests that he be granted an opportunity to tell "his side of the story."
The landlords’ petition for certification of capital improvement costs was dismissed due to the landlords’ failure to appear at the properly noticed hearing. On appeal, the landlords allege that they failed to receive notice of the hearing, and attach the requisite Declaration of Non-Receipt of Notice of Hearing.
The tenants’ petition alleging unlawful rent increase was granted and the landlord was found liable to the tenants in the amount of $3,120.00. The Administrative Law Judge had found that the building was not exempt from Rent Board jurisdiction because the Certificate of Occupancy for the structure was not first issued after the effective date of the Rent Ordinance; nor had the landlord met the criteria for exemption from the Ordinance due to substantial rehabilitation of the premises. On appeal, the landlord explains that the unit in which the tenants reside was newly constructed, and a two-story owners’ unit was placed on top of the tenants’ unit in 1978. However, the prior owner never had the construction permits finalized and no Certificate of Final Completion and Occupancy was ever issued for the new structure. The landlord asserts that the City considers the structure to be the equivalent of new construction and requests additional time in which to obtain and provide the new Certificate of Occupancy.
The landlord’s petition for certification of the costs of a new deck to the tenant in one unit was denied. The Administrative Law Judge found that the deck constituted an individual rather than a common area improvement since it benefits only 3 of 49 units. The instant tenant rarely uses the deck; objected to its installation; and the landlord failed to prove that the deck was necessary for health or safety reasons, nor because of excessive maintenance costs. On appeal, the landlord claims that the decision is in error in that the tenant does use the deck; and that the deck is justified for safety reasons, in that it provides a much better escape route in the event of an emergency.
The landlord’s petition for a rent increase based on increased operating expenses was granted, in part. However, a notice of rent increase was determined to be null and void because it was issued prior to the petition having been filed. On appeal, the landlord asserts that: the portion of the rent increase attributable to the 2.9% annual increase is de minimus and should not be rendered null and void because the landlord does not have to petition for approval of that amount; the supplemental property tax expense should be allocated to the year that it was paid, rather than the year it was incurred; and the additional $2.00 amount on the notice of rent increase represented the passthrough of a bond-related property tax increase.
MSC: To accept the appeal and remand the case to the Administrative Law Judge on the record to disallow the operating expense portion of the rent increase but allow the annual rent increase to stand; and, to technically correct the decision to indicate that the increase given on April 1, 1999 could have been in excess of limitations for reasons other than allowable banking. (Lightner/Justman: 5-0)
J. 1301 Leavenworth AL2K0179;
The landlord’s petition for extension of time to do capital improvement work was denied because the landlord failed to file the petition timely although he knew prior to commencement of the work that it would take longer than 90 days. On appeal, the Rent Board Commissioners voted to waive the requirements of Rules Section 12.15(e)(1) under the facts of this case, where it was clearly established that the work would take longer than 3 months to complete, and the landlord was under court order to undertake the work. A remand decision issued which vacated the prior decision and granted the landlord’s petition for extension of time. The landlord appeals the remand decision, claiming that the date granted by the Administrative Law Judge was arbitrary, and unforeseeable circumstances have prevented the landlord from completing the work by that date. One tenant also appeals the remand decision, maintaining: that the Board was not in possession of the relevant facts at the time they waived the Rules and Regulations in this case; and that the landlord and his attorneys are attempting to prevent the tenant’s return to his apartment.
VI. Communications
In addition to correspondence concerning cases on the calendar, the Board received a copy of the appeal decision concerning the case at 123 Sanchez #8 (AT2K0083), which was approved and signed by President Wasserman.
VII. Director’s Report
Executive Director Grubb informed the Board that the contract for performing the Housing Study was signed today with Bay Area Economics.
VIII. Old Business
Fair Return/Implementation of Prop. H
The Commissioners discussed a Memorandum from the Executive Director regarding issues involved in the implementation of Proposition H, which passed on the November 7th ballot and will take effect some time in mid- to late December. Senior Administrative Law Judges Sandy Gartzman and Tim Lee outlined for the Board the many changes to the rent law effected by Prop. H, which provides that landlords may not pass through the costs of capital improvement work unless they can prove that the increase is necessary to ensure a constitutionally mandated fair return. Since seismic work is exempt from this limitation, but there is inconsistent terminology used throughout Proposition H to describe seismic work, the Executive Director will be asking the City Attorney for an opinion as to what constitutes seismic work pursuant to the Initiative. He will also be asking for the City Attorney’s opinion as to what constitutes a "final" decision, since Proposition H applies to any capital improvement work where no final decision had been issued by April 10, 2000. The Rent Board has issued approximately 400 capital improvement decisions after April 10, 2000, there are several dozen capital improvement cases which have been heard but not yet decided, and landlords are currently continuing to file capital improvement petitions without a fair return analysis, some of which include costs for seismic work. Options for dealing with all of the above-mentioned types of cases, as well as tenants’ rights to refunds of any capital improvement passthroughs paid after April 10th, are outlined in the Memorandum from the Executive Director, and will be discussed further at the November 28th meeting. Until the effective date of the legislation, the Rent Board will continue to process capital improvement petitions as usual.
IV. Remarks from the Public (cont.)
5. Landlord Karen Crommie had a capital improvement petition granted in May. Ms. Crommie said that she is prepared to refund amounts paid by her tenant for capital improvement passthroughs, but inquired as to whether doing so would waive her rights in the event of litigation overturning Prop. H.
6. Landlord David Crommie informed the Board that it took 9 months to get a hearing on his capital improvement petition. If the hearing had been timely scheduled, Mr. Crommie would not have been affected by the passage of Proposition H.
IX. Calendar Items
November 21, 2000 - NO MEETING
November 28, 2000
10 appeal considerations
Old Business: Fair Return/Implementation of Prop. H
December 5, 2000
9 appeal considerations
Old Business: Fair Return/Implementation of Prop. H
X. Adjournment
President Wasserman adjourned the meeting at 9:08 p.m.