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January 19, 1999

January 19, 1999B>

 

 

 

MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,

Tuesday, January 19, 1999 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 6:05 p.m.

II. Roll Call

Commissioners Present: Becker; Bierly; Gruber; Justman; Lightner; Marshall; Moore; Mosser; Murphy; Wasserman.

Commissioners not Present: Mosser; Murphy.

Staff Present: Grubb; Wolf.

Commissioner Gruber appeared on the record at 6:07 p.m.; Commissioner Marshall appeared at 6:10 p.m.; Commissioner Moore at 6:20 p.m.; and Commissioner Justman arrived at the meeting at 6:25 p.m.

III. Approval of the Minutes MSC: To approve the Minutes of January 5, 1999.

(Bierly/Becker: 3-0)

IV. Remarks from the Public Landlord Dennis Breen pointed out what he believes to be an inconsistency in the way that Rent Board policy is applied: in a Decision of Hearing Officer, he was found liable to the tenant for a $.01 overcharge due to "rounding-up", however, the annual allowable rent increase amount is "rounded down" {from 1.74% to 1.7%). V. Consideration of Appeals
A. 1000 North Point St. #1103                             T001-27R
                                                                        (cont. from 12/15/98)

The tenant filed a petition alleging a substantial decrease in housing services, the landlord’s failure to repair and an unlawful increase in rent. The petition was dismissed without hearing due to lack of jurisdiction because the hearing officer determined that the subject building is a non-profit cooperative owned, occupied and controlled by a majority of the residents (Ordinance Section 37.2(r)(2). On appeal, the tenant contended that: the building is subject to the jurisdiction of the Rent Board because it is not under the direct control of a majority of the cooperative residents; it is not occupied as required under the Articles of Incorporation; the rent for the unit may not be directly controlled or regulated by the corporation; and the landlord is not the corporation but, rather, individual shareholders who use their non-profit status to circumvent the Rent Ordinance.

Prior to the meeting, the tenant’s representative had requested a 90-day extension in order to gather evidence to support the tenant’s claim of Rent Board jurisdiction over the building. It was the consensus of the Board members in attendance to continue consideration of this case to the meeting on January 19, 1999, at which time the tenant’s appeal should be complete and no further extensions would be granted. A submission was received at the Rent Board office on the morning of January 19th. Since the landlord’s attorney indicated that he had not received it, it was not considered by the Board.

MSC: To deny the appeal. (Lightner/Gruber: 5-0) B. 1939 Hayes St. #3                                     T001-41R

The landlords’ petition for rent increases based on increased operating expenses and certification of capital improvement costs was granted. One tenant appeals the decision on the grounds of financial hardship.

MSC: To accept the appeal and remand the case for a hearing on the tenant’s claim of financial hardship. (Lightner/Becker: 5-0) C. 3150 Clay St.                                             T001-31A

The landlord’s petition for a 15.2% rent increase based on the Past Rent History of a Newly Covered Unit under Proposition I was granted. However, the hearing officer determined overpayments owing from the landlord to the tenant in the amount of $8,400.00 due to a rent increase from $1,500 to $1,850.00 in November 1996. On appeal, the landlord admits to "being unable to compute percentages", and claims to have imposed the wrongful amount on the advice of Rent Board staff; points out that the unit has been rented at a below market rent for quite some time; and the unlawful increase was the first rent increase in ten years.

MSC: To deny the appeal. (Becker/Marshall: 5-0)
VI. Public Hearing

Proposed Amendments to Rules and Regulations Section 7.14 Concerning Calculation of Imputed Interest on Capital Improvement Costs

A Public Hearing on the issue of amending Rules and Regulations Section 7.14 was convened at 6:20 p.m. and concluded at 6:22 p.m., as only one member of the public was in attendance and asked a question. Currently, for determining the imputed interest rate for capital improvement costs, the Board uses the rates for like years for Treasury Bills as posted on the last day of January in the Wall Street Journal. However, as there is not always a figure available on that date, the Executive Director suggested that the Board instead use the Federal Reserve Statistical Release’s listing of "Selected Interest Rates" for U.S. Treasury instruments called H.15. H.15 contains a wide variety of daily interest rates that are published weekly and are readily accessible through the Federal Reserve’s Web site. The most recent 12 monthly interest rates for both seven and ten year Treasury Securities will be averaged and go into effect each March 1st, in order to coincide with the posting of the annual allowable rent increase rate.
  MSC: To adopt the proposed amendments to Rules and Regulations Section 7.14 regarding the calculation of imputed interest on capital improvement costs, effective March 1, 1999. (Becker/Marshall: 5-0)
 
The landlord Commissioners noted that their vote in favor of changing the calculation method was not an endorsement of the granting of imputed interest only, as opposed to previous regulations which allowed the legal rate of interest (10%) on all capital improvement costs. Commissioner Lightner expressed her belief that the current practice of allowing only the imputed interest rate when capital improvement work is financed with a variable rate loan is unfair. She will draft language to rectify this situation, and this issue will be calendared for the next Board meeting.
VII. Communications In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:

A. A letter from tenant Robert Copeland thanking the Board and staff for their efforts on his behalf in the eviction case against his landlord, George Hoffberg, including their referral of the landlord to the Office of the District Attorney.

B. A letter from Attorney Nancy Lenvin objecting to the Board’s policies with regard to calculation of imputed and variable interest on capital improvement costs.

C. The office workload statistics for the month of November, 1998.

VIII. Director’s Report Executive Director Grubb went over the new copy of the Rent Ordinance which incorporates Proposition G, passed by the voters on the November ballot. Proposition G replaces the prior version of Ordinance Section 37.9(a)(8) in its entirety. The major differences between Proposition G and the prior version of 37.9(a)(8) {inclusive of the Bierman amendments} are that the ownership interest required to evict reverts back to 25% instead of 50%; and only domestic partners are allowed to aggregate their ownership interests in order to achieve the requisite percentage. The Board also briefly questioned the Director about Supervisor Bierman’s proposal to require that a Conditional Use Permit be obtained as a condition of an "Ellis" eviction for removal from the rental market. IX. Old Business Amendments to the Ordinance and Rules and Regulations pursuant to Costa-Hawkins (Civil Code Section 1954.53) will be discussed further with Deputy City Attorney Marie Blits at the meeting on February 2nd. After remaining Costa-Hawkins issues are resolved, the Board will begin to work on amendments to the Rules and Regulations necessitated by the passage of Proposition G. X. Calendar Items January 26, 1999 - NO MEETING

February 2, 1999
 

Old Business:

A. Costa-Hawkins (Civil Code Section 1954.53)

B. Interest Rate When Capital Improvement Work is Financed with a Variable Rate Mortgage

New Business: Budget

XI. Adjournment President Wasserman adjourned the meeting at 7:00 p.m.

Last updated: 10/9/2009 11:26:13 AM