March 03, 1998

Vice-President Wasserman called the meeting to order at 6:05 p.m.

Commissioners Present: Becker; Bierly; Gruber; Justman; Moore; Mosser; Wasserman.
Commissioners not Present: Lightner; Marshall.
Staff Present: Grubb; Wolf.

Commissioner Murphy appeared on the record at 6:20 p.m.

MSC: To approve the Minutes of February 17, 1998.
(Becker/Justman: 4-0)

1. 1369 Hyde St. S001-35A
   (cont. from 2/17/98)

   Nineteen tenant petitions alleging substantial decreases in housing services were granted, in part, and the landlord was found liable for rent reductions to each tenant for a period of time during which one of the two elevators in the building was non-functioning; and for the lack of a resident manager on the premises sufficiently often to accept deliveries on behalf of residents. The landlord appealed, maintaining that: the reliability of elevator service was not substantially reduced during the period that one of the two elevators was not operational, since the functioning elevator had an improved level of emergency response service; granting rent reductions for reduced services during periods when necessary repairs were being performed creates a disincentive for landlords to maintain and upgrade their properties; and there was no evidence that there was a building-wide policy that mangers would accept parcels for residents, rather, this was an occasional and infrequent favor provided by a former manager.

   At their meeting on February 17th, the Commissioners voted to deny the appeal on the issue of the receipt of parcels but continued consideration of the elevator issue in order for staff to report on the status of current litigation in a similar matter. After hearing the briefing schedule for the current court case involving the Golden Gateway complex (Superior Court Case No. 982216), it was the consensus of the Commissioners to indefinitely continue consideration of the issue of decreased elevator service until a decision is reached on a similar issue raised in Golden Gateway.

2. 1399 - 30th Ave. #101 S001-51R
   (cont. from 2/17/98)

   The landlords’ petition for certification of capital improvement costs to the tenants in nine units was granted. One tenant appealed the decision on the basis of financial hardship. Consideration of this appeal was continued from the meeting on February 17th in order for staff to inquire as to the number of tenants residing in the unit and to have any additional occupants fill out the requisite Hardship Application.

   MSC: To accept the appeal and remand the case for a hearing on the tenant’s claim of financial hardship. (Becker/Bierly: 4-0)

3. 1280 Vallejo St. S001-37A

   The tenants’ petition alleging a substantial decrease in housing services due to the landlord’s refusal to allow a replacement roommate was granted, and the landlord was found liable to the tenants in the amount of $3,000.00. On appeal, the landlord asserts that the fact that the rental agreement prohibited subletting but also contained language pertaining to procedures for replacing roommates under Rules Section 6.14 was not confusing to the tenants but, rather, they only raised this contention after being questioned by the hearing officer; the contract entered into by the parties is clear and unambiguous as to its prohibitions against sublet and assignment, and these provisions were never modified or waived; interpretation of the contract must be limited to its language, which is specific as to the prohibition against subletting; and the right to sublet is not a housing service as defined by the Ordinance and, therefore, revocation of that right does not warrant a rent reduction.

   Since the landlord’s attorney submitted a 6-page brief on March 2nd which the Commissioners did not receive prior to the meeting, it was the consensus of the Board to continue consideration of this matter until the April 7th meeting. However, staff was instructed to admonish the attorney that, in the future, such late submissions will not be allowed nor considered.

In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:

1. Letters from the tenant and the landlord’s attorney concerning the eviction case at 1133 Green Street (R007-43E), which was referred by the Board to the Office of the District Attorney and Department of Building Inspection for investigation.

2. A Memorandum from Executive Director Grubb to Interested Parties on behalf of the Rent Board, Department of Building Inspection and Office of the City Attorney asking for recommendations regarding the use of card key security systems in response to a resolution introduced by Supervisor Ammiano.

Mr. Grubb reminded the Commissioners that their Form 700 Economic Interest Statements must be filed with the Ethics Commission by April 1st. He also let them know that the Rent Board office will not be fully operational during the week of March 9th due to renovation.

1. Necessary Amendments to the Rules and Regulations in Order to Implement Amendments to the Rent Ordinance Pertaining to Owner Move-In Evictions

   Staff informed the Board that the Show Cause hearing on the legality of the recently enacted Moratorium on owner move-in evictions of certain protected classes of tenants has been continued to March 25th. Consideration of possible methods of implementing disability determinations pursuant to the legislation was therefore continued.

2. Rules and Regulations Section 6.13

   The Board discussed a staff proposal to amend the language of Rules Section 6.13 to make it clear that rent increases for newborns and any other additional occupants in a unit are unlawful. The proposed amendment is for clarification purposes only, and does not constitute a substantive change in the law.

   MSC: To put proposed clarifying amendments to Rules and Regulations Section 6.13 out for Public Hearing. (Becker/Justman: 5-0)

Variable Rate Interest Loans for Capital Improvement Work

The Board discussed the policy considerations that come into play when capital improvements are financed with a variable, as opposed to fixed, rate loan. The consensus of the Board was that the landlord should use the rate in effect at the time of filing the petition for certification. However, present policy is that the fluctuations of a variable rate loan result in no actual interest rate being established, and the landlord is held to the imputed interest rate. Since that rate is often less than the lowest, teaser rate on the variable, there can be an inequitable result. Several alternative methodologies were proposed, and Commissioner Murphy volunteered to draft a proposed regulation using the prime rate for these kinds of cases.

March 10 & 17, 1998 - NO MEETINGS

March 24, 1998
6:00 Public Hearing: Proposed New Rules and Regulations Section 6.15 and Clarifying Amendments to Rules and Regulations Section 6.13

March 31, 1998 - NO MEETING

Vice-President Wasserman adjourned the meeting at 7:20 p.m.