To view graphic version of this page, refresh this page (F5)

Skip to page body

May 20, 1997

May 20, 1997B>

 

 

 

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

Tuesday, May 20, 1997 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

  1. Call to Order

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

  2. Roll Call

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

    Commissioners not Present: Bierly.

    Staff Present: Gartzman; Grubb; Wolf.

  3. Approval of the Minutes

    MSC: To approve the Minutes of May 6, 1997.
    (Marshall/Palma: 5-0)

  4. Consideration of Appeals

    1. 1169 Market St. R002-16R thru -18R

      Three tenant petitions alleging unlawful increases in rent were denied because the hearing officer found that the subject units, ballroom space reconfigured for residential use, are exempt from Rent Board jurisdiction because they constitute "new construction" as defined in Rules and Regulations Section 1.17(e). On appeal, the tenants assert that: Rules Section 1.17(e) must be read in conjunction with Ordinance Section 37.2(p)(5), which together require that the new units be newly constructed and located in a structure for which a Certificate of Occupancy was first issued after June 13, 1979, which is not true in the instant case; fairness requires that all units within a building have the same rent control status; the new units are not located in a separate structure, but were built within the envelope of the existing structure; and, since the landlord always believed that the units were under rent control, exemption from the Ordinance was not a motivating factor in their construction.

      MSC: To recuse Commissioner Gruber from consideration of this case. (Becker/Palma: 5-0)

      MSC: To recuse Commissioner Murphy from consideration of this matter. (Becker/Mosser: 5-0)

      MSC: To deny the appeals. (Lightner/Mosser: 3-2; Becker, Marshall dissenting)

    2. 930 Sutter St. R001-56A & R002-20R

      The landlord’s petition for certification of capital improvement costs to the tenants in 11 out of 49 units and rent increases based on increased operating expenses to the tenants in 7 units was granted, in part. One tenant appeals the decision, claiming that he failed to receive the Notice of Hearing and raising questions concerning a non-operational water heater; whether elevator repairs benefit him since he resides on the first floor of the building; and stating that he should not pay for items for which the landlord receives tax deductions. The landlord also appeals, asserting that: the hearing officer erred in assuming that the petition was withdrawn as to the tenants in two units; the hearing officer should have allowed an "interest only" calculation for the debt service expense category; the supplemental property tax bill was improperly prorated over an entire year, when the tax rate only increased as of the date of sale of the property; and the Year 2 figures in the maintenance and repair categories on Table 1 are incorrect.

      MSC: To deny the tenant’s appeal. However, if the tenant has suffered a substantial decrease in housing services due to a non-operational water heater, he is advised that he may file a petition requesting a commensurate rent reduction. (Gruber/Lightner: 5-0)

      MSC: To deny the appeal on the issue of debt service; to accept the appeal and remand the case to the hearing officer on the record to prorate the supplemental property tax bill only for the portion of the year after which the tax rate had increased; to technically correct the figures in the Year 2 maintenance and repair categories on Table 1; and to add the two units (#107 and #501) improperly deemed to have been withdrawn from the petition. (Marshall/Becker: 5-0)

  5. New Business

    Senior Hearing Officer Sandra Gartzman presented and discussed proposals for certain procedural changes, specifically:

    1. Administrative Dismissal of Landlord Petitions

      Currently, Rent Board staff spends a great deal of time reviewing, hearing and deciding operating and maintenance and comparables petitions which are defective and/or incomplete due to inadequate documentation. Some months ago, the Commission approved, in principal, regulations providing for administrative dismissal of such petitions, similar to regulations already in place for capital improvement petitions (Rules and Regulations Section 7.17). Draft administrative dismissal regulations were provided to the Board which will be reviewed, discussed at the next meeting, and possibly put out for Public Hearing.

    2. Minute Orders

      In order to expedite the timely issuance of hearing officer decisions, an Expedited Hearing Process was implemented in 1992. However, the process has not been widely used due to certain limitations codified into law and the great degree of cooperation that is required between the parties. In order to capitalize on the advantages of the expedited process and avoid its shortcomings, the Hearing Officer staff has proposed offering petitioners the option of a "Minute Order". The Minute Order would be issued within 10 days of the hearing and would be similar to an Expedited Hearing Order; there would be no appeal. Within 15 days, however, either party could request that a full decision be issued, with current appeal rights. The Commissioners requested that feedback regarding this proposal be solicited from the tenant and landlord communities; Ms. Gartzman will draft informational materials for this purpose for the Board’s approval. This issue then be re-calendared for discussion and possible implementation as a Pilot Program.

    3. Appraiser for Comparables Petitions

      The increased volume and complexity of comparables petitions has created problems for parties attempting to obtain adequate evidence regarding comparable rents for long-term tenancies, and for hearing officers adjudicating these cases. The concept of utilizing the services of an appraiser, similar to the independent estimator in capital improvement cases, will be discussed at the next meeting.

  6. Appeal Hearing

    2714 Webster St. #3 Q001-55A
    (acpt. 6/4/96)

    The landlord’s petition for a rent increase based on comparable rents for the subject unit was denied because the hearing officer found that the landlord failed to meet his burden of proof in justifying the amount of increase requested. The landlord was also found liable to the tenant in the amount of $14,500.00 due to unlawful rent increases. On appeal, the landlord maintained that: he was being penalized for an act of charity, in that the tenant’s occupancy was supposed to have been temporary, while the tenant was recovering from an illness, and the sums collected represented expense reimbursement rather than rent; the decision violated the Evidence Code in that the only evidence in the record was the testimony of the landlord’s expert witness, which was not countervailed by the tenant; and, by disallowing the establishment of a near market rent for the unit, the decision denied the landlord of a reasonable return on his investment and constituted an unlawful taking of his property in violation of the United States and California Constitutions. At their meeting on June 4, 1996, the Board voted to remand the case for a new hearing on the issue of comparables and to hold a Board hearing on the issue of the rent overpayments. The Board hearing was stayed pending the issuance of a remand decision on the comparables claim.

    The Decision of Hearing Officer on Remand granted a rent increase based on comparables from the corrected base rent amount of $400.00 to $976.24. The tenant appealed the remand decision, asserting that the hearing officer erred in rejecting the tenant’s evidence regarding comparable rents taken from the Tenants Union database and census data, and in finding that the subject unit is not comparable to other units in the building. The tenant also raised a claim of financial hardship and requested a stay of the comparables increase until the overpayment portion of the case was heard before the Board. At the meeting on April 22, 1997, the tenant’s appeal was denied and the Board hearing on the issue of the rent overpayments was, accordingly, scheduled.

    The appeal hearing commenced at 7:45 p.m. At that time, the following motion was made:

    MSC: To recuse Commissioner Moore from consideration of this case. (Becker/Mosser: 5-0)

    In attendance was the landlord, accompanied by his attorney, and the tenant, representing himself. At the commencement of the hearing, the parties stipulated as to the rent history and the amounts that the tenant has been paying to the landlord. Testimony focused on the unusual circumstances surrounding the inception of this tenancy and the equities on both sides. After offsetting amounts due to the landlord from the tenant for reimbursement of the approved comparables rent increase from the overpayment amount owing to the tenant, it appeared that the sum of $3,025.20 remained owing to the tenant from the landlord. After the conclusion of the hearing at 9:00 p.m., the parties were given an opportunity to settle this matter, but did not do so. After discussion, it was the consensus of the Board that, due to laches and other equitable considerations, there should be no exchange of funds between the parties. Staff will draft a proposed decision for approval by the Board at a future meeting.

  7. Consideration of Appeals (cont.)

    1. 60 Leavenworth St. #34 R001-54A

      The tenant’s petition alleging serious habitability problems in the subject unit was granted and the landlord was found liable to the tenant in the amount of $1,305.00 due to leaking pipes in the kitchen sink; a large hole in the bathroom ceiling, allowing in waste water from the upstairs unit; a leaking refrigerator; and cockroach and rodent infestation. On appeal, the landlord claims that the sums granted are excessive because all of the items in the Notice of Violation had been corrected by the time of the hearing; that there are too many people residing in the unit; and that the tenant had people lie to the inspector, which prevented him from obtaining evidence that the conditions had been abated.

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

    2. 505 - 36th Ave. R001-55A

      The tenant’s petition alleging an unlawful increase was rent was granted, in that the amount imposed was in excess of legal limitations. However, the hearing officer determined that there had not been two rent increases within a 12-month period, because the first increase was due to an additional housing service (parking). The landlord appeals, questioning the inclusion of the parking space with base rent; asking whether parking spaces are regulated and, if so, inquiring as to the amount of allowable increases on garage space; and inquiring as to why he must file a comparables petition for rent increases not imposed during a period of time when the building was exempt due to owner-occupancy.

      MSC: To deny the appeal; staff will write an explanatory letter in response to the questions raised in the landlord’s appeal. (Becker/Marshall: 5-0)

  8. Communications

    In addition to correspondence concerning cases on the calendar, the Commissioners were provided with a copy of the Order in the case of Larsen v. Rent Board (Superior Court No. 979777).

  9. Director’s Report

    Executive Director Grubb reported as follows:

    1. The Rent Board’s Web site on the Internet continues to have the highest use among City departments, with 5,200 "hits" last month.

    2. At the request of members of the landlord community, a change has been made in the automatic transfer function on the "Information To Go" voice mail line. Previously, an individual could be transferred from the script regarding "Repairs" directly to the Department of Building Inspection. It was felt that, on the one hand, the Rent Board counsels communication in its recorded message while on the other hand, facilitating the filing of complaints against landlords by tenants. The automatic transfer function now connects the individual with the "Outreach Program", a collaborative effort between the S.F. Apartment Association, the Department of Building Inspection, St. Peter’s Housing Committee and the Housing Rights Committee.

    3. The Commissioners were reminded that they are eligible for benefits provided to City employees, and that the "Open Enrollment" period will end at the end of May.

    4. This year, raises for the Executive and Deputy Directors will be tied to performance. Mr. Grubb will be evaluating Deputy Director Wolf and the Commissioners will be asked to provide an evaluation of Mr. Grubb.

  10. Remarks from the Public

    Commissioner Moore, who had been recused from participation in the appeal hearing concerning the case at 2714 Webster St. (Q001-55A), expressed his belief that the Commissioners had acted in flagrant disregard of the law during their deliberations on this matter.

  11. Calendar Items

    May 27, 1997 - NO MEETING

    June 3, 1997 - NO MEETING (Election Day)

    June 10, 1997

    4 appeal considerations

    Old Business:

    1. Proposed Procedural Changes

    2. 2714 Webster St. (Q001-55A) (heard May 20, 1997)

    3. 1077-1081 Ashbury/1038 - 1042 Clayton (R001-80R thru -84R)
      (heard May 6, 1997)

  12. Adjournment

    President Lightner adjourned the meeting at 9:40 p.m.

Last updated: 10/9/2009 11:26:14 AM