February 26, 2002p>
MINUTES OF THE REGULAR MEETING
OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION & ARBITRATION
BOARD,
Tuesday, February 26, 2002 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
6:15 p.m.
II. Roll Call
Commissioners Present: Aung; Becker;
Gruber; Justman; Marshall; Mosser; Murphy; Wasserman.
Commissioners not Present: Hobson; Lightner.
Staff Present: Gartzman; Grubb; Wolf.
Commissioner Marshall went off the record
at 7:35 p.m.
III. Remarks from the Public
A. Oren Kendall, a tenant involved in a hardship
appeal at 360 Hyde St. (AT020018), distributed a summary and view of the
case and documents substantiating his hardship appeal.
B. Robert Pender, representing the Parkmerced Residents’
Organization, said he was appearing to stand in solidarity with other tenants’
organizations, since all tenants at large complexes are facing the same
problem of being forced out of their homes by "greedy speculators."
C. Arnold Cohn, a tenant at 1550 Bay St. (AT020035),
said that the issue in his case is not one of repairing a building but,
rather, of changing the nature of the building from long-term residency
to short-term, corporate rentals. Mr. Cohn believes that the Decision of
the Administrative Law Judge should be overturned.
D. Robert St. Luccia, a hardship appellant at 270
Turk #909 (AT020075), informed the Board that he is on SSI/SSA and has health
problems.
IV. Consideration of Appeals
A. 360 Hyde St. #103, 402, 403 & 407 AT020017
thru -20
The tenant in unit #403 filed his appeal 8 days late
because he was staying at his sister’s home in the East Bay until the end
of the school semester, and he had a hard time understanding the decision
as English is not his native language.
The landlord’s petition for certification of capital
improvement costs and rent increases based on increased operating expenses
to 30 of 41 units was granted. Four tenants appeal the decision on the grounds
of financial hardship.
MSC: To accept the appeal of the tenant in unit
#103 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Marshall: 5-0)
MSC: To accept the appeal of the tenants in
unit #402 and remand the case for a hearing on the tenants’ claim of
financial hardship; a separate Hardship Application for the tenant’s
wife must be provided by the time of the hearing. (Becker/Marshall:
5-0)
MSC: To accept the appeal of the tenant in unit
#407 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Marshall: 5-0)
MSC: To deny the appeal of the tenant in unit
#403.
B. 1550 Bay St. AT020021 thru -73
The tenant in unit #B125 filed his appeal form 40
days late because he was out of town taking care of his mother who has cancer.
His name is listed on the joint appeal and he is represented by the same attorney
as 47 other tenants.
The tenant in unit #B420 filed his appeal form 15
days late because English is not his native language and he commutes to Los
Angeles for work. His name is listed on the joint appeal and he is represented
by the same attorney as 47 other tenants.
The tenant in unit #C146 filed his appeal form six
days late he was extremely ill and bedridden during the appeal period. His
name is listed on the joint appeal and he is represented by the same attorney
as 47 other tenants.
The tenant in unit #D258 filed her appeal 20 days
late because she is currently working at a seasonal job, and her mail was
not forwarded to her. She is represented by the same attorney as 47 other
tenants.
The prior tenant in unit #D454 filed his appeal 18
days late because he has moved twice since living at the premises, and his
mail was forwarded to him late.
The landlord’s petition for certification of capital
improvement costs, including a large waterproofing project, to 94 out of 241
units was granted in the amount of almost $3,200,000.00. Fifty-three tenants
appeal the decision: 48 tenants are represented by the same attorney, and
filed a joint appeal; 14 tenants (including 9 tenants represented by the same
attorney and 5 unrepresented tenants) filed individual appeals on the grounds
of financial hardship; and one tenant filed an individual appeal (in addition
to filing as part of the joint appeal), maintaining that Rules and Regulations
§7.12(b) (the 6-Month Rule) bars the imposition of the passthrough to
his unit. The tenants filing the joint appeal argue that: the passthrough
is barred in its entirety by Proposition H; a payment schedule should be implemented
because of the length of time it took to process this case, and the resulting
large retroactive amounts owed by the tenants; the capital improvement passthroughs
should be stayed pending the issuance of a decision on pending tenant petitions
alleging decreased housing services; costs for the exterior wall covering
should have been allocated to the commercial, as well as residential, units;
and the ratio of commercial to residential space is not accurately depicted
in the decision. The tenant in unit #C341 asserts that the passthrough should
be barred to his unit by Rules and Regulations Section 7.12(b) because the
landlord had a contractual agreement to buy the building and was already involved
in the setting of the rents at the time he moved in, so the exception to the
6-Month Rule for new owners should not apply; and that it was unfair for the
landlord not to disclose that the waterproofing project was about to be undertaken
prior to the tenant moving in. The tenant in unit #341 also requests that
he be allowed to submit a hardship application should his appeal be denied.
The tenants in the following units appeal on the grounds of financial hardship:
B112; B318; B412; B416; B430; C135; D163; D249; D251; D258; D353; D358; and
D452. The prior tenant of unit #D454 appeals on the grounds of financial hardship
and because he believes that tenants should not be penalized for improvements
that were made without the tenants’ approval.
MSC: To not consider the late submission introduced
by the tenants at the Board meeting on February 26, 2002 (Murphy/Gruber:
3-2; Becker, Marshall dissenting)
MSC: To deny the joint appeal filed by the tenants
on the issues of the applicability of Proposition H, the request to
stay the capital improvement passthroughs pending issuance of a decision
on the decrease in services petitions filed by some tenants, and the
allegation that "exterior wall" costs attributable to commercial
areas in the building were improperly allocated to the residential units.
To grant the joint appeal filed by the tenants and remand the case to
the Administrative Law Judge for a hearing on the issue of allocation
of the costs of installing waterproofing materials between the ceiling
of the commercial units and the floor of the twelve tenant decks above
the ceiling of the commercial units; to determine the use of the old
laundry room space as of the date of the close of the record, or March
30, 2001, for purposes of allocation of those costs; and to establish
a repayment schedule for sums owing from the tenants to the landlord.
(Justman/Marshall: 5-0)
MSC: To deny the individual appeal filed by
the tenant in unit #C341. However, the tenant may file an appeal on
the grounds of financial hardship within 15 days of the mailing of the
Notice of Action on Appeal. (Murphy/Gruber: 4-1; Marshall dissenting)
MSC: To deny the hardship appeal of the tenant
in unit #B112. (Becker/Aung: 5-0)
MSC: To accept the appeal of the tenant in unit
#B318 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenant in unit
#B412 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Justman: 5-0)
MSC: To accept the appeal of the tenant in unit
#B416 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenant in unit
#B430 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Justman: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenants in
unit #135 and remand the case for a hearing on the tenants’ claim of
financial hardship. (Becker/Aung: 5-0)
MSC: To accept the appeal of the tenant in unit
#D163 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Justman: 5-0)
MSC: To accept the appeal of the tenant in unit
#D249 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 5-0)
MSC: To deny the appeal of the tenant in unit
#D251.
MSC: To accept the appeal of the tenant in unit
#D258 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenant in unit
#D353 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenant in unit
#D358 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 5-0)
MSC: To deny the appeal of the tenant in unit
#D452.
MSC: To accept the appeal of the tenant in unit
#D454 and remand the case for a hearing on the tenant’s claim of financial
hardship only. (Murphy/Gruber: 3-2; Aung, Becker dissenting)
C. 1419 Kearny St. AT020015
The landlord filed a petition seeking a determination
as to whether any of the tenants are "Tenants in Occupancy" pursuant
to Rules Section 1.21 and whether the landlords are entitled to a rent increase
under Costa-Hawkins or Rules Section 6.14. The Administrative Law Judge found
that the original tenant does not reside in the unit as his principal place
of residence. Further, there were no other "tenants in occupancy"
at the time the petition was filed. Therefore, a rent increase was found to
be justified under Rules and Regulations §1.21. Additionally, at the
time the notice of rent increase was served, a subtenant resided on the premises
who moved in after January 1, 1996. Therefore, a rent increase was found to
be warranted under Costa-Hawkins. The tenant appeals, claiming that: the Administrative
Law Judge was biased because he knew and had gone to school with the landlord;
enough time was not provided in order to obtain documentary evidence and dispute
evidence entered into the record by the landlord; and the Administrative Law
Judge made inquiries that were irrelevant.
D. 2707 - 20th St. AL020076
The tenant’s petition alleging unlawful rent increase
was granted and the landlords were found liable to the tenant in the amount
of $8,917.00. On appeal, the landlords maintain that: even with the unlawful
rent increase, the tenant paid $7,472 less than the amount deemed fair under
Federal Anti-Inflation Guidelines; it is unfair for the tenant to obtain retroactive
reimbursement when the landlords cannot; the landlords took over payment of
the water bill, for which the tenant had previously been liable; the landlords
improved the unit over the course of the tenancy without passing on any capital
improvement costs; and the outcome of this Decision does not comport with
the stated mission of the Ordinance.
E. 1035 Scott St. #B AT020016
The landlord’s petition for certification of capital
improvement costs to 4 of 6 units was granted, in part, resulting in a monthly
passthrough to the tenants in the amount of $20.22. One tenant appeals the
decision on the grounds that: the replacement of the smoke detectors was unnecessary;
a hole was left in the wall after the removal of the old smoke detector; the
tenants are not benefited by the attic insulation; and the tenant had installed
a new mailbox two months earlier, which was never returned.
F. 270 Turk St. #909 AT020075
The landlord’s petition for certification of the costs
of replacing the elevator
to 55 of 86 units was granted, resulting in a monthly
passthrough to the tenants in the amount of $23.57. One tenant appeals the
decision on the grounds of financial hardship.
G. 757 Leavenworth #205, 402 & 605 AT020078 thru
-80
The tenant in unit #605 filed his appeal three days
late because he has been ill and unable to attend to his mail.
The landlord’s petition for rent increases based on
increased operating expenses was granted, resulting in 7% base rent increases
to the tenants in 24 of 38 units. Three tenants appeal the decision on the
grounds of financial hardship.
MSC: To accept the appeal of the tenant in unit
#205 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 5-0)
MSC: To accept the appeal of the tenant in unit
#402 and remand the case for a hearing on the tenant’s claim of financial
hardship. (Becker/Aung: 4-1; Gruber dissenting)
MSC: To accept the appeal of the tenant in unit
#605 and remand the case for a hearing on the tenant’s claim of financial
hardship.
(Becker/Aung: 5-0)
III. Remarks from the Public (cont.)
E. Robert Pender introduced the new President of
PRO, Vicki Mack, as well as Jacqui Dozier of PRO, and said that they will
be attending future Board meetings.
V. Communications
The Board received several pieces of correspondence
concerning cases on the calendar.
VI. Old Business
A. Proposed Amendments to Rules and Regulations Section
6.10(e)
The Board continued their discussion of a proposed
amendment to Rules Section 6.10(e), pursuant to the Public Hearing held on
October 16th. The proposed language would make it clear that only
an owner who incurred an increase in expenses can file a petition for rent
increase based on those expenses. At the time of the Public Hearing, Commissioner
Lightner expressed a concern that estates are not able to petition for increases
based on the property tax reassessment triggered by the death of the owner
because it takes so long for the supplemental tax bill to be issued by the
City. In order to address this concern, staff proposed the following additional
language:
6.10(e) If a building is refinanced or there is
a change in ownership resulting in increased debt service and/or property
taxes, only the landlord who incurred such expenses may file a petition
under this Section, and only one rent increase per unit based upon increases
in debt service and/or property taxes shall be allowed for each such refinance
or transfer, except in extraordinary circumstances or in the interest of
justice. In no event shall the petition be denied solely due to the subsequent
transfer of the property, unless the successor in interest declines to substitute
in as the petitioner.
Note: Original additions are in single underline.
New additions are in double underline.
The Public Hearing will be on March 19th
at 6:00 p.m.
Discussion of this issue was continued to the March
19th meeting.
Executive Director Grubb went over the proposed departmental
budget for next year, and explained the reasons necessitating the $6.50 increase
for residential units. Commissioner Gruber expressed his concern over an almost
30% increase over last year’s budget. Commissioner Murphy asked if the Department
could exercise discretion over which lawsuits the agency should defend, since
litigation costs due to voter-approved Initiatives and legislation passed
by the Board of Supervisors come out of the department’s budget. Mr. Grubb
explained that the Department is required to pay to defend any challenges
to the Rent Ordinance and that the other cost increases, such as raises negotiated
with City employee unions, are also mandatory and outside of the Department’s
control.
VII. Calendar Items
March 5 & 12, 2002 - NO MEETINGS
March 19, 2002
8 appeal considerations
VIII. Adjournment
President Wasserman adjourned the meeting at 9:15
p.m.