October 03, 1995

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

Tuesday, October 3, 1995 at 5:30 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

I. Call to Order

President L. Becker called the meeting to order at 5:35 p.m.

II. Roll Call

Commissioners Present: L. Becker; Gruber; Hayden; Marshall; Nash; Steane.

Commissioners not Present: B. Becker; How; Wasserman.

Staff Present: Grubb; Wolf.

Commissioner Lightner appeared on the record at 5:37 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of September 19, 1995.

(Marshall/Gruber: 4-0)

IV. Consideration of Appeals

A. 2153 Sacramento St. #6 Q001-06R

(cont. from 9/19/95)

The landlords’ petition for certification of capital improvement costs and rent increaqses due to increased operating expenses related to their purchase of the building was approved, in part, by the hearing officer. The tenant in one unit in the building appealed on the basis of financial hardship; this claim was continued from the meeting on September 19th because of a possible settlement between the parties.

MSC: To accept the agreement of the parties and find sufficient hardship to warrant deferral of the capital improvement passthrough to this tenant unless and until the tenant’s financial circumstances should change.

(Marshall/Hayden: 5-0)

B. 1097 York St. #3 Q001-06A

The tenant filed a Summary Petition alleging an unlawful increase in rent, which was later set for hearing. In the Decision of Hearing Officer, the landlord was found liable in the amount of $5,220.00 due to rent overpayments. On appeal, the landlord asserts that he and the tenants had operated in reliance on a letter from the former Deputy Director of the Rent Board regarding the proper base rent amount, and that he should not now be held liable for her mistake.

MSC: To deny the appeal. (Hayden/Marshall: 3-2; Gruber, Lightner dissenting)

C. 1635 Gough St. Q001-13R & Q001-07A

The landlords’ petition for certification of capital improvement costs was granted, in part, by the hearing officer. Because of the 10% annual "cap" on increases due to capital improvement costs, the amount of $11.04 will be carried forward for one tenant; this tenant appeals the decision on the basis of financial hardship. The landlords appeal on the grounds that the hearing officer should have granted an interest rate equal to or greater than that which the landlords are paying to finance the work; and the 10% "cap" should be waived in this case, because the landlords are receiving no return on the property. Prior to the meeting, the landlords submitted a request for postponement of consideration of their appeal, because they had not received the Notice of Appeal Consideration and therefore had not submitted a brief on the issues raised in their appeal.

MSC: To recuse Commissioner Lightner from consideration of this matter. (Gruber/Marshall: 5-0)

MSC: To grant the landlords’ request and postpone consideration of their appeal to the October 17, 1995 meeting. (Hayden/Marshall: 4-0)

MSC: To accept the tenant’s appeal and remand the case to a hearing officer on the issue of the tenant’s alleged financial hardship. (Marshall/Gruber: 4-0)

D. 628 Masonic Ave. Q001-14R

The tenant’s petition alleging a substantial decrease in housing services was granted in part and denied in part. The hearing officer found that the landlord was liable to the tenant in the amount of $135.00 for a one-month period of time when the tenant had no access to the garage for parking his vehicle; no on-going reduction in rent was found to be warranted for the tenant’s having been assigned a different, and slightly less convenient, parking space in the garage. The tenant appeals, asserting that he is entitled to use of the entire garage; and that subsequent to the close of the record in this matter, he has procured evidence that proves that he was subject to an unlawful rent increase because the building was not exempt due to having been occupied by an owner of record.

MSC: To accept the tenant’s appeal and remand the case for a new hearing only on the issue of Rent Board jurisdiction with regard to the tenant’s rent history; to deny the appeal as to the decreased housing services claim. (Marshall/Gruber: 5-0)

E. 550 Battery St. #1208 Q001-15R

The landlord’s petition for certification of capital improvement costs was granted. 261 tenants appealed the decision alleging that the allowance of 10% iimputed interest, without any evidence of the actual cost of funds, was an abuse of discretion on the part of the hearing officer. The appeals were accepted and the case was remanded on the question of the source of the funds used by the landlord to perform the capital improvement work. The landlord subsequently provided sufficient proof that the actual cost of the funds was in excess of 10%, and therefore the original decision was upheld as to the allowance of 10% interest. One tenant appeals the Decision on Remand, alleging that the tenants should not have to pay for work that caused a large degree of disruption in their daily lives.

MSC: To deny the appeal. (Gruber/Lightner: 5-0)

F. 149-1/2 Bronte St. Q001-16R

This appeal was withdrawn prior to the meeting.

G. 257 So. Van Ness Ave. Q001-08A

The tenants’ petition alleging unlawful increases in rent was granted and the landlords were found liable to the tenants in the amount of $8,929.76 due to a large rent increase subsequent to major rehabilitation of the building necessitated by the Loma Prieta earthquake. The tenants’ claims of decreased housing services were noted for the record but the tenants did not want rent reductions to be granted because the landlords are experiencing financial difficulties. On appeal, the landlords allege that: there are mistakes as to the rent history in the Decision of Hearing Officer; the rent refund is unfair because at no time did the cumulative rent charged exceed the amount that would have been permitted under the Ordinance; the work done justified a much larger increase than that which was imposed, except that proper procedures were not followed; and the refund constitutes a hardship for both of the partners who own the property.

MSC: To accept the landlords’ appeal and remand the case to the hearing officer on the issue of the correct base rent and landlord hardship. (Marshall/Gruber: 5-0)

H. 8101 Geary Blvd. #103 Q001-09A

The tenant’s petition alleging unlawful increases in rent was granted and the landlord was found liable to the tenant in the amount of $4,411.34 due to an increase given prior to the anniversary date which also included a capital improvement passthrough in base rent for purposes of calculating the annual increase. On appeal, the landlord asks the Board to waive its Rules and allow a 7% increase the landlord would have been entitled to had they waited just 18 more days; and argues the equitable defense of laches since the unlawful increase occurred in 1983.

MSC: To accept the landlord’s appeal and remand the case for a new hearing to consider the equitable defense of laches. (Hayden/Gruber: 5-0)

V. Communications

The Commissioners received a copy of an Annual Summary of All Petitions filed within the last fiscal year.

VI. Director’s Report

Executive Director Joe Grubb informed the Commissioners that the new automated phone system is up and running. He also addressed the causes and some possible solutions to the long-standing problems of timely hearings and decisions, which have recently been exacerbated by the passage of Proposition I, a 20% increase in the number of petitions, several personnel changes in the hearing officer staff, vacations, bereavement and medical leaves. Mr. Grubb and staff are exploring several possible mitigation measures, including the development of a mandatory mediation process, and the Commission will be given on-going progress reports with an eye toward re-examining this issue in February or March of next year.

VII. Old Business

The Deputy Director informed the Commissioners that Deputy City Attorney Mariam Morely is working on a draft memoradum regarding implementation issues and questions pertaining to the recently enacted Costa-Hawkins Bill (AB 1164), which she hopes to address at the October 17th meeting.

VIII. Remarks from the Public

Ted Gullickson of the Tenants’ Union addressed the issue of the current backlog of cases waiting to be heard and strongly urged that more hearing officers be hired, especially in light of additional revenues related to the passage of Proposition I. He also expressed concerns regarding implementation of a mandatory mediation process and asked that the tenant and landlord communities be kept informed as this project develops.

IX. Calendar Items

October 10, 1995 - NO MEETING

October 17, 1995

5 appeal considerations (1 cont. from 10/3/95)

Old Business: Costa-Hawkins Bill (AB 1164)

October 24, 1995

5 appeal considerations

Old Business: Costa-Hawkinds Bill (AB 1164)

October 31st and November 7th, 1995 - NO MEETINGS

X. Adjournment

President L. Becker adjourned the meeting at 7:25 p.m.