MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, March 29, 2005 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level
I. Call to Order
Vice-President Marshall called the meeting to order at 6:05 p.m.
II . Roll Call
Commissioners Present: Becker; Gruber; Henderson; Hurley; Marshall; Mosbrucker.
Commissioners not Present: Wasserman.
Staff Present: Gartzman; Lee; Wolf.
Commissioner Justman appeared on the record at 6:07 p.m.; Commissioner Mosser arrived at the meeting at 6:09 p.m.; and Commissioner Murphy appeared at 6:25 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of March 15, 2005.
(Gruber/Hurley: 4-0)
IV. Remarks from the Public
A. Robert Pender of the Parkmerced Residents’ Organization (PRO) reminded the Board that PRO is the oldest continuous tenant organization in San Francisco. Mr. Pender has lived in Parkmerced since 1969. He asked that the Commissioners help the residents of Parkmerced maintain the quiet enjoyment of their units in their remaining years.
V. Consideration of Appeals
A. 1885 Bayshore #B AL050028
The tenant’s petition alleging a decrease in housing services due to the removal of a balcony was granted and the landlord was found liable to the tenant in the amount of $75.00 per month. The landlord, who failed to appear at the hearing, appeals on the grounds that he did not receive the Notice of Hearing, and attaches the requisite Declaration of Non-Receipt of Notice of Hearing.
MSC: To accept the appeal and remand the case to the Administrative Law Judge for a new hearing. (Becker/Justman: 5-0)
B. 467 Waller St. AT050030
The tenants’ petition alleging decreased housing services was granted, in part, and the landlord was found liable to the tenants in the amount of $5,330.00 due to serious habitability defects in the unit. The tenants appeal the decision, apparently maintaining that the rent reductions for inadequate heat and water damage in the unit should have gone back further; and that they proved that the damaged carpet constituted a substantial decrease in housing services.
MSC: To accept the appeal and remand the case to the Administrative Law Judge for a hearing on the issues of the carpet and to determine whether the walk-through scheduled for September 25, 2000 took place and, if so, the appropriate commencement date for the rent reduction granted for inadequate heat. (Marshall/Becker: 5-0)
C. 1801 Turk St. AT050031 thru -37
MSC: To recuse Commissioner Becker from consideration of this appeal. (Marshall/Justman: 5-0)
The landlord’s petition for certification of capital improvement costs was granted, in part. The tenants in seven units appeal the decision on the grounds that the portion of the garage space used for commercial purposes, including rented parking spaces, whether used by a building tenant or a non-resident, should be allocated as commercial costs which are borne by the landlord.
MSC: To deny the appeal. (Gruber/Justman: 5-0)
D. 1801 Turk St. AT050044 thru -50
The landlord’s petition for rent increases based on increased operating expenses was granted, resulting in 7% base rent increases. The tenants in seven units appeal the decision on the grounds that the portion of the garage space used for commercial purposes, including rented parking spaces, whether used by a building tenant or a non-resident, should be allocated as commercial costs which are borne by the landlord.
MSC: To recuse Commissioner Becker from consideration of this appeal. (Marshall/Justman: 5-0)
MSC: To deny the appeal. (Gruber/Justman: 5-0)
E. 33 Broderick St. AL050017 & AT050040
(rescheduled from 3/15/05)
The tenant’s appeal was filed seventeen days late because the tenant did not receive the Decision through the mail.
MSC: To find good cause for the late filing of the appeal. (Becker/Marshall: 5-0)
The tenant’s petition alleging decreased housing services was granted, in part, and the landlords were found liable to the tenant in the amount of $330.00. The landlords appeal, claiming that: the Administrative Law Judge exhibited bias on behalf of the tenant; the tenant’s complaints were made in retaliation for the landlords’ enforcement of the lease; the doorjamb problem was not substantial; the tenant failed to provide access to the unit, which prevented the landlords from making the repairs; the work was completed prior to the date on the invoice; and there is no evidence of a leak in the bedroom ceiling. The tenant also appeals, asking that the Board reconsider the denial of his claims regarding a faulty mailbox and defective rain gutters.
MSC: To deny both the landlords’ and tenant’s appeals. (Becker/Justman: 5-0)
VI. Public Hearing
Ordinance Section 37.9(a)(2)(B) Regarding Additional Occupancy of Family Members
At their meeting on February 1, 2005, the Commissioners passed a motion to put out for Public Hearing proposed amendments to Rules and Regulations Sections 6.15A and B and proposed new Section 6.15D to conform the Rules and Regulations to newly enacted Ordinance Section 37.9(a)(2)(B). This amendment to the Rent Ordinance, proposed by Supervisor Gonzales, allows for specified family members of a tenant and/or domestic partners to occupy the rental unit notwithstanding a lease provision limiting the number of occupants if the landlord has unreasonably denied the tenant’s request to add such occupant. Proposed new Rules Section 6.15D outlines consent procedures modeled after the consent procedures for subletting contained in Rules Sections 6.15A and B, per the intent of the Board of Supervisors, modified to accommodate family situations. At the meeting on February 15, 2005, the Board voted out for Public Hearing additional language providing for a decrease in services remedy for tenants whose landlord has unreasonably withheld consent to a family member or domestic partner. At the meeting on March 1, 2005, the Board voted out additional language which would allow a landlord or tenant to request a Rent Board determination of whether a landlord’s withholding of consent for an additional occupant was reasonable, and providing that any petition for such a determination or for a decreased housing service under this Section shall be expedited.
A Public Hearing on the proposed amendments was convened at 6:35 p.m. Twenty-one individuals addressed the Board, as follows below:
1. Landlord Andrew Long said that the language should specify that it must be a relative of the original tenant, and not of a subtenant or other occupant. Mr. Long speculated that the Ordinance could be used by “apartment hunters” who intend to move in several relatives, and asked that the Board prohibit this during the first twelve months of tenancy.
2. Landlord Leslie Will said that he has always picked his tenants carefully and has always had a compatible group. Mr. Will sees “nothing but problems” with the legislation, including increased costs. Mr. Will wondered how a landlord verifies a domestic partnership and said that five days isn’t long enough for a landlord to conduct the necessary research.
3. Landlord Ruth Wheeler said that landlords have to live up to their rental agreements, but this legislation allows tenants to violate their contracts. Ms. Wheeler believes that the amendments force landlords who live in their buildings to take in strangers, and asked that the Board set the “strictest parameters possible.”
4. Landlord Jeanne Sonnenblick told the Board that she rented to what seemed like a nice tenant, but other tenants subsequently moved in who “trashed the place.” Ms. Sonnenblick hopes that landlords will be able to enforce all rights under their leases and feels that additional “Gonzales” tenants should be subject to Just Cause eviction. Ms. Sonnenblick concluded by saying that being forced to provide more services without compensation is unconstitutional.
5. Landlord David Ferguson admitted that the Board can’t get rid of this law, but said that it’s a “bad law.” Mr. Ferguson is a schoolteacher whose tenants make more money than he does, and he “hasn’t broken even” in five years. Mr. Ferguson believes that people will “break this law right and left.”
6. Ted Lowenberg, President of the Small Property Owners of San Francisco, believes that the Board has the option of amending the Rules to allow landlords to pass on the additional costs he believes will be incurred: he suggested a 33% rent increase for an additional occupant. Mr. Lowenberg analogized that you cannot take additional riders onto Muni for free. He speculated that “a half dozen folks could move in” under this law,” and said that a rent reduction when there’s no reduction in services is “ludicrous.”
7. Landlord David Brownell was worried about increased costs without compensation, since “costs go up faster than rents.” Mr. Brownell said that he is already subsidizing his tenants at the rate of $18,000/year; he doesn’t want to take on his lawyer as a dependent as well. Mr. Brownell also asked that the Commissioners “keep the regulations simple.”
8. Landlord Alex Beck said that she does all the work on the building herself but, with health problems, this is all that she can handle. Added tenants equal more work, for which she feels she should be compensated.
9. Landlord Bill Spencer asked whether the landlord has fourteen or five days to vet an application, and said that five days is inadequate. Mr. Spencer feels that an increase in work accompanies additional occupants, and there should be a provision to recoup costs; that Gonzales occupants shouldn’t be eligible for compensation for OMI or Ellis evictions if they haven’t resided in the unit for at least a year; and that a landlord should be able to terminate the tenancy if a Gonzales occupant violates the lease.
10. Landlord Karen Crommie has no problem with a tenant bringing in a spouse or domestic partner, which she feels is someone’s right, and the problem the legislation was supposed to address. Ms. Crommie suggested that criteria to prove the relationship be established; only the original tenant should be able to bring in additional occupants; and there should be a minimum period of time before a tenant is allowed to bring in additional occupants, even if it’s only six months. Ms. Crommie also thanked the Board for all their unpaid hard work.
11. Landlord John Waldichuk feels that the legislation waives or dilutes his rights as a housing provider, and promotes the “victimization” of tenants. Mr. Waldichuk told the Board that “hundreds” of units are being kept off the market because landlords will refuse to provide housing to tenants not of their choosing. He believes he should be able to examine a tenant’s creditworthiness and character, and asked that what is considered “unreasonable” be spelled out. Mr. Waldichuk said that since the rent is reduced when services decrease, it should increase when additional services are provided.
12. Landlord John Petric asked how the Board of Supervisors could pass legislation that requires increased occupancy without an increase in rents. Mr. Petric feels that the members of the Board of Supervisors don’t even attempt to be fair because there are more tenants than landlords in San Francisco, and they are only interested in garnering more votes. Mr. Petric said that the increase in Ellis evictions is attributable to the Board of Supervisors, because the only way to share in escalating property values is to Ellis and sell the building as TICs.
13. Michelle Horneff-Cohen of the Professional Property Management Association told the Board that she understands that the regulations are a directive from the Board of Supervisors. Ms. Horneff-Cohen asked whether a Gonzales tenant is being made an original occupant if a landlord can only check for creditworthiness if the occupant is liable for rent. She also wondered about additional occupants who are under the age of eighteen.
14. Landlord Kurt Posey told the Board he gave a tenant a $125 break in the rent because he wanted only one occupant in the unit. Mr. Posey is afraid that the tenants downstairs might not like it if there are additional tenants in the upstairs unit, and believes it makes the unit less marketable. Mr. Posey said that this is just one more reason why landlords won’t want to rent anymore, because the building is worth more vacant. Mr. Posey is also a tenant and said that he feels bound by the terms of his lease.
15. Tenant Robert Pender told the Board that when he first applied for an apartment at Parkmerced, Metropolitan Life had a policy of no more than one child in a two-bedroom apartment. Mr. Pender said he went to the ACLU and got this policy changed. Mr. Pender encouraged the Board to let tenants live in apartments with their extended families.
16. Tenant David Lowe said that there are processes in place for landlords to recover additional expenses. Mr. Lowe had requested permission for his boyfriend to move in to his unit. His landlord gave her consent but only at a higher rent; the parties were unable to agree on an amount. He has since married his partner and the landlord has refused consent on the grounds that the Gonzales legislation is unconstitutional. Mr. Lowe’s spouse moved in on March 1 st , and his landlord is no longer accepting his rent.
17. Janan New of the San Francisco Apartment Association told the Board she was not there to blame them for the passage of an illegal law. Ms. New said that her organization is not offering a “fix” because a lawsuit is coming.
18. Tenant Genevieve Callejo said she was “thrilled” that the tenants present had landlords they could communicate with. Ms. Callejo lives at Parkmerced, where she said that existing tenants are being “inundated” with students who party all night long, and where there are as many as nine people in an apartment.
19. Tenant Heather Newbow told the Board that she got married after living in her unit for twenty years. Her lease says the unit is for one person only, and her “extremely rich” landlord would not let her husband move in. Ms. Newbow said that she cannot afford to move and can only afford her apartment because of rent control. She thanked the Commissioners for their “care, concern and work.”
20. Steven Shubert of the Tenants’ Union asked that the Board adopt the language incorporating a decrease in services remedy, since the legislation is currently only an eviction protection. Mr. Shubert depicted the legislation as “moderate and sensible” because there are landlords who will unreasonably withhold consent. Mr. Shubert said that tenants need an option besides court, which is “high stress” and expensive.
21. Ted Gullickson of the Tenants’ Union told the Board that the proposed regs. are “good language” which does what the Board of Supervisors intended. Mr. Gullickson said that passthroughs for landlords are not on the table; that tenants need an avenue besides the courts; and asked that the Board approve the proposed regulations “as is.”
The Public Hearing concluded at 7:20 p.m. After a brief discussion, the Board passed the following motion:
MSC: To pass proposed new Rules and Regulations Section 6.15D and amendments to Sections 6.15A and 6.15B as drafted. (Becker/Marshall: 3-2; Gruber, Murphy dissenting)
The new regulations read as follows:
Section 6.15D Additional Family Members—Where Rental Agreement Limits the Number of Occupants or Limits or Prohibits Subletting
(a) This Section 6.15D applies when a lease or rental agreement includes a clause limiting the number of occupants or limiting or prohibiting subletting or assignment, and a tenant who resides in the unit requests the addition of the tenant’s child, parent, grandchild, grandparent, brother or sister, or the spouse or the domestic partner (as defined in Administrative Code Sections 62.1 through 62.8) of such relatives, or the spouse or domestic partner of the tenant.
(b) If the tenant makes an initial written request to the landlord for permission to add a person specified in subsection 6.15D(a) above, and the landlord fails to respond in writing within fourteen (14) days of actual receipt of written notice, the tenant’s request for the additional person is deemed approved pursuant to Ordinance Section 37.9(a)(2)(B).
(c) The tenant’s inability to obtain the landlord's consent to the addition of a person specified in subsection 6.15D(a) above shall not constitute a breach of the lease or rental agreement for purposes of eviction under Section 37.9(a)(2), where the additional person is deemed approved pursuant to subsection (b) above or where the landlord has unreasonably withheld consent to such additional person. Withholding of consent by the landlord shall be deemed to be unreasonable if the tenant has notified the landlord of the addition of a minor child, or if the additional person is not a minor child, the tenant has met the following requirements:
(i) The tenant has requested in writing the permission of the landlord to the additional person’s occupancy of the unit, and stated the relationship of the person to the tenant;
(ii) The additional occupant, if requested by the landlord, has completed the landlord's standard form application or provided sufficient information to allow the landlord to confirm the relationship of the person to the tenant and to conduct a typical background check, including references and background information; provided, however, the landlord may request credit or income information only if the additional person will be legally obligated to pay some or all of the rent to the landlord;
(iii) The tenant has provided the landlord five (5) business days to process the additional occupant’s application;
(iv) The additional occupant meets the regular reasonable application standards of the landlord, except that creditworthiness may be the basis for refusal of the tenant’s request for an additional occupant only if and when the additional occupant will be legally obligated to pay some or all of the rent to the landlord;
(v) The additional occupant, if requested by the landlord, has agreed in writing to be bound by the current rental agreement between the landlord and the tenant.
(vi) With the additional occupant, the total number of occupants does not exceed the lesser of (a) two persons per studio rental unit, three per one-bedroom unit, four per two-bedroom unit, six per three-bedroom unit or eight per four-bedroom unit, or the number of occupants permitted under state law and/or other local codes (e.g., Planning, Housing, Fire and Building Codes).
(d) Nothing in this Section shall prevent the landlord from providing an additional occupant with written notice as provided under Section 6.14 that the occupant is not an original tenant as defined in Section 6.14(a) and that when the last original tenant vacates the premises, a new tenancy is created for purposes of determining the rent under the Rent Ordinance.
(e) A landlord’s unreasonable refusal to consent to a tenant’s written request for the addition to the unit of a tenant’s child, parent, grandchild, grandparent, brother or sister, or the spouse or domestic partner (as defined in Administrative Code Sections 62.1 through 62.8) of such relatives, or as a result of the addition of the spouse or domestic partner of a tenant, subject to subsections 6.15D(c)(i)-(vi) above, may constitute a decrease in housing services pursuant to Section 10.10 of these Regulations.
(f) In the event the landlord withholds consent to a tenant’s request for an additional person under subsections 6.15D(c)(i)-(vi) above, either the landlord or the tenant may file a petition with the Board to determine if the landlord’s withholding of consent was reasonable.
(g) Any petition filed under subsection 6.15D(e) or (f) shall be expedited.
Section 6.15A Subletting and Assignment—Where Rental Agreement Includes
an Absolute Prohibition Against Subletting and Assignment
This Section 6.15A applies only when a lease or rental agreement includes
an absolute prohibition against subletting and assignment.
(a) For agreements entered into on or after May 25, 1998, breach of an absolute prohibition against subletting or assignment may constitute a ground for termination of tenancy pursuant to, and subject to the requirements of, Section 37.9(a)(2) and subsection (b) below, only if such prohibition was adequately disclosed to and agreed to by the tenant at the commencement of the tenancy. For purposes of this subsection, adequate disclosure shall include satisfaction of one of the following requirements:
(1) the prohibition against sublet or assignment is set forth in enlarged or boldface type in the lease or rental agreement and is separately initialed by the tenant; or
(2) the landlord has provided the tenant with a written explanation of the meaning of the absolute prohibition, either as part of the written lease or rental agreement, or in a separate writing.
(b) If the lease or rental agreement specifies a number of tenants to reside in a unit, or where the open and established behavior of the landlord and tenants has established that the tenancy includes more than one tenant (exclusive of any additional occupant approved under Ordinance Section 37.9(a)(B)(2)), then the replacement of one or more of the tenants by an equal number of tenants, subject to subsections (c) and (d) below, shall not constitute a breach of the lease or rental agreement for purposes of termination of tenancy under Section 37.9(a)(2) of the Ordinance.
Section 6.15B Subletting and Assignment—Where Rental Agreement Contains a Clause
Requiring Landlord Consent to Subletting and Assignment
This Section 6.15B applies only when a lease or rental agreement includes a clause requiring landlord consent to assignment or subletting.
(a) If the lease or rental agreement specifies a number of tenants to reside in a unit, or where the open and established behavior of the landlord and tenants has established that the tenancy includes more than one tenant (exclusive of any additional occupant approved under Ordinance Section 37.9(a)(B)(2)), then the replacement of one or more of the tenants by an equal number of tenants, subject to subsection (b) below, shall not constitute a breach of the lease or rental agreement for purposes of termination of tenancy under Section 37.9(a)(2) of the Ordinance.
V. Consideration of Appeals (cont.)
F. 100 Font Blvd. AL050039
The landlord’s appeal was filed one day late because of a calendaring mistake on the part of the landlord’s attorney.
MSC: To recuse Commissioner Becker from consideration of this appeal. (Marshall/Justman: 5-0)
MSC: To find good cause for the late filing of the appeal. (Henderson/Justman: 5-0)
The landlord’s petition for certification of capital improvement costs to 57 of 153 units was granted, in part, resulting in a monthly passthrough in the amount of $8.41. On appeal, the landlord argues that: the claimed labor costs were proved and should have been fully certified; the woodwork and mirrors in the lobby provide benefit to the tenants and should be certified; the costs of plants and sod have been certified in other Rent Board decisions; labor costs associated with irrigation and landscaping do not constitute repair and maintenance; the plumbing replacement constitutes capital improvement work; stripping, sealing and regraining work is not routine repair and maintenance, nor is the replacement of seats, cushions, mirrors, replacement of directional signs, and irrigation pipelines; and union labor requires that different trades perform different tasks, regardless of the cost to the owner.
MSC: To accept the appeal and remand the case to the Administrative Law Judge on the record only to certify the cost of the replacement of seat and back cushions and covering for the center post of the circular seating area in the lobby; to deny the appeal as to all other issues. (Justman/Henderson: 3-2; Gruber, Murphy dissenting)
G. 355 Serrano Dr. #7-G AT050041
The tenant’s appeal was filed approximately two and one-half years late because at the time the tenant filed a substantive appeal of the decision, he mistakenly assumed that the representatives assisting him had included a hardship claim.
MSC: To find good cause for the late filing of the appeal. (Justman/Marshall: 5-0)
The landlord’s petition for rent increases based on increased operating expenses in this multi-unit complex 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. (Henderson/Marshall: 5-0)
H. 501 Oak St., Apts. 1 & 6 AL050038
Two tenant petitions alleging decreased housing services were granted and the landlords were found liable to both tenants in the amount of $200 per month for loss of garage spaces and $40 per month for one tenant’s loss of storage space. The landlord appeals, claiming that: the tenants did not pay additional rent for the additional housing services; the tenant in unit #1 accepted the landlord’s rent reduction, which was a lower amount; the tenant in unit #6 failed to provide the landlords with access to his storage space; and both tenants have used the services for short periods of time since they were taken away.
MSC: To deny the appeal. (Gruber/Becker: 5-0)
I. 382A Noe AL050029
The landlord’s appeal was filed three days late because the landlord, who failed to attend the hearing due to a calendaring mistake, was confused when she received the decision and spent time calling City agencies and trying to clarify her options.
MSC: To recuse Commissioner Becker from consideration of this appeal. (Marshall/Gruber: 5-0)
MSC: To find good cause for the late filing of the appeal. (Gruber/Justman: 5-0)
The tenants’ petition alleging decreased housing services was granted and the landlord was found liable to the tenants in the amount of $990.00 due to ineffective weatherproofing of windows and doors in the unit, a plumbing backup and a broken window. On appeal, the landlord claims that all of the repair problems have been abated; and the tenants do not call property management when there is a problem, but contact City agencies instead.
MSC: To deny the appeal. (Murphy/Marshall: 5-0)
VII. Communications
In addition to correspondence concerning a case on the calendar, the Commissioners received a copy of the Notice of Public Hearing.
VIII. Director’s Report
Acting Executive Director Delene Wolf reminded the Commissioners that their Statements of Economic Interest are due on April 1 st . She also told the Board that a Writ has been filed challenging the legislation introduced by Supervisor Peskin and passed by the Board of Supervisors increasing the amount of Ellis relocation payments.
IV. Remarks from the Public (cont.)
B. Laura Traveler of PRO told the Board that, in the case at 100 Font (AL050039), the Administrative Law Judge repeatedly asked the landlord for a breakdown of costs. Ms. Traveler said that the landlord at Parkmerced has a track record of not providing requested documentation in capital improvement cases, and has consistently gotten away with not having sufficient evidence. Ms. Traveler also alleged that tenants are being asked to pay for the landlord’s “aesthetic choice.”
IX. New Business
Water and Sewer Bill Increase Passthroughs Resulting from Issuance of Water System Improvement Revenue Bonds (Ordinance §37.3(a)(5)(B))
Senior Administrative Law Judge Sandy Gartzman informed the Board that water bonds related to the passage of Proposition A in November 2002 are being issued and resulting increases in water bills will occur as of July 1 st . Landlords are allowed to pass through to tenants 50% of the increase in their water bills that is attributable to the issuance of these water system improvement bonds, and can do so every month. Staff will develop a worksheet for calculation of the allowable passthrough, and also make a recommendation to the Board as to whether Rules and Regulations will be necessary.
X. Calendar Items
April 5, 2005 - NO MEETING
6:30 April 12, 2005
4 appeal considerations (including 1550 Bay St.)
Old Business: Water & Sewer Bill Increase Passthroughs
New Business: Acting Director Appointment
XI. Adjournment
Vice-President Marshall adjourned the meeting at 8:40 p.m.