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July 10, 2007

July 10, 2007

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

Tuesday, July 10, 2007 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

I. Call to Order

President Gruber called the meeting to order at 6:10 p.m.

II. Roll Call

Commissioners Present: Becker; Gruber; Henderson; Hurley; Marshall; Mosbrucker; Mosser.

Staff Present: Gartzman; Wolf.

Commissioner Murphy appeared on the record at 6:20 p.m.; Commissioner Justman arrived at the meeting at 6:27 p.m. Commissioner Mosser went off the record at 7:45 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of June 19, 2007.

(Hurley/Marshall: 4-0)

IV. Remarks from the Public

A. Tenant Michael Perlas of Parkmerced (AT070081) told the Board that the Administrative Law Judge's interpretation that the current landlord is not the "same landlord" as meant in Ordinance ß37.8(b)(1)(A) is incorrect. Mr. Perlas objected to the tenants' not having been provided with copies of the landlord's supplementary exhibits on appeal, and he asserted that they did not have sufficient time to respond. Mr. Perlas believes that questions regarding ownership of the complex are still unanswered. He alleged that an interoffice memorandum from a prior employee of Parkmerced is "false and libelous" and requested that it be stricken from the public record. Mr. Perlas believes that equity requires voiding of the decision approving the operating expense increases.

B. Tenant Mukund Venkatachari of Parkmerced (AT070095) echoed many of tenant Perlas' comments. Additionally, Mr. Venkatachari expressed his belief that the calculation periods chosen by the landlord create exaggerated results, particularly in the category of insurance, but in several of the other expense categories as well. Mr. Venkatachari maintained that the increases authorized by the decision are in violation of Rules ß6.10(a).

V. Consideration of Appeals

A. Parkmerced AT070069 thru – 0098

The landlord's petition for rent increases based on increased operating expenses for 1,633 of 3,287 units was granted, in part. The tenants in 19 units appeal the decision, 8 alleging financial hardship and 11 on substantive grounds, as follows below:

FINANCIAL HARDSHIP CLAIMS:

1. 16 Fuente AT070070

The tenant's appeal was filed two weeks late because he did not realize that he could not afford to pay the increase until he received the accounting sent to the tenants by the landlord.

MSC: To find good cause for the late filing of the appeal. (Justman/Gruber: 5-0)

MSC: To accept the appeal and remand the case for a hearing on the tenant's claim of financial hardship. (Marshall/Gruber: 5-0)

2. 226 Cardenas AT070078

MSC: To accept the appeal and remand the case for a hearing on the tenant's claim of financial hardship. (Marshall/Henderson: 5-0)

3. 747 Gonzalez AT070086

MSC: To accept the appeal and remand the case for a hearing on the tenant's claim of financial hardship. (Marshall/Justman: 5-0)

4. 514 Arballo AT070090

The tenants' appeal was filed 16 days late because the tenants had not yet received their accounting from Parkmerced.

MSC: To find good cause for the late filing of the appeal. (Murphy/Marshall: 5-0)

MSC: To accept the appeal and remand the case for a hearing on the tenants' claim of financial hardship. (Henderson/Marshall: 5-0)

5. 41 Pinto AT070094

The tenant's appeal was filed two weeks late because the tenant was not aware he could appeal the decision on the grounds of financial hardship.

MSC: To find good cause for the late filing of the appeal. (Murphy/Henderson: 5-0)

MSC: To accept the appeal and remand the case for a hearing on the tenant's claim of financial hardship. (Marshall/Henderson: 5-0)

6. 344 Serrano AT070105

The tenants' appeal was filed 18 days late because they were not aware there was a deadline for filing.

MSC: To find good cause for the late filing of the appeal. (Gruber/Henderson: 5-0)

MSC: To accept the appeal and remand the case for a hearing on the tenants' claim of financial hardship. (Murphy/Gruber: 5-0)

7. 405 Serrano #10G AT070096

MSC: To accept the appeal and remand the case for a hearing on the tenants' claim of financial hardship. (Murphy/Henderson: 5-0)

8. 405 Serrano #12D AT070098

The tenant's appeal was filed two weeks late because the tenant hadn't yet received the accounting from Parkmerced.

MSC: To find good cause for the late filing of the appeal. (Marshall/Murphy: 5-0)

MSC: To accept the appeal and remand the case for a hearing on the tenant's claim of financial hardship. (Henderson/Marshall: 5-0)

SUBSTANTIVE CLAIMS:

9. 7A Gonzalez AT070072

9 Gonzalez AT070073

3 Gonzalez AT070074

7 Gonzalez AT070075

The tenants in four units appeal the decision on the grounds that: they have experienced decreased housing services, including reduced garbage pick-up, mold, lack of paint, dirty laundry rooms, and overgrown weeds; the annual increase should cover any increased expenses the landlord incurs; noise from resident college students has negatively affected the quality of life at the complex; and there was a power outage for 24 hours.

MSC: To deny the appeals. (Justman/Murphy: 5-0)

10. 100 Font #1K AT070079

The tenant appeals on the grounds that a rent increase should only be given at the time of the tenant's lease renewal.

MSC: To deny the appeal, however, this does not preclude the tenant from filing a tenant petition alleging an unlawful rent increase should she be given the operating expense increase at a time other than her anniversary date. (Murphy/Justman: 5-0)

11. 55 Chumasero #12G AT070081

The tenant appeals on the grounds that: an employee of the new owners also worked for the prior owner, and therefore there is not a new landlord for purposes of the 5-year limitation on operating expense increases; the effective date of the rent increase should be the date that the new owner substituted in to the petition; and the annual allowable increase that was in effect at the time the new landlord substituted in should be used to determine the amount of the operating expense increase.

MSC: To accept the appeal and remand the case to the Administrative Law Judge with instructions to find that Ordinance ß37.8(b)(1)(A) does not permit this increase to take effect until five years from the date that the O&M 1 increase was imposed; to deny the appeal on all other grounds.

(Marshall/Henderson: 5-0)

12. 329 Font AT070084

The tenants appeal on the grounds that, since the new landlord substituted in to the petition for the prior owner, they are not a different landlord for purposes of exemption from the 5-year limitation on operating expense increases by the same owner.

MSC: To accept the appeal and remand the case to the Administrative Law Judge with instructions to find that Ordinance ß37.8(b)(1)(A) does not permit this increase to take effect until five years from the date that the O&M 1 increase was imposed; to deny the appeal on all other grounds.

(Marshall/Henderson: 5-0)

13. 325 Font AT070118

The tenant appeals on the grounds that: the petition was filed 3 years after a prior O&M petition had been filed by the prior owner, in violation of the 5-year limitation on operating expense increases by the same owner; transfer of ownership was not documented; work orders were not provided by the landlord; the landlord's new earthquake insurance policy does not benefit the tenants; there should have been no increase in garbage expenses, since garbage collection has been reduced; payroll costs should not have increased when there were fewer employees; increased office costs were not proved; the costs of debt service and property taxes actually went down; the burden of proof was inappropriately shifted to the tenants; and the petition should have been administratively dismissed.

MSC: To accept the appeal and remand the case to the Administrative Law Judge with instructions to find that Ordinance ß37.8(b)(1)(A) does not permit this increase to take effect until five years from the date that the O&M 1 increase was imposed; to disallow consideration of insurance expenses; and to deny the appeal on all other grounds.

(Marshall/Henderson: 5-0)

14. 128 Garces AT070089

The tenants appeal on the same grounds as the tenant at 325 Font, directly above.

MSC: To accept the appeal and remand the case to the Administrative Law Judge with instructions to find that Ordinance ß37.8(b)(1)(A) does not permit this increase to take effect until five years from the date that the O&M 1 increase was imposed; to disallow consideration of insurance expenses; and to deny the appeal on all other grounds.

(Marshall/Henderson: 5-0)

15. 355 Serrano #12C AT070095

The tenant appeals on the grounds that: the landlord failed to prove that the increase in insurance costs was not temporary and the comparison periods could have been chosen to produce exaggerated results; the effective date for the rent increases should be the date that the new landlord subbed in to the petition; the allowable rent increase in effect on the effective date of the rent increases should be used; and the new owner as successor to the prior owner should not be allowed to impose an O&M increase within 5 years of the prior O&M increase.

MSC: To accept the appeal and remand the case to the Administrative Law Judge with instructions to find that Ordinance ß37.8(b)(1)(A) does not permit this increase to take effect until five years from the date that the O&M 1 increase was imposed; to disallow consideration of insurance expenses; and to deny the appeal on all other grounds.

(Marshall/Henderson: 5-0)

16. 405 Serrano #10-G AT070097

The tenant appeals on the grounds that the annual increase should cover the landlord's expenses, and it should not be the tenants' responsibility to pay for the upkeep and maintenance of the property.

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

B. 1030 Post St. #507-08, 310, 214, 110, AL070152

201-02, 305

Six tenants filed petitions requesting a determination as to whether their units are exempt from the Rent Ordinance; the petitions were consolidated for a hearing on jurisdiction. The Administrative Law Judge (ALJ) found that, although the units are covered by a regulatory agreement pursuant to the federal low-income housing tax credit program, a December 20, 2006 amendment to the Rent Ordinance made such units subject to the jurisdiction of the Rent Board. The landlord appeals, asserting that the decision is in error because: the landlords never conceded that the amendment to Ordinance ß37.2(r)(4) applies to the subject units; and the ALJ erred by failing to consider the legal arguments raised by the landlord.

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

C. 407 Broadway #8 AT070153

The landlord's petition seeking a determination pursuant to Rules ß1.21 was granted because the ALJ found that the subject unit is not the tenant's principal place of residence. On appeal, the tenant claims that the decision is unfair because the landlord's witnesses live on another floor of the building and therefore would not know whether or not the tenant lives in the building.

MSC: To deny the appeal. (Hurley/Gruber: 3-1; Marshall dissenting)

VI. Communications

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

A. A Memorandum from John St. Croix, Executive Director of the Ethics Commission, regarding new regulations regarding gifts from restricted sources and gifts from subordinates.

B. A letter from Susan Sangiacomo of Trinity Properties requesting an Advisory Opinion from the Board on the question of whether charges associated with the payment of rent by credit card could be assessed to tenants without being considered unlawful rent increases. This issue will be calendared for discussion at the next Board meeting.

VII. Director's Report

Executive Director Wolf updated the Board on the progress of the search for an Alternate Neutral Commissioner to replace ex-Commissioner Wasserman.

IV. Remarks from the Public (cont.)

C. Tenant Michael Perlas asked for clarification as to whether the Board's action on the Parkmerced appeals apply only to the appellants, and expressed his belief that the Board's decision regarding the application of Ordinance ß37.8(b)(1)(A) and "exaggerated results" should apply to all tenants included in the petition.

D. Tenant Mukund Vankatachari asked several hypothetical questions regarding the imposition of this and any future O&M increases on the part of the landlord.

VIII. Calendar Items

July 17, 2007 - NO MEETING

July 24, 2007

7 appeal considerations

New Business:

Rent Board Statement of Incompatible Activities

Request for Advisory Opinion Regarding Charges Associated with Payment of Rent by Credit Card

IX. Adjournment

President Gruber adjourned the meeting at 8:30 p.m.

Last updated: 10/9/2009 11:26:18 AM