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October 28, 2008

October 28, 2008

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

Tuesday, October 28, 2008 at 6:00 p.m. at
25 Van Ness Avenue, Room 330

I. Call to Order

President Gruber called the meeting to order at 6:11 p.m.

II. Roll Call

Commissioners Present: Beard; Crow; Gruber; Henderson; Mosbrucker; Mosser.

Commissioners not Present: Hurley; Justman; Marshall.

Staff Present: Gartzman; Lee; Wolf.

Commissioner Murphy appeared on the record at 6:15 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of October 7, 2008.

(Mosbrucker/Henderson: 5-0)

IV. Remarks from the Public

A. Tenant Joseph Jedekein of 550 Battery #14128 (AT080101) said that Golden Gateway listed 1964 as the date of ownership on their petition, but the property was sold to the present owners in 1991. Mr. Jedekein believes this makes a difference because the utility passthroughs will be larger due to the passage of so many years. Mr. Jedekein told the Board that the doctrine of stare decisis doesn't make sense when the facts are different and the Warren Court overturned the "separate but equal" doctrine in Brown v. Board of Education, so he believes that the Commissioners can "consider the equities."

B. Golden Gateway tenant Ernestine Weiss handed out a copy of the Golden Gateway Tenants' Association Bylaws. She said that the individual at the meeting purporting to represent the organization is illegitimate because there hasn't been an election in many years, and he does not represent all the tenants.

C. Tenant Brian Browne of 550 Battery #1409 (AT080098) distributed an article he wrote regarding old Rules and Regulations Section 4.11. Mr. Browne went over his calculations to show that the landlord's costs haven't gone up more than the annual increases over the years, despite no energy conservation efforts. Mr. Browne stated that $12.03 of his rent went towards power when he moved in, and that figure is $12.039 now; and he does not feel that Rules Section 6.16 tracks the CPI or PG&E costs. Mr. Browne said that ß6.16 constitutes a "regressive tax on aging," invalidates his contract and that it shouldn't be his burden to prove that the landlord doesn't deserve a passthrough.

V. Consideration of Appeals

A. 815 O'Farrell #502 AT080104

The tenant's petition alleging decreased housing services was denied because the Administrative Law Judge (ALJ) found that the tenant's claim of lack of heat was resolved by a Surrender Agreement in which the parties agreed to a release of all known claims. The tenant appeals, arguing that the heat issue is within the Rent Board's jurisdiction; the Surrender Agreement was signed after the tenant had been without heat for over one month; and PG&E personnel are witnesses to the veracity of her claim.

MSC: To deny the appeal. (Mosbrucker/Murphy: 5-0)

B. 250 Fell St. #45 AT080100

The landlord's petition for certification of capital improvement costs to 31 units 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.

(Mosbrucker/Henderson: 5-0)

C. 550 Battery #1418 AT080101

The landlord's petition for approval of utility passthroughs to 14 of 794 units was granted. One tenant appeals on the grounds that: the establishment of an earlier base year in a prior case should not be res judicata because the prior decision was erroneous; and the landlord did not own the building until the early 1990s, which should result in a much smaller passthrough.

MSC: To recuse Commissioner Crow from consideration of this appeal. (Mosbrucker/Henderson: 5-0)

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

D. 550 Battery #1409 AT080098

The landlord's petition for approval of utility passthroughs to 65 of 794 units was granted. One tenant appeals the decision on the grounds of the tenant in unit #1418, above, as well as asserting that: information regarding the alleged incorrect ownership date was not available at the time of the prior hearings; the decision negates the terms of his lease; and Rules ß6.16 cannot be justified by mathematical, economic or policy arguments.

MSC: To recuse Commissioner Crow from consideration of this appeal. (Mosbrucker/Henderson: 5-0)

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

E. 2893 – 24th St. #B AT080099

The landlord's petition seeking a determination pursuant to Rules ß1.21 was granted because the ALJ found that the original tenant no longer occupied the unit as her principal place of residence and a subsequent occupant was a guest, rather than a tenant. On appeal, the second tenant maintains that: the ALJ exhibited bias against him; there are factual errors in the decision; he is a tenant at the subject unit, with the consent of the landlord; he has paid rent on behalf of himself and the original tenant, which was accepted by the landlord; his due process rights have been violated; and the landlord has waived the right to a rent increase under the facts of this case.

Since the orignal tenant will be filing an untimely appeal of the decision, it was the consensus of the Commissioners to continue consideration of this appeal in order to consolidate the two appeals.

F. 642 Mansell, Upper Level AL080102

The tenant's petition alleging decreased housing services due to lack of heat in the unit was granted and the landlord was found liable to the tenant in the amount of $30.00 per month. On appeal, the landlord claims that: there is sufficient heat in the unit; the tenant never complained about a lack of heat in the unit; and the tenant's daughter has moved in to the unit with her.

MSC: To recuse Commissioner Crow from consideration of this appeal. (Mosbrucker/Henderson: 5-0)

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

G. 444 Larkin St. AL080103

The landlord's Petition for Extension of Time to do Capital Improvement Work was denied because the ALJ found that the landlord did not have all the necessary permits at the time the Notices to Vacate were issued and did not file the Petition in a timely manner. The landlord appeals the Board's interpretation of the regulations, which requires that all necessary permits be obtained prior to the filing of the petition, arguing that this is not possible in the event of a disaster, which occurred in the instant case. The landlord also maintains that it was not possible to ascertain the full scope of work until the tenants vacated their units. Lastly, the landlord claims that the delay in filing the petition should not mandate denial in situations where the requested extension is found to be reasonable.

MSC: To accept the appeal and remand the case to the Administrative Law Judge to grant the petition based on the facts of this case. (Murphy/Gruber: 4-1; Henderson dissenting)

VI. Communications

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

A. Newspaper articles from the Chicago Sun-Times, the Chicago Tribune, and the Los Angeles Times.

B. A Press Release from the Mayor's Office regarding housing production.

C. A copy of the appellate decision in the case of Manufactured Home Communities, Inc. v. County of San Luis Obispo.

VII. Director's Report

Executive Director Wolf informed the Board that legislation that would allow a passthrough of increased water bill costs was continued by the full Board of Supervisors at this afternoon's meeting. She also told them that it is time for the annual review of the SRO Hotel Visitor Policy. Since prior Tenant Commissioner Larry Becker had been the Tenant Commissioner Representative on the Committee that is convened prior to the Public Hearing, she asked that the Tenant Commissioners consider a replacement representative.

VIII. Old Business

A. Petitions for Extension of Time to do Capital Improvement Work

(Rules and Regulations Section 12.15)

Discussion of this issue was continued due to the absence of Commissioner Marshall.

B. Utility Passthrough Regulation 6.16

The Board continued their discussion of possible changes to the methodology for calculation of utility passthroughs. Senior Administrative Law Judge Sandy Gartzman walked the Board through a Memorandum from she and Senior ALJ Tim Lee, with charts using numbers from actual cases showing the effect of different base year adjustment methods on passthrough amounts. Two charts were prepared: one for landlords using base years earlier than 2002 and one for landlords using 2002 and later base years. The charts compared what the passthroughs would be under the current regulation with what they would be under the Golden Gateway Center tenants' proposal, which adjusts base year utility costs by the sum of the allowable annual rent increases; what the passthroughs would be using the last two calendar years; and what they would be if everyone used a 2003 base year. The Commissioners discussed the merits of the various proposals, whether it is necessary to continue to require a landlord petition, and whether tenants should be able to file a hardship application without first filing an appeal to the Board. Commissioner Mosbrucker felt that eliminating the petition requirement would put too much of an onus on tenants, while Commissioner Murphy said that there is no incentive for landlords to change the process unless it is simplified. Commissioner Beard suggested that it might be possible to require a petition only when there is a change, such as a different base year, and asked whether some kind of random audit of landlord's calculations could be conducted. Commissioner Murphy also expressed his opinion that it is beyond the Board's authority to make changes to the calculation methodology, that any such change would constitute an unconstitutional taking and that landlords have a vested right in continuing to receive the passthrough calculated on earlier base years. The Board asked staff to draft language requiring landlords who use pre-2002 base years under the current regulation to use a 2003 base year beginning January 1, 2009. This change would eliminate the two separate categories for calculating passthroughs and require those landlords using pre-2002 base years to use the same method used by all other landlords. Additional language will be drafted that eliminates or modifies the petition requirement, including a random audit process, if possible. Lastly, the City Attorney will be asked to provide an opinion on the constitutional, takings and vested rights concerns expressed by Commissioner Murphy.

Discussion of this issue will be continued at the next meeting.

IV. Remarks from the Public (cont.)

D. Relatives of the landlord at 642 Mansell (AL080102) said that the landlord was unable to attend the hearing due to health reasons, and was unawre that she could testify by phone. They said that the tenant wasn't told not to use the heaters, just not to use them extensively or the power would shut off. They maintained that there is sufficient heat in the unit. The landlord's daughter-in-law told the Board that the tenant filed her petition after she was asked to move out of the unit because the landlord's son and his family were moving back in to take care of his mother. The tenant's daughter having moved in to the unit presents the landlord with additional costs.

E. Golden Gateway tenant Bob Coleman told the Board that just because the hardship remedy isn't being extensively exercised by the tenants at Golden Gateway doesn't mean that it doesn't exist. He said that many tenants are overwhelmed by poverty and other pressing needs.

F. Golden Gateway tenant Brian Browne said that, at the last appeal consideration, one Commissioner spoke of energy conservation efforts being made by the Golden Gateway Center, which he does not believe to be the case. Mr. Browne believes that people shouldn't have to humble themselves to make a hardship claim when there's no need.

G. Golden Gateway tenant Phil Page urged the Board to include indexing of base year utility costs in the rent, otherwise he believes that they will be unfair to landlords and tenants.

H. Golden Gateway tenant Ernestine Weiss said that landlords shouldn't be able to use years when they didn't own the building in their passthrough calculations and the fact that they can do so is "mind-boggling."

IX. Calendar Items

November 4th & 11th, 2008 – NO MEETINGS

November 18, 2008

7 appeal considerations

Old Business: Utility Passthrough Regulation 6.16

X. Adjournment

President Gruber adjourned the meeting at 8:25 p.m.

NOTE: If any materials related to an item on this agenda have been distributed to the Commission after distribution of the agenda packet, those materials are available for public inspection at the office of the Rent Board during normal office hours.

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