Minutes from the Housing Study Public Hearing of May 24, 2000 - 5/24/00

 

MINUTES OF THE PUBLIC HEARING REGARDING THE SAN FRANCISCO HOUSING STUDY

 

Wednesday, May 24, 2000 at 12:00 noon in

Room 400, City Hall, 1 Carlton B. Goodlett Place

 
 
 

Rent Board Executive Director Joseph P. Grubb, the "Moderator", called the Public Hearing to order at 12:07 p.m. Deputy Director Delene Wolf was also in attendance and took Minutes of the Hearing. Mr. Grubb welcomed the attendees and explained that the purpose of the Public Hearing was to enable the public to comment on the scope and nature of the proposed study. Mr. Grubb informed the public that the comments gathered as a result of this hearing would be included with the Study Protocol, a compilation of recommendations previously submitted by various housing advocates. The scope of the Study shall take into account public comments and the Study Protocol, but shall not be limited to just these recommendations. Rather, the Study will be a neutral, comprehensive fact-based study on the extent and sources of the current housing shortage and its socio-economic implications. After Mr. Grubb’s introductory remarks were concluded, 53 individuals testified as follows below:

 

 

  1. Norman Rolfe said that the Study should determine what percentage of individuals’ incomes is going to rent, and how much additional affordable housing would be required in order for that income to rent ratio to revert to no more than 25%. He reminded those in attendance that the proposed living wage of $11.00 per hour results in an income of only $22,800 per year. He said that the Rent Ordinance should not be weakened until there is enough housing. He also questioned how many wealthy individuals have "pied a terres" in the City.
 
  1. Small property owner Andrew Moore asked that the impact of rent control on small owners be examined; said that there is a difference between an owner of a house with an in-law unit and the owner of a multi-unit apartment building; expressed his belief that rent increases pegged at 60% of CPI are forcing owners out; and asked that San Francisco rent control be compared with that in other cities. He said that politics should not play a role in the Study.
 
  1. Ernestine Weiss said that: capital improvement passthroughs are exorbitant; a cap should be placed on vacancies; it is left up to tenants to complain regarding corporate rentals; the condo conversion law should be strengthened; and, in Seattle, builders are required to furnish units for seniors.
 
  1. Small owner Robert Celso complained that he bought a duplex in 1980, but can’t retire from his job as a landlord, because he will "face fines and worse." He believes that the City demonizes he and other small landlords. When his mortgage is paid off, Mr. Celso wants out of the rental business, and plans to Ellis his building, thereby removing an affordable unit.
 
  1. Tenant Alton Cabral said that he was evicted due to owner move-in 3 years ago. Mr. Cabral believes that a "loophole" in Prop. G allows for eviction if the landlord has elderly relatives. He believes that a year is a long time for a study, since tenants don’t get a year to move out of a building. Mr. Cabral believes there should be more laws to protect seniors.
 
  1. Small landlord W. E. Winn, Jr. said that it became impossible to function under the restrictive Prop. I regulations, so he ceased renting the 6 rental units in his building. He advised those who "could afford to get out" to do so.
 
  1. Small landlord Catherine P. Gallagher stated her belief that property is no longer a viable investment because tenants can sublet illegally and thereby become the landlord. She said that she has been trying to move into her building for the last 10 years but that the tenants want $50,000 to move.
 
  1. Small landlord Naomi Richen said that taxpayer-supported advocacy groups are available to help tenants while the District Attorney will prosecute landlords for honest mistakes. She believes that there is no chance to make a reasonable return and so she will keep her units for guests when they become vacant. Since "price controls cause shortages" she asked that impartial economists conduct the study. She stated that there are 2 ways to destroy a City: "bombs and rent control."
 
  1. Small owner Patricia Carter said that a 1988 act of kindness on her part turned into a "nightmare." She can’t move in or sell her building, and now lives with a friend. As a retired military person, she can barely make the payments on her property, let alone hire an attorney. Only when the tenant dies or moves will she be able to live in her property. She believes there is no coordination in the way the City deals with problems.
 
  1. 83-year old small owner Leslie Genty said he can’t move in to his building, and is paying "way more rent" than his tenants.
 
  1. Small landlord Maurine Robinson is a retired teacher with 2 units; she lives in one. It took her 2 years to get a tenant out of her building, and the tenant squatted there for one month after Ms. Robinson thought she was out. She lives alone, and is upset and afraid all the time, as if she lives in a "battle zone."
 
  1. Maureen Reen told the assembled that they now had to listen to a "small tenant after all these small owners." She has paid rent for 40 years but "has no say." She believes that, "without laws, it’s chaos. It’s a business for the landlord, for the tenant, it’s survival."
 
  1. Small owner Karen Crommie said that the Study’s emphasis should be on economics. She would like the following questions addressed: how many rental units are being held off the market?; how many tenants have other places of residence?; and how much money are owners losing each month? Ms. Crommie believes that low-income individuals should be subsidized by everyone. She believes the Study should be conducted by an outside, not local, firm to avoid a conflict; and that the Study should draw conclusions. She provided 4 suggestions for research firms.
 
  1. Marie Pennington said that big owners, not small, are the problem.
 
  1. Jul Niemier is a small owner who recently purchased a building that has 2 units that are not up to code, but are "completely livable." He believes that code requirements should be relaxed in order to utilize all safe, available housing, and that building codes are driven by unions trying to create work for themselves.
 
  1. Tenant Susan Vaughan remarked on the fact that there were not a lot of minority individuals in attendance at the hearing – she believes that immigrants are having to leave the City and go where it’s more affordable. She said that rent control in New York and Cambridge should be examined. Ms. Vaughan pays 1/3 of her income towards rent, and said that "if prices go up, tenants are priced out."
 
  1. Chip Gibbons said that, since everyone else was "trashing each other", he’d "trash the City." Mr. Gibbons believes that failure to enforce the planning code makes fewer units available since many units zoned for residential use are put to other uses. He said that "businesses pay taxes, but bureaucracy needs taxes like a junkie needs heroin." Jobs are being created without any place for the workers to live.
 
  1. Small landlord Nancy Tucker remarked on the "black market in apartments" because of illegal sublets and said that master tenants engage in rent gouging. Ms. Tucker cited the problem of "pied a terres" and said that conversions to office space are occurring because the rents are so cheap. She asked that the Study conduct a count of empty units, and be economically, and not socio-economically, based. Ms. Tucker finds it appalling that such a Study hasn’t been conducted before and said the research firm must be from outside the Bay Area or they will be "contaminated by local politics."
 
  1. Tom Ramm, Co-Chair of the Small Property Owners of San Francisco, said that the Study should be conducted by a firm from outside San Francisco with extensive experience with housing and rent control studies and should: concentrate on economic issues, and not social sciences; be free of political influence; differentiate between impacts on large and small owners; look at the effects of rent control on construction and retention of units; and draw conclusions regarding the effects of 20 years of rent control on San Francisco. Mr. Ramm believes that the "disabled and low-income are subsidizing the young, healthy and rich."
 
  1. Landlord Frank Santiago is "not against subsidized housing", and has had Section 8 tenants since 1937. However, Mr. Santiago believes that Section 8 is not working in San Francisco, since the Housing Authority has not been honest with owners. Mr. Santiago also believes that there are "massive abuses" of Rules and Regulations Sections 6.14 and 6.15 because two of his original tenants left behind a subtenant who was unknown to the owner.
 
  1. Small owner John Burke posed several questions: why can’t Supervisors who own property vote, but tenants on the Board of Supervisors can?; why are new buildings exempt from rent control, since older buildings don’t have fewer expenses?; and why are rent increases pegged to only 60% of the CPI when no business survives at 60% of inflation? He cited 3 professors who have found that rent control can’t achieve its stated goals and hurts, rather than helps, the economy.
 
  1. Ted Gullickson of the Tenants’ Union said that he was looking forward to an unbiased study with "lots of good data." He asked that the following be added to the Study protocols: how many tenants have been evicted due to the increase in housing costs?; what is the value differential between an empty and occupied building?; how many tenants have paid off their landlord’s mortgage?; how much price-fixing and profiteering is engaged in by the real estate industry?; since interest rates are low and inflation is nil, what is the rationale for the increase in rents?; and how much are landlords making off of tenants during the housing crisis?
 
  1. Small landlord Verna Tam said that "not all apartments are expensive", since hers are low. She said that landlords have no rights when tenants break the rental contract if they’ve allowed the condition to continue. She doesn’t believe it’s fair that it costs between $15 – 20,000 to evict a tenant when a store owner has the right to get rid of a "misbehaving customer." She asked if contracts are enforceable in San Francisco.
 
  1. Tenant David McGuire of Mission Agenda lives in a single room occupancy hotel and said that "tax returns are the best modern American fiction." He believes that the Study will be the "usual charade and hoax" and said that low rents are necessary to retain writers, artists and dancers. Mr. McGuire believes that we’re living in the "current Gold Rush" and that it’s "the end of living, and the beginning of survival."
 
  1. John Di Donna said that the homeless build their own shanty towns in other countries and that housing is a necessity for all. He believes that landlords should be subsidized for providing a necessary service.
 
  1. Landlord George Wong believes that rent control is a tool to ruin the landlord/tenant relationship, since it "victimizes the good tenant and benefits the professional tenant." He says he has been the "landlord of the year" 3 years in a row. He is a professional psychic who believes in the elimination of rent control and is available for the Study.
 
  1. Tenant Bill Lonsdale said that the scope of the Study will have a lot to do with the outcome, and that the process needs to remain open. He suggested that there be a Public Hearing on the scope of work and said that there are not enough funds for a complete study. He thought that the timing is fortunate in that the census is almost completed, and could be a useful source of demographic information.
 
  1. Small owner Marilyn Cosentino said that things have become adversarial between landlords and tenants. Since tenants are paying so much below market rent, they have no desire to leave. She believes that the single largest difference between large and small owners is that small landlords do not have the benefit of turnover. She asked that pied a terres be looked at and requested a "non-local economist" who will draw conclusions from the data -- $175,000 is not enough.
 
  1. Chooi Eng Grosso used to be a tenant, and is now a homeowner. She said that inequities result from a "preponderance of tenants in the voting pool." She thinks that home ownership opportunities should be increased and that the "lid should be lifted" from TIC’s and condos.
 
  1. Miguel Wooding of the Eviction Defense Collaborative and the Tenants’ Union said that an economic analysis with no look at social issues IS biased. He asked that the following be examined: tax benefits to landlords; profiles of
 
  1. owner-occupants and landlords in terms of income, whether they own other buildings, and whether they live somewhere else.
 
  1. Tenant Anastasia Yovanopoulos rented a $300 flat in Noe Valley in 1978, which now rents for $1100. She asked that individual units be looked at to see how much rents have gone up and where. She wants socioeconomic trends to be studied and asked that the disabled and those on fixed incomes not be forgotten. She said that "rats and rodents are not roommates."
 
  1. Ron Saturno is involved with the Neighborhood Watch Program in Hayes Valley, and said that everyone is right from their own perspective. He believes that rent control doesn’t work for most, since tenants can’t find an affordable place to live; and small, elderly owners struggle with restrictions to subsidize affluent tenants. He believes that the law could be re-written and made more fair; that units are kept vacant because landlords don’t have enough money to renovate; and that it is easier to use a unit for storage or as an office, not have to deal with a problem tenant, and receive a tax break. Mr. Saturno said that the effort involved in filing petitions at the Rent Board isn’t worth it.
 
  1. Tenant Roger Rudd thinks that the City ought to crack down on illegal in-law units that do not have operative heat, low ceilings, and exposed heating ducts. Mr. Rudd was concerned about enforcing the implied warranty of habitability. He suggested that housing be built in the Presidio with preference going to San Francisco residents. Mr. Rudd was concerned about $10 – 20 credit checks, and what landlords were going to do with tenants’ personal credit information.
 
  1. Prop. I landlord Peter Holden said that it would be hard to act on all these suggestions. He would like to see a breakdown of the housing inventory and rents paid, as well as a social census of the tenant population and income. He said that he wouldn’t have bought his building if Prop. I had already been in existence at the time.
 
  1. Nancy Noonan is a tenant in a large complex. She believes that when one buys property, it is incumbent upon you to research existing laws and decide if you want to "take this on." She feels that an outsider would need too long a time to "understand San Francisco" and that, if revoked, rent control would just be voted back in.
 
  1. Darran Cannady rented for almost 20 years before becoming a small owner about 5 years ago. He has a good relationship with his tenant and feels there should be funds to teach people how to be good landlords. He believes the amount of money dedicated to the Study should be increased. Mr. Cannady is concerned about "dot commers" and "supposed live-work."
 
  1. Brook Turner, Executive Director of the Coalition for Better Housing, supports the Study. Mr. Turner believes that the housing crisis is the result of inadequate supply. He asked that the scope of the problem be examined, as well as what works, and what doesn’t. He said that the landlord and tenant communities have contributed to the Protocol Document, and asked that it be paid close attention to. He thanked Supervisor Brown and Moderator Joe Grubb.
 
  1. Landlord Richard Hanlin said that 5 years ago he rented a one-bedroom apartment for $1200 per month. His tenant works in Silicone Valley and is now substantially wealthier than he is. Mr. Hanlin does not believe that rent control was designed with this person in mind.
 
  1. Small landlord Carole Bayer said that a non-resident tenant of hers moved to Los Angeles in 1982, and sublets to roommates, one of whom runs a small business out of the unit. She does not think it fair that a Master Tenant can charge their roommates the total rent in order to get a "free ride." She asked how many roommates a tenant can have in 1 year, and said that a tenant should have to make the landlord aware of a change in roommates – it shouldn’t be the landlord’s burden. She does not think it’s fair that a landlord’s relatives can’t move into a building unless the landlord also lives there.
 
  1. Michele Balk appeared on behalf of Randall Oileu, her next-door neighbor. She asked why there is no provision for owner move-in eviction for catastrophically ill owners, when similarly situated tenants are protected. She said that Mr. Oileu’s tenant is making money off the landlord’s property, when the landlord is being financially burdened by the cost of cancer treatments.
 
  1. Tony Hestor from Mission Agenda said that he was speaking on behalf of poor people, who are rapidly being displaced by greedy out-of-towners. He remarked on a 30-day notice to vacate being "nothing", and asked if it was desirable for San Francisco to turn into a "3rd World City", consisting only of the very rich and very poor.
 
  1. Russ Charpentier asked that the situation of low-income property owners with wealthy tenants be considered along with the reverse scenario. He expressed his belief that those owners will leave the City as well, which is not of benefit to tenants. He expressed his preference for an outside consultant and wished the Moderator "good luck."
 
  1. Small landlord Linda Dunn recommended that the Study be economically based and data driven, since she believes that current policy is based on inflammatory rhetoric rather than hard data. She stated that there is much evidence that rent control works to the detriment of the housing stock. She believes that diversity and affordable housing should be maintained but feels that this is a City-wide problem, and not one just to be shouldered by landlords of pre-1979 buildings.
 
  1. Jake McGoldrick asked that a comprehensive body of data be collected as more than an "academic exercise" but, rather, to lead to solutions. He believes that the housing development side of the issue, including the financial and construction industries, need to be analyzed. He wants to look at issues of: density; zoning allowances; sources of available funds; how much money is diverted from housing development; regional cooperation and revenue-sharing instead of competition between counties; and the jobs to housing ratio.
 
  1. Ms. Detting, a small landlord, complained about a tenant who she considers to be "the devil himself." She said that she couldn’t go into her own building for over 12 years, and that she tried to Ellis, but it would be considered retaliatory. She feels that rent control is the "most evil law", since landlords cannot get out of their relationship with their tenants, whereas "if you’re married, you can get a divorce."
 
  1. John Bardis of the Citizen Action Committee said that there is nothing more critical than the housing crisis, but that $175,000 "won’t do it justice." He thinks it would be wise to continue this hearing; put the RFP out for Public Hearing to ensure it’s what the public expects; and/or send 3 alternative RFP’s with different scopes back to the Board of Supervisors – otherwise, people will be "more frustrated."
 
  1. Michelle Horneff of the Professional Property Management Association had the following suggestions: that an outside (national) company conduct the Study; that a city without rent control be used as a control group; that the issue of principal place of residence for tenants be looked at; and that the Study determine whether rent control is doing what it’s supposed to be doing.
 
  1. Janan New of the San Francisco Apartment Association explained that their organization had had input into the Protocol Document. She therefore thanked Supervisor Brown and his staff for their leadership; Supervisor Bierman and her staff for bringing the tenant community into the process; members of the public who "filled in the holes"; and the Executive and Deputy Directors of the Rent Board for their patience.
 
  1. Homeowner Geoff Mikone said that the issue of how many people can live in San Francisco is the equivalent of an irresistible force meeting an immovable object: not everyone who wants to can live here.
 
  1. Louise Vasquez said that small landlords such as herself are a "dying breed", and that new owners won’t tolerate all these rules. Since Ms. Vasquez feels "abused, harassed and discriminated against", she questions the utility of a study. She believes that more businesses and condominiums are inevitable; says that her tenants are making "six figures"; and feels the solution is to just "get rid of the Rent Board."
 
  1. Carol Bayer spoke again, stating that for rents that are considerably less than "market", there should be some relief.
 
  1. Tenant Jean Lynch said that she has been a tenant for 20 years. She remarked that she keeps hearing the word "subsidized" from the landlords, but that there is a 5-7 year waiting list for public housing. She believes that there are many individuals living in public housing who don’t belong there, while veterans and families are on the streets.
 

The Public Hearing was concluded at 2:32 p.m. At that time, Mr. Grubb thanked everyone who spoke, and informed the public that the RFP/RFQ will probably go out some time in June. Hopefully, the firm that will conduct the Study will be selected and the contract awarded in August. He will keep everyone informed as to progress and developments in the Study on the web site.