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June 5, 2001

June 18, 1996

 

 

MINUTES OF THE SPECIAL MEETING OF

THE SAN FRANCISCO RESIDENTIAL RENT

STABILIZATION & ARBITRATION BOARD,



Tuesday, June 5, 2001 at 6:00 p.m. at

 CITY HALL, ROOM 408

 

 

 

            I.            Call to Order

 

            President Wasserman called the meeting to order at 6:15 p.m.

 

            II.            Roll Call

 

                                                                        Commissioners Present:            Aung; Becker; Gruber; Hobson; Justman; Lightner; Marshall; Wasserman.

                                                                        Staff Present:            Grubb; Wolf.

 

      Commissioner Mosser appeared on the record at 6:30 p.m.; Commissioner Murphy arrived at the meeting at 6:36 p.m.

 

            III.            Approval of the Minutes

 

                                    MSC:            To approve the Minutes of May 15, 2001.

                                                (Becker/Gruber:  5-0)

 

            IV.            Remarks from the Public

 

      Mavel Hussan expressed her fear that, were the Board to pass proposed Rules Section 1.21, tenants would be in danger if they did not sleep in their unit every night. 

 

            V.            Consideration of Appeals

 

            A.            1200 Taylor #18 & #4                                    AT010098 & -99

 

      The landlord’s petition for rent increases based on increased operating expenses and certification of capital improvement costs to 12 of 16 units was granted.  The tenants in two units appeal the decision as to the capital improvement passthrough and the operating expense increase.  Pursuant to the Moratorium on processing of capital improvement passthroughs, only the appeals as to the operating and maintenance expense increase are currently at issue.  The tenants in unit #18 claim that:  any increases granted should not apply to them because they were served notice of the hearing under an incorrect name; the landlord was allowed to supplement the evidentiary record after the hearing with invoices that the tenants did not have an opportunity to refute; the increase in management fees was not the result of any increased services to the tenants; and the landlord’s out-of-pocket costs have actually decreased, as have services rendered to the tenants in the building.  The tenants in unit #4 assert that the landlords are not entitled to an increase based on increased debt service costs pursuant to Rules Section 6.10(g).

 

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

 

                                    MSC: To deny both appeals.  (Lightner/Gruber:  4-1; Hobson dissenting)

 

            B.            1351 – 25th Ave.                                    AL010095

 

      The tenant’s petition alleging decreased housing services due to noise emanating from the landlord’s unit, which is upstairs from the tenant’s unit, was granted.  The landlord was found liable in the amount of $500.00 per month until there is a cessation of the unreasonable noise coming from her unit.  On appeal, the landlord claims that:  the Administrative Law Judge did not consider her testimony and based his decision on hearsay evidence; the amount granted is excessive; and the Rent Board cannot assess punitive damages.

 

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

 

            C.            138-146 – 6th St.                                    AL010096

 

      Five tenant petitions alleging unlawful rent increase were granted because the Administrative Law Judge found that the landlord had failed to prove that the subject premises is exempt from Rent Board jurisdiction.  On appeal, the landlord asserts that: the premises are exempt because:  an oral agreement existed between the landlord and the California Department of Corrections to provide housing to former inmates, and the Department of Corrections is subsidizing some of the tenants’ rents; the building has undergone substantial rehabilitation, and there is no requirement in the Rent Ordinance that a landlord file a petition in order to be exempt on these grounds; the Certificate of Final Completion and Occupancy was issued after the effective date of the Ordinance, and the building was vacant prior to that time; and the public policy reason for the exemption, the addition of units to the housing stock, is satisfied by granting exemption in this case.

 

                                    MSC: To deny the appeal.  (Marshall/Becker:  5-0)

 

            D.            2430 Cabrillo                                    AT010101

 

      The tenant’s petition alleging decreased housing services was denied.  The tenant’s claim was that, pursuant to a 1997 Conciliation Agreement, the landlord fails to expend one full hour per week on common area maintenance and the premises are therefore in an unsatisfactory condition.  On appeal, the tenant asserts that:  the Administrative Law Judge exhibited bias on behalf of the landlord; the landlord’s attorney harassed him at the hearing; the Administrative Law Judge tried to pressure him into mediating the case, and failed to allow him time for cross-examination; and he proved his case through pictures, letters and a credible witness.

 

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

             

            E.            1369 Hyde St. #65                                    AL010100

 

      The tenant’s petition alleging decreased housing services due to the removal of garage space in the building was granted and the landlord was found liable to the tenant in the amount of $300 per month, the current fair market value of the parking space.  On appeal, the landlord contends that:  the tenant should not be granted a rent reduction upon removal of the housing service that is greater than the amount they were paying for the service; the reasons for the withdrawal of the service are irrelevant to the valuation of that service; the value of the garage originally constituted 13% of the tenant’s total rent obligation, but the valuation determined by the Administrative Law Judge constitutes 21% of the total rent; and, since market value was neither demanded nor paid for the service, it should not be the amount granted for the rent reduction.

 

                                    MSC: To recuse Commissioner Lightner from consideration of this appeal.  (Murphy/Lightner:  5-0)

 

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

 

                                    MSC: To accept the appeal and remand the case for a hearing to put in evidence regarding the intended use of the parking space and to consider the landlord’s credibility regarding the long-term use of the space.  (Justman/Gruber:  3-2; Becker, Marshall dissenting)

 

            F.  265 Fell St. #601                                                AT010102

 

      The tenant’s petition alleging decreased housing services was dismissed due to his failure to appear at the properly noticed hearing.  On appeal, the tenant provides evidence that he was ill on the day of the hearing.

 

                                    MSC: To accept the appeal and remand the case for a new hearing.  (Becker/Lightner:  5-0)

 

            VI.  Public Hearing

 

      At 6:56 p.m., the Board commenced a Public Hearing on proposed new Section 1.21, which would require that an individual occupy a unit as his or her principal place of residence in order to be covered by the rent increase limitations of the Rent Ordinance.  35 individuals testified as follows below:

 

            1.  Mavel Hussan told the Board that the proposal doesn’t make sense, and constitutes “attempted repression just short of martial law.”

 

            2.  Brook Turner, Executive Director of the Coalition for Better Housing, said that his organization strongly supports the proposed regulation.  Mr. Turner read from a description of the proposal posted on the Tenants’ Union web site, which he said constitutes “vilification and mis-truth.”  According to Mr. Turner, in a poll taken one year ago, 70% of San Francisco tenants said that they do not approve of rent controlled apartments being used as second homes.

 

            3.  Landlord attorney David Wasserman told the Board that, in Manhattan, there are “tons” of apartments that “folks can’t afford to give up” because the rents are so low.  Mr. Wasserman said that the supply of housing is being held hostage to non-use and, that if the supply were to increase, rents would go down.

 

            4.  Landlord Gary Briggs told the Board of three situations that he feels warrant the proposed legislative solution:  1) an individual with a home in Sonoma, who comes to the City 3 times a week to run his business; 2) the Spreckles Mansion, which was being used by peninsula residents for cultural forays into San Francisco; and 3) New York City.  Mr. Briggs said that it is “better late than never.”

 

            5.  Landlord Andrew Long supports the proposal because “if you’re wealthy enough to have two homes, you’re wealthy enough to pay market rent.”  Mr. Long cited the SPUR Study that estimates that 7,000 rental units are currently being held off the market.

 

            6.  Landlord Peter Euteneuer said that, of his 47 rental units, 4% or 2 units fall within the category that would be affected by the proposed regulation.  If the same holds true for most landlords, Mr. Euteneuer believes that a great number of units will come back on the market.  He also said that the transient use of apartments results in higher costs to be borne by long-term tenants.

 

            7.  Tommi Avicolli Mecca of the Housing Rights Committee wondered what the term “normally returns to” means, and asked how it will be interpreted.  For example, if he has to go to Philadelphia to care for his sick sister, will he lose his rent control protections, and will his landlord have to be a spy?  Mr. Avicolli Mecca believes that tenants are treated as “second class citizens” because they cannot afford to buy their homes.

 

            8.  Anthony Schultz supports the proposal in order to free up units, but said that is “has to work for both sides.”

 

            9.  Norman Rolfe said the regulation should be sent back for clarification; that pied a terres are rare; that unscrupulous landlords will try and use this to evict; and that there are “questionable statistics” in the SPUR Report.

 

            10. Landlord Kira Eldemir said that the Rent Board’s Rules and Regulations have made her rental agreement with her tenant “null and void.”  Ms. Eldemir has one tenant who is an oral surgeon who spends one and one-half days per week in San Francisco.  She asked if this individual needs protection and if she should be asked to subsidize him or her?

 

            11. Steven Shubert is opposed because he believes that the proposal provides an incentive to show that tenants are no longer primary residents of their units.  He does not believe that if someone has to care for an ill parent, they should have to worry about rent control protection.

 

            12. Landlord Karen Crommie said that the draft proposal has been worked on, and represents a “reasonable compromise.”  She urged approval.

 

            13. Tenant Michael Barrett voiced his opposition based on “unsubstantiated statistics and speculation.”  Mr. Barrett said that Manhattan is a “totally different situation.”

 

            14. Landlord Naomi Richen said that the Rent Ordinance is supposed to expand the supply of affordable housing, and that she “can’t imagine how anyone is opposed.”

 

            15. Tenant Alice Kostin expressed her fear that low and moderate income tenants could lose their homes if they had to take care of a sick relative over a long period of time, or if they were ill and had to return to their parents’ home, since the proposal doesn’t apply only to individuals with two homes.  Ms. Kostin believes that non-English speaking tenants are at a serious disadvantage at hearings.

 

            16. Janan New, Director of the S.F. Apartment Association, said that “rich people don’t need rent control” and that the proposal plugs a loophole that has been abused for far too long.  Ms. New believes that increased supply will result in lower rents in the long term.

 

            17. Small landlord Marina Franco said that she experiences very little turnover in her building and that it is disheartening for the other tenants when someone doesn’t actually live in their unit.  A “revolving hotel” for some tenants’ friends results in a “lower quality of life” for everyone in the building.

 

            18. Landlord Donald Gibbs said that the proposed regulation is well written and that he supports it.  Mr. Gibbs explained that one of his tenants will be going into a nursing home, and the unit will be used merely as storage.  Mr. Gibbs feels that, at some point, that unit should return to the market.

 

            19. Landlord Tom Garber supports the proposal and cited two anecdotes from his experience:  a tenant who moved to Pennsylvania over two years ago and returns to San Francisco only 7-10 days per year to visit friends; and his cousin, who moved to St. Helena 15 years ago, but comes in to the City once a month to go to dinner or a play.

 

            20. Landlord Bob Mayer supports the proposed regulation because “housing should be for San Francisco residents who need it.”

 

            21. Landlord Peter Holden expressed conflicting feelings because he has a friend who moved to New Jersey but keeps a $750 unit to conduct business in San Francisco a few times a year; Mr. Holden said he doesn’t want to be the reason this individual is kicked out of his apartment.  Mr. Holden also said that the proposal is “too fair, and too reasonable”, so the Board “better not do it.”

 

            22. Landlord Peter Hadiaris is also an attorney who represents tenants, and who is in favor of the proposal because “pied a terres are taking units off the market.”  Mr. Hadiaris believes that working class tenants have more to gain by freeing up housing.

 

            23. Tenant Sandra Finnegan spoke against the proposal because of there being no implementation process.  She asked under what circumstances her landlord could make her prove that her unit was her principal place of residence, and said that a landlord should have to have “Just Cause” before being able to invade her privacy.

 

            24. Landlord Paul Johns said that the proposed regulation is “far overdue”, and cited the examples of doctors working for Kaiser who have apartments in the City but live elsewhere.

 

            25. Landlord Sam Hunt said that he rents to a tenant who lives in Thailand and sublets his unit; the tenant is only in San Francisco two weeks out of the year. 

 

            26. Susan Kellerman said that the proposed regulation is an “obvious way to get more units” and urged support.

 

            27. Tenant Gilbert Herrera, the appellant in the case at 265 Fell #601 (AT010102), told the Board that he has cancer and HIV and was too ill to call on the day of his hearing.

 

            28. Cynthia Arnold of Tenants for Home Ownership supports this “common sense housing policy.”  Ms. Arnold took care of her ill mother for 5 months and experienced no problems with her landlord, and said that tenants who travel produce less wear and tear on their units.

     

            29. Tenant Roberta Callahan said that the proposal “opens a can of worms” and will lead to snooping by landlords over an “exaggerated problem.”  Ms. Callahan believes that it is “part of the game” if a tenant rents an apartment and then goes somewhere else, and that a landlord “doesn’t get market for every unit.”

 

            30. Small landlord Nancy Tucker said that she was “more excited” than she had been at any other Public Hearing of the Board, because the discussion was about adding to the housing stock.  Ms. Tucker knows of two units being used as offices, and of situations where tenants have offered to “sell back their units” for a sum.

 

            31. Tenant George Buffington said that “landlords arguing for more units is like the fox arguing on behalf of chicken coops”, and expressed concerns regarding enforcement.

 

            32. Landlord Bill Quan supports the proposal and said that peoples’ concerns will be addressed in a hearing.

 

            33. Property Manager Dan Michael is also a tenant who supports the proposal, because he “sees the abuses.”

 

            34. Small landlord David Ferguson said that the pendulum has swung too far on the side of tenants, and that small landlords are being abused.  Mr. Ferguson said that he was a Socialist in college but, “you’ve gotta grow up.”

 

            35. Michelle Horneff, President of the Professional Property Management Association, said that her organization supports the proposal.  Ms. Horneff read from a letter in which the tenants, who live in England, admit that their unit is being used as storage for their wedding presents.

 

      Upon the conclusion of the Public Hearing at 8:00, the Commissioners discussed the proposed regulation.  Commissioner Hobson suggested that the Board eliminate voter registration because it is a meaningless criteria; he also told the Board that, when taking care of his sick mother, he had to come back to his apartment once a month in the face of his landlord’s allegations that he was no longer living there.  Commissioner Marshall raised a concern that many owners will give notice of a rent increase on this ground, knowing that many tenants will simply pay the increase or move, whether or not the increase is warranted.  She suggested that the landlord should have to file a petition prior to giving the notice of rent increase; if approved, the increase would be retroactively effective as of the effective date of the landlord’s notice.  Commissioners Lightner and Murphy expressed concerns that there is a due process problem with requiring that a landlord “ask permission first”, since there is no discovery mechanism in the Rent Ordinance.  Commissioner Wasserman referred the Board to Part 5 of the Rules and Regulations, which provides that a landlord must petition for a hearing if they seek to impose a rent increase in excess of limitations.  The landlord would first have to make a prima facie case that the tenant was not a “Tenant in Occupancy” pursuant to the new regulation, and then the burden would shift to the tenant to prove that he or she used the premises as their principal place of residence.

 

      Commissioner Becker was concerned regarding “ambiguities” in the language regarding which situations would be covered by the proposed language, and in which temporary circumstances tenants would still retain their rent control protections.  Commissioner Justman indicated that he wanted to ensure that the regulation affected the situations the Board wanted to target, and he was willing to entertain suggestions to make clear what was covered and what was not.  Commissioner Lightner crafted specific language to address Commissioner Becker’s concerns, which was agreeable to Commissioner Justman.  The Board did not specify how long a tenant could go away to school and still be considered a “Tenant in Occupancy.”  While Commissioner Justman said that he did not have a problem with someone leaving for up to two years to further their education, “if it gets up to six, it becomes a problem.”  These questions will be decided on a case-by-case basis.  Commissioner Marshall was also concerned that the Board not “inadvertently amend Rules and Regulations Section 6.14.”  The Commissioners agreed that nothing in the new regulation would affect co-tenants or approved sub-tenants who had not been given 6.14 notices or who were not subject to a Costa-Hawkins increase.  Therefore, if any tenant who meets the Rent Ordinance definition of tenant resides in the unit as their principal place of residence, including co-tenants and approved subtenants, an unlimited rent increase would not be approved pursuant to this regulation.

 

      With the addition of the requirement that a landlord petition for a rent increase on this basis, and the additional language referenced above, the Board passed the proposed regulation pursuant to the below motion:

 

                                    MSC: To pass new Rules and Regulations Section 1.21, defining “Tenant in Occupancy”, as amended, to be effective immediately.  (Lightner/Gruber:  3-2; Becker, Marshall dissenting)

 

      The new Section, which pertains to rent increase limitations only, and does not remove the requirement that there be “Just Cause” for eviction, reads as follows below:

      Section 1.21 Tenant In Occupancy

            A tenant in occupancy is an individual who otherwise meets the definition of tenant as set forth in Ordinance Section 37.2(t), and who resides in a rental unit as his or her principal place of residence. Occupancy does not require that the individual be physically present in the unit at all times or continuously, but it must be his or her usual place of return. Evidence that a unit is the individual’s "principal place of residence" includes, but is not limited to, the following elements, a compilation of which lends greater credibility to the finding of “principal place of residence” whereas the presence of only one element may not support such a finding:

 

      (1)  the subject premises are listed as the individual’s place of residence on any motor vehicle registration, driver’s license, voter registration, or with any other public agency, including Federal, State and local taxing authorities;     

 

                 (2)  utilities are billed to and paid by the individual at the subject premises;

 

(3)  all of the individual’s personal possessions have been moved into the subject premises;

 

(4)  a homeowner’s tax exemption for the individual has not been filed for a different property;

 

(5)  the subject premises are the place the individual normally returns to as his/her home, exclusive of military service, hospitalization, vacation, family emergency, travel necessitated by employment or education, or other reasonable temporary periods of absence.

 

Section 5.10  Who must file

 

Landlords who seek to impose rent increases which exceed the rent increase limitations set forth in Section 4 above, must petition for an arbitration hearing.  Landlords who seek a determination that a tenant is not a tenant in occupancy pursuant to Section 1.21 above must petition for an arbitration hearing prior to issuing a notice of rent increase on such grounds.  Any petition seeking a determination that a tenant is not a tenant in occupancy shall be expedited.

 

            VII.            Communications

 

      In addition to correspondence regarding the subject of the Public Hearing and cases on the appeals calendar, the Commissioners received the following communications:

 

            A.  Office workload statistics for the month of April, 2001.

 

            B.  A current list of Rent Ordinance amendments.

 

            C.  The annual report to the Board of Supervisors on the number of eviction notices filed with the Department.

 

            VIII.            Director’s Report

 

      The Board welcomed back Executive Director Joe Grubb.  Deputy Director Delene Wolf informed the Commissioners that the hearing in the case of Quigg v. S.F. Rent Board has been continued until June 13th at 9:30 a.m. in Dept. 302 of Superior Court.

 

            IX.            Old Business

 

            A.  Goodwin v. Rent Board  (Superior Court Case No. 317339

 

      The Deputy Director informed the Board that Judge Garcia granted the landlord’s Writ on April 30, 2001.  While the Judge did not specifically order that the Board grant the landlord 7% rent increases based on increased operating expenses, the only basis for disallowing the increases was found not to be warranted by the Judge.  In order that the landlord not pursue a constitutional challenge to the 7% limitation on operating and maintenance expense increases, the Board passed the below motion:

 

                                    MSC: Pursuant to the Court Order in Superior Court Case No. 317339, to remand the case on the record to the Administrative Law Judge to grant the landlord’s petition for 7% rent increases based on increased operating expenses.  (Gruber/Lightner:  5-0)

 

B.  Proposed New Rules Section 6.15C(3), Requiring that a Master Tenant Pay a Pro-Rata Share of the Rent

 

                        Discussion of this proposal was continued to the June 19th meeting.

 

            X.            Calendar Items

 

            June 12, 2001 - NO MEETING

 

            June 19, 2001

            6 appeal considerations

            Executive Session: 

                  Larsen v. Rent Board (Superior Court Case No. 319390)

            Old Business:  Proposed New Rules Section 6.15C(3)

     

      Pursuant to Rules Section 2.18, and due to the July 4th Holiday, the Board voted as follows below:

 

                                    MSC: To waive Rules and Regulations Section 2.13(a) and not schedule a Board meeting on the 1st Tuesday in July, which is July 3rd.  The first meeting of the Board in July shall be on July 10th.  (Gruber/Justman:  5-0)

 

            XI.            Adjournment

 

      President Wasserman adjourned the meeting at 10:00 p.m.

Last updated: 6/5/2012 11:16:34 AM