April 25, 2000

MINUTES OF THE REGULAR MEETING OF

THE SAN FRANCISCO RESIDENTIAL RENT

STABILIZATION & ARBITRATION BOARD,

Tuesday, April 25, 2000 at 6:00 p.m. at

City Hall, Room 408

I. Call to Order

President Wasserman called the meeting to order at 6:12 p.m.

II. Roll Call

Commissioners Present: Becker; Bierly; Hobson; Lightner; Marshall; Mosser; Murphy; Wasserman.

Commissioners not Present: Gruber.

Staff Present: Gartzman; Grubb; Wolf.

Commissioner Justman appeared on the record at 6:32 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of March 21st and April 4th, 2000.

(Mosser/Lightner: 5-0)

IV. Old Business

Rules and Regulations Section 6.14

Commencing at 6:14 p.m., the Board held a Public Hearing on proposed revisions to Rules and Regulations Section 6.14 in order to conform that Section with Costa-Hawkins (Civil Code Section 1954.53) Thirty-two individuals, sixteen tenants or tenant representatives and sixteen landlords or landlord representatives, spoke as follows below:

1. Robert Pender of the Tenants’ Network said that the proposed revisions are "unfair" and will lead to the eviction of roommates due to "technicalities."

2. Michelle Horneff, President of the Professional Property Managers’ Association, expressed her disappointment that the new regulation is "more confusing than what we already have." She thanked the Commissioners for all their hard work but said that using new terms, even if only for this section of the Regs., is confusing.

3. Tenant representative Joseph Patrick Michael Lacey told the Board that he should have shot Jim Costa years ago, and remarked on how nice it was to see everyone again.

4. Tenant David Foley told the Board that he previously lived in an area without rent control, and his rent went up $500 in one year. Now, since he moved into his present unit after January, 1996 and the original tenant is leaving, he is facing another large rent increase which will force him to move again.

5. Landlord Andrew Long said that the proposal is a "step in the right direction", but could be simplified, and that revolving roommates lead to no turnover and no revenue for landlords to fix up their buildings.

6. Tenant Kennedy Helm found the proposal to be "quite complicated" and said that it will lead to evictions. Mr. Helm asked why a landlord should be able to reserve their right to a future rent increase.

7. Tenant Gary Gregerson works at the ARC, a non-profit organization providing services to the developmentally disabled, where he makes $21,000 per year. Mr. Gregerson fears that individuals who work for non-profit social service providers will be unable to afford to remain in San Francisco.

8. Landlord Teresa Gonio informed the Board that she "doesn’t have to follow these laws"; she asserted that she never has, and never intends to. She contended that a tenant could bring in "Jack the Ripper" as a replacement roommate.

9. Tenant Stanley Lamantagne says he also works in the non-profit sector at very low wages and has a roommate who will be moving out.

10. Rebecca Graf of the Housing Rights Committee told the Board that her organization counsels over 200 tenants per month and that roommates are a big issue. She believes that the current 6.14 allows for stability, but that the proposed changes go beyond the requirements of Costa-Hawkins. She asked that tenants living in units with the knowledge of the landlord and without 6.14 notices be protected.

11. Quintin Mecke from Supervisor Ammiano’s Office read a statement from the Supervisor asking that the Board not contribute to San Francisco’s housing crisis by forcing long-term residents into subtenancy status.

12. Miguel Wooding of the Tenants’ Union and Eviction Defense Collaborative said that the proposed amendments are "slightly less bad" than prior versions. He told the Board that there is no justification for a rent increase in excess of the annual allowable amount without a hearing initiated by the landlord; that the pre-Costa-Hawkins version of 6.14 should be reinstated for pre-1/1/96 tenants; and that family members should automatically have the status of co-tenants.

13. Landlord Bill Quan said that the amendments contain notice requirements not found in Costa-Hawkins; that the proposal makes it too easy for a landlord to "inadvertently waive rights"; and that some sections sound contradictory.

14. Landlord Sonia Ng informed the Board that she belongs to a brand new association of homeowners. She believes that the proposed revisions are "unfair and unconstitutional."

15. Prop I Landlord Marian Halley expressed her view that the requirement of "actual knowledge sets up a game of hide and seek." She believes that this condition is "not business-like and will lead to litigation."

16. Prop I Landlord W. E. Winn, Jr. stated that regulation has reduced the number of small rentals that are available. He said that the "Solomon-like regulation" should require written notification.

17. Prop I Landlord Nancy Tucker also said that the regulation should require written notification from tenants, otherwise, she finds out that there is a new person living in her building by "running into them in the garage." She expressed her view that a 6.14 notice and the departure of the last original tenant renders a unit "legally vacant", which obviates the need for a hearing.

18. Brenton Holland, manager of the Fox Plaza Apartments, asked what happens if the last original tenant has already vacated, but more than 90 days have passed and the landlord has not noticed an increase nor reserved their right to do so. He also asked if the apartment were not the tenant’s principal place of residence, would that mean they were no longer "permanently residing" on the premises?

19. Jeff Woo of the Tenants’ Union remarked on the extent of the housing crisis and asked why there are so many landlords if it’s "such a hardship."

20. Tom Ramm of the Small Property Owners’ Association said that no other agreements allow for a change in the parties to the agreement without it being put in writing. Since landlords are required to document everything in writing, tenants should also be required to do so.

21. Landlord Peter Chin said that he is concerned about tenants as well as landlords, but said the choice is between "over-regulation" and increasing the supply of housing.

22. Janan New of the S.F. Apartment Association thanked the Board for the time and energy they’ve put into the proposed amendments, but asked for guidance from the Board in terms of implementation.

23. Shawn O’Hearn said that the Ellis Act, etc. has "deconstructed rent control"; that landlords have a right to know who lives in their units, but not to "wreak havoc"; and said he is not sympathetic with how much work it is to make money.

24. Kim Stryker of SPOG said that tenants get to enjoy the benefits of rent control while they live in a unit but, once they leave, the landlord should get market rent. She asked that the law be kept simple.

25. Landlord George Wong said that landlords are afraid to come to the Rent Board because they believe that the Board protects tenants, but that the amended Rule seems "more in favor of landlords."

26. Tenant Deetje Boler expressed a wish that no legislation be passed that would make anyone unable to afford housing. She suggested that the Board go to the Mayor and Board of Supervisors and ask them to lobby the Federal government for additional housing funds.

27. Landlord Tommy Tong told the Board that he spent $20,000 to repair his unit and that the water bill is extremely high, but that the tenants don’t pay it and therefore don’t care.

28. Tenant Fran Taylor told the Board that she had been evicted twice for owner-occupancy and said that "achieving a vacancy shouldn’t be the goal" because a home is more important than more money.

29. Tenant Mani Niall is a recent arrival who pays his rent to a Master Tenant who says that the landlord doesn’t want to know who the tenants are.

30. Chris Daley of Mission Agenda informed the Board that, because of the housing crisis, the Mission is no longer predominantly Latino and said that the diverse fabric of San Francisco is being threatened. He asked that the Commissioners "comply with Costa-Hawkins but don’t go overboard." He suggested that they lobby Sacramento.

31. Landlord Robert Barbagelata told the Board that he has a tenant who lives somewhere else but comes back to the unit 3-4 days per month and has a friend or relative living there. He asked that the Board define "permanent residence" in the regulation.

32. Tenant Lisa Williams stated that the burden of proof regarding the issuance of a 6.14 notice mostly falls on tenants already; that landlords should know who lives in their units; and that 60 days for issuance of the notice is reasonable.

Upon conclusion of the public testimony at 7:26, President Wasserman closed the hearing and reminded those assembled that amendments to Rules Section 6.14 were necessitated by changes in State law, to which local law must conform. Commissioner Lightner expressed a preference for not creating a new definition of "co-tenant", since many people think they know what is meant by that term, and could be confused. In order to stay consistent with the terms "original occupant" and "subsequent occupant", the term "co-occupant" was settled on for those persons who did not move in at the inception of the tenancy, but have the same rights as original occupants because of the direct relationship they have with the landlord. Commissioner Hobson stated his belief that written notice should be required as a benefit to both tenants and landlords. Commissioner Becker asked that the definition of "co-occupant" be changed to read "a subsequent occupant who has a rental agreement under California law directly with the owner (additions underlined). The Board then voted as follows:

MSC: To approve the proposed amendments to Rules and Regulations Section 6.14 with the following change: under Section (a) Definitions, and wherever else that term is used in Section 6.14, the term "co-tenant" shall now be "co-occupant." (Lightner/Mosser: 3-2; Becker, Marshall dissenting)

New Section 6.14, effective April 25, 2000, reads as follows below:

Section 6.14 Establishing Rental Rates for Subsequent Occupants

(Added March 7, 1989; amended August 29, 1989; Subsection (e) added February 14, 1995; repealed and adopted April 25, 1995, effective February 14, 1995; Subsections (a), (b), (c), (d) and (e) amended and renumbered July 2, 1996; amended in its entirety April 25, 2000)

(a) Definitions. The following terms have the following meaning for purposes of this Section 6.14:

(1) "Original occupant(s)" means one or more individuals who took possession of a unit with the express consent of the landlord at the time that the base rent for the unit was first established with respect to the vacant unit.

(2) "Subsequent occupant" means an individual who became an occupant of a rental unit while the rental unit was occupied by at least one original occupant.

(3) "Co-occupant" for purposes of this Section 6.14 only, is a subsequent occupant who has a rental agreement directly with the owner.

(b) Subsequent Occupants who commenced occupancy before 1/1/96; Co-occupants who commenced occupancy before, on or after 1/1/96. When all original occupant(s) no longer permanently reside in the rental unit, the landlord may raise the rent of any subsequent occupant who resided in the unit prior to January 1, 1996, or of any subsequent occupant who is a co-occupant and who commenced occupancy before, on or after January 1, 1996, without regard to the limitations set forth in Section 37.3(a) of the Rent Ordinance if the landlord served on the subsequent occupant(s), within a reasonable time of actual knowledge of occupancy, a written notice that when the last of the original occupant(s) vacates the premises, a new tenancy is created for purposes of determining the rent under the Rent Ordinance. Failure to give such a notice within 60 days of the landlord’s actual knowledge of the occupancy by the subsequent occupant(s) establishes a rebuttable presumption that notice was not given within a reasonable period of time. If the landlord has not timely served such a notice on the subsequent occupant(s), a new tenancy is not created for purposes of determining the rent under the Rent Ordinance when the last of the original occupant(s) vacates the premises.

(c) Subsequent Occupants who are not Co-occupants and who commenced occupancy on or after 1/1/96, where the last Original Occupant vacated on or after 4/25/2000. When all original occupant(s) no longer permanently reside in a rental unit, and the last of the original occupants vacated on or after 4/25/2000, the landlord may establish a new base rent of any subsequent occupant(s) who is not a co-occupant and who commenced occupancy of the unit on or after January 1, 1996 without regard to the limitations set forth in Section 37.3(a) of the Rent Ordinance unless the subsequent occupant proves that the landlord waived his or her right to increase the rent by:

(1) Affirmatively representing to the subsequent occupant that he/she may remain in possession of the unit at the same rental rate charged to the original occupant(s); or

(2) Failing, within 90 days of receipt of written notice that the last original occupant is going to vacate the rental unit or actual knowledge that the last original occupant no longer permanently resides at the unit, whichever is later, to serve written notice of a rent increase or a reservation of the right to increase the rent at a later date; or

(3) Receiving written notice from an original occupant of the subsequent occupant’s occupancy and thereafter accepting rent unless, within 90 days of said acceptance of rent, the landlord reserved the right to increase the rent at a later date.

Where the landlord has waived the right to increase the rent under subsection (c)(1) or (c)(3) above, the subsequent occupant to whom the representation was made or from whom the landlord accepted rent shall thereafter have the protection of an original occupant as to any future rent increases under this Section 6.14. Where the landlord has waived the right to increase the rent under subsection (c)(2) above, any subsequent occupant who permanently resides in the rental unit with the actual knowledge and consent of the landlord (if the landlord’s consent is required and not unreasonably withheld) at the time of the waiver shall thereafter have the protection of an original occupant as to any future rent increases under this Section 6.14.

(d) Subsequent Occupants who are not Co-occupants and who commenced occupancy on or after 1/1/96, where the last Original Occupant vacated prior to 4/25/2000. When all original occupants no longer permanently reside in a rental unit and the last of the original occupants vacated prior to 4/25/2000, the landlord may establish a new base rent for any subsequent occupants who are not co-occupants and who commenced occupancy of the unit on or after January 1, 1996 without regard to the limitations set forth in Section 37.3(a) of the Rent Ordinance if:

(1) The landlord served on the subsequent occupant(s), within a reasonable time of actual knowledge of occupancy, a written notice that when the last of the original occupants vacates the premises, the new tenancy is created for purposes of determining the rent under the Rent Ordinance. Failure to give such a notice within 60 days of the landlord’s actual knowledge of the occupancy by the subsequent occupant(s) establishes a rebuttable presumption that notice was not given within a reasonable period of time; or

(2) The landlord is entitled to establish a new base rent under the Costa Hawkins Rental Housing Act, California Civil Code Section 1954.53(d), even if no notice was served on the subsequent occupant(s) pursuant to subsection (d)(1) above.

(e) Subsequent Occupants of Proposition I Affected Units. When all original occupant(s) no longer permanently reside in a Proposition I Affected Unit, the landlord may raise the rent of any subsequent occupant who resided in the unit prior to February 15, 1995 without regard to the limitations set forth in Section 37.3(a) of the Rent Ordinance if the landlord served on the subsequent occupant(s), on or before August 15, 1995, a written notice that when the last of the original occupant(s) vacates the premises, a new tenancy is created for purposes of determining the rent under the Rent Ordinance. If the landlord has not timely served such a notice on the pre-February 15, 1995 subsequent occupant(s) of the Proposition I Affected Unit, a new tenancy is not created for purposes of determining the rent under the Rent Ordinance when the last of the original occupant(s) vacates the premises. For subsequent occupants who commenced occupancy in a Proposition I Affected Unit on or after February 15, 1995, the provisions of subsections (a) through (d) above apply.

(f) This Section 6.14 is intended to comply with Civil Code Section 1954.50 et seq. and shall not be construed to enlarge or diminish rights thereunder.

V. Communications

The Commissioners received a copy of a letter from landlord Robert Barbagelata regarding the proposed revisions to Rules Section 6.14 and a copy of the Annual Report on Eviction Notices provided by the Department to the Board of Supervisors.

VI. Director’s Report

Executive Director Grubb informed the Commissioners that the Costa-Hawkins amendments to the Rent Ordinance suggested by the Rent Board to the Board of Supervisors will be heard at the Housing and Social Policy Committee on Tuesday, May 2nd, at 10:00 a.m.

VII. Remarks from the Public

Miguel Wooding of the Tenants’ Union told the Commissioners that they had just "made an obscure law more obscure." Mr. Wooding felt strongly that, since "having a rental agreement’s what tenancy’s all about", the departure from the word "co-tenant" will make it more difficult for tenants to obtain their rights.

VIII. Calendar Items

May 2, 2000

8 appeal considerations (1 cont. from 3/21/2000; 1 cont. from 4/4/2000)

May 9, 2000 - NO MEETING

IX. Adjournment

President Wasserman adjourned the meeting at 8:40 p.m.