MINUTES OF THE PUBLIC HEARING REGARDING THE SAN FRANCISCO
HOUSING STUDY
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Wednesday, May 24, 2000 at 12:00 noon in
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Room 400, City Hall, 1 Carlton B. Goodlett Place
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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:
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- 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.
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- 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.
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- 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.
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- 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.
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- 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.
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- 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.
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- 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.
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- 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."
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- 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.
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- 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.
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- 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."
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- 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."
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- 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.
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- Marie Pennington said that big owners, not small, are the problem.
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- 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.
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- 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."
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- 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.
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- 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."
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- 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."
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- 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.
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- 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.
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- 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?
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- 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.
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- 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."
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- 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.
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- 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.
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- 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.
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- 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.
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- 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.
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- 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
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- owner-occupants and landlords in terms of income, whether they own
other buildings, and whether they live somewhere else.
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- 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."
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- 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.
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- 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.
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- 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.
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- 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.
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- 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."
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- 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.
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- 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.
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- 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.
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- 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.
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- 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.
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- 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."
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- 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.
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- 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.
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- 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."
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- 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."
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- 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.
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- 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.
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- 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.
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- 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."
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- Carol Bayer spoke again, stating that for rents that are considerably
less than "market", there should be some relief.
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- 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.
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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.
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