January 19, 1999B>
MINUTES OF THE REGULAR
MEETING OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION & ARBITRATION
BOARD,
Tuesday, January 19, 1999 at 6:00 p.m.
at
25 Van Ness Avenue, Suite 70, Lower Level
I. Call to Order
President Wasserman called the meeting
to order at 6:05 p.m.
II. Roll Call
Commissioners Present: Becker; Bierly;
Gruber; Justman; Lightner; Marshall; Moore; Mosser; Murphy; Wasserman.
Commissioners not Present: Mosser; Murphy.
Staff Present: Grubb; Wolf.
Commissioner Gruber appeared on the record
at 6:07 p.m.; Commissioner Marshall appeared at 6:10 p.m.; Commissioner
Moore at 6:20 p.m.; and Commissioner Justman arrived at the meeting at
6:25 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of January
5, 1999.
(Bierly/Becker: 3-0)
IV. Remarks from the Public
Landlord Dennis Breen pointed out what
he believes to be an inconsistency in the way that Rent Board policy is
applied: in a Decision of Hearing Officer, he was found liable to the tenant
for a $.01 overcharge due to "rounding-up", however, the annual allowable
rent increase amount is "rounded down" {from 1.74% to 1.7%).
V. Consideration of Appeals
A. 1000 North Point St. #1103
T001-27R
(cont. from 12/15/98)
The tenant filed a petition alleging a
substantial decrease in housing services, the landlord’s failure to repair
and an unlawful increase in rent. The petition was dismissed without hearing
due to lack of jurisdiction because the hearing officer determined that
the subject building is a non-profit cooperative owned, occupied and controlled
by a majority of the residents (Ordinance Section 37.2(r)(2). On appeal,
the tenant contended that: the building is subject to the jurisdiction
of the Rent Board because it is not under the direct control of a majority
of the cooperative residents; it is not occupied as required under the
Articles of Incorporation; the rent for the unit may not be directly controlled
or regulated by the corporation; and the landlord is not the corporation
but, rather, individual shareholders who use their non-profit status to
circumvent the Rent Ordinance.
Prior to the meeting, the tenant’s representative
had requested a 90-day extension in order to gather evidence to support
the tenant’s claim of Rent Board jurisdiction over the building. It was
the consensus of the Board members in attendance to continue consideration
of this case to the meeting on January 19, 1999, at which time the tenant’s
appeal should be complete and no further extensions would be granted. A
submission was received at the Rent Board office on the morning of January
19th. Since the landlord’s attorney indicated that he had not received
it, it was not considered by the Board.
MSC: To deny the appeal. (Lightner/Gruber:
5-0)
B. 1939 Hayes St. #3
T001-41R
The landlords’ petition for rent increases
based on increased operating expenses and certification of capital improvement
costs 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. (Lightner/Becker:
5-0)
C. 3150 Clay St.
T001-31A
The landlord’s petition for a 15.2% rent
increase based on the Past Rent History of a Newly Covered Unit under Proposition
I was granted. However, the hearing officer determined overpayments owing
from the landlord to the tenant in the amount of $8,400.00 due to a rent
increase from $1,500 to $1,850.00 in November 1996. On appeal, the landlord
admits to "being unable to compute percentages", and claims to have imposed
the wrongful amount on the advice of Rent Board staff; points out that
the unit has been rented at a below market rent for quite some time; and
the unlawful increase was the first rent increase in ten years.
MSC: To deny the appeal. (Becker/Marshall:
5-0)
VI. Public Hearing
Proposed Amendments to Rules and Regulations
Section 7.14 Concerning Calculation of Imputed Interest on Capital Improvement
Costs
A Public Hearing on the issue of amending
Rules and Regulations Section 7.14 was convened at 6:20 p.m. and concluded
at 6:22 p.m., as only one member of the public was in attendance and asked
a question. Currently, for determining the imputed interest rate for capital
improvement costs, the Board uses the rates for like years for Treasury
Bills as posted on the last day of January in the Wall Street Journal.
However, as there is not always a figure available on that date, the Executive
Director suggested that the Board instead use the Federal Reserve Statistical
Release’s listing of "Selected Interest Rates" for U.S. Treasury instruments
called H.15. H.15 contains a wide variety of daily interest rates that
are published weekly and are readily accessible through the Federal Reserve’s
Web site. The most recent 12 monthly interest rates for both seven and
ten year Treasury Securities will be averaged and go into effect each March
1st, in order to coincide with the posting of the annual allowable rent
increase rate.
MSC: To adopt the proposed amendments
to Rules and Regulations Section 7.14 regarding the calculation of imputed
interest on capital improvement costs, effective March 1, 1999. (Becker/Marshall:
5-0)
The landlord Commissioners noted that their
vote in favor of changing the calculation method was not an endorsement
of the granting of imputed interest only, as opposed to previous regulations
which allowed the legal rate of interest (10%) on all capital improvement
costs. Commissioner Lightner expressed her belief that the current practice
of allowing only the imputed interest rate when capital improvement work
is financed with a variable rate loan is unfair. She will draft language
to rectify this situation, and this issue will be calendared for the next
Board meeting.
VII. Communications
In addition to correspondence concerning
cases on the calendar, the Commissioners received the following communications:
A. A letter from tenant Robert Copeland
thanking the Board and staff for their efforts on his behalf in the eviction
case against his landlord, George Hoffberg, including their referral of
the landlord to the Office of the District Attorney.
B. A letter from Attorney Nancy Lenvin
objecting to the Board’s policies with regard to calculation of imputed
and variable interest on capital improvement costs.
C. The office workload statistics for the
month of November, 1998.
VIII. Director’s Report
Executive Director Grubb went over the
new copy of the Rent Ordinance which incorporates Proposition G, passed
by the voters on the November ballot. Proposition G replaces the prior
version of Ordinance Section 37.9(a)(8) in its entirety. The major differences
between Proposition G and the prior version of 37.9(a)(8) {inclusive of
the Bierman amendments} are that the ownership interest required to evict
reverts back to 25% instead of 50%; and only domestic partners are allowed
to aggregate their ownership interests in order to achieve the requisite
percentage. The Board also briefly questioned the Director about Supervisor
Bierman’s proposal to require that a Conditional Use Permit be obtained
as a condition of an "Ellis" eviction for removal from the rental market.
IX. Old Business
Amendments to the Ordinance and Rules
and Regulations pursuant to Costa-Hawkins (Civil Code Section 1954.53)
will be discussed further with Deputy City Attorney Marie Blits at the
meeting on February 2nd. After remaining Costa-Hawkins issues are resolved,
the Board will begin to work on amendments to the Rules and Regulations
necessitated by the passage of Proposition G.
X. Calendar Items
January 26, 1999 - NO MEETING
February 2, 1999
Old Business:
A. Costa-Hawkins (Civil Code Section 1954.53)
B. Interest Rate When Capital Improvement
Work is Financed with a Variable Rate Mortgage
New Business: Budget
XI. Adjournment
President Wasserman adjourned the meeting
at 7:00 p.m.