May 04, 1999B>
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, May 4, 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 6:02 p.m.
II. Roll Call
Commissioners Present: Becker; Bierly; Lightner; Marshall; Mosser; Murphy; Wasserman.
Staff Present: Grubb; Wolf.
Commissioner Gruber appeared on the record at 6:04 p.m.; Commissioner Justman arrived at the meeting at 6:09 p.m.; and Commissioner Moore appeared at 6:15 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of April 20, 1999.
(Murphy/Mosser: 5-0)
IV. Old Business
A. Costa-Hawkins (Civil Code Section 1954.53)
The Board continued their discussion of issues associated with the implementation of the Costa-Hawkins Rental Housing Act of 1995. The Commissioners went through a final draft of suggested amendments to the Rent Ordinance prepared by Deputy City Attorney Marie Blits. The Board clarified their position that when there are serious health or safety code violations that have remained unabated for the six months preceding the vacancy, the landlord has the right to establish the initial rent, but not subsequent rents; changed the title of subsection 37.a(8)(A) to "Property Owner Rights to Establish Initial and All Subsequent Rental Rates for New Construction and for Separately Alienable Parcels" by omitting the underlined language regarding new construction; and amended subsection 37.a(8)(B) to read as follows:
(B) Conditions for Establishing the Initial Rental Rate Upon Sublet or Assignment. Except as identified in this Subsection, nothing in this Subsection 37.3(a)(8)(B) or any other provision of law of the City and County of San Francisco shall be construed to preclude express establishment in a lease or rental agreement of the rental rates to be applicable in the event the rental unit subject thereto is sublet, and nothing in this Subsection shall be construed to impair the obligations entered into prior to January 1, 1996. (new language underlined)
Additionally, Subsection 37.3(a)(8)(B)(ii) was amended as follows below:
(ii) This Subsection shall not apply to partial changes in occupancy of a dwelling or unit where one or more of the occupants of the premises, pursuant to the agreement with the owner provided for above (37.3(a)(8)(B), remains an occupant in lawful possession of the dwelling or unit, or where a lawful sublessee or assignee who resided at the dwelling or unit prior to January 1, 1996, remains in possession of the dwelling or unit. Nothing contained in this Subsection 37.3(a)(8)(B) shall be construed to enlarge or diminish an owner’s right to withhold consent to a sublease or assignment. (new language underlined)
After discussion and agreement on the above changes, the Board voted as follows:
MSC: To forward proposed amendments to the Rent Ordinance in order to conform it to the provisions of the Costa-Hawkins Rental Housing Act of 1995 (Civil Code Section 1954.53) to the Board of Supervisors. (Lightner/Gruber: 5-0)
President Wasserman will prepare an accompanying letter informing the Board of Supervisors that this proposal is the result of the Board’s endeavor to bring the Rent Ordinance into compliance with State law. Executive Director Grubb will work on lining up a member of the Board of Supervisors to sponsor the proposed amendments.
B. Rent for Non-Comparable Replacement Units
{Ordinance Section 37.9(a)(8)(iv)} -- Proposition G
The Board continued their discussion of the requirement in Ordinance Section 37.9(a)(8)(iv) that, when evicting for owner-occupancy, if no comparable vacant unit owned by the landlord is available, the landlord must offer any non-comparable unit that becomes available prior to recovery of possession of the unit. The rent for the unit shall be based on the rent the tenant is paying, adjusted in accordance with size, amenities, etc., and disputes concerning the initial rent for the replacement unit shall be determined by the Rent Board. Presently, staff is receiving inquiries from tenants and landlords who are disputing the appropriate initial rent amount. Pending the enactment of Rules and Regulations on this issue, Senior Staff has developed forms and procedures for making such rent determinations, which could be initiated by either a landlord or a tenant. At the last meeting, Commissioner Murphy expressed his concern that this provision of Proposition G is in contravention of Costa-Hawkins, and requested that Deputy City Attorney Marie Blits provide the Board with an opinion as to their authority to enact Rules and Regulations to implement provisions of the Ordinance that may be unconstitutional.
Ms. Blits informed the Commissioners that, since Proposition G was enacted by the voters, it is questionable as to whether the Board can override any of its provisions. Rather, the Commission is charged with interpreting and applying the Ordinance in accordance with existing law, including Costa-Hawkins. Two cases challenging Proposition G and the Conditional Use Permit requirement for owner-occupancy will be heard before Judge Garcia later in the month, which may provide some guidance. In the meantime, the Board passed the following motion:
MSC: To go forward with the procedures suggested by staff to determine the initial rent for non-comparable replacement units pursuant to Ordinance Section 37.9(A)(8)(iv) so long as the replacement unit is a covered rental unit as defined in Ordinance Section 37.2(r).
Justman/Becker: 3-2; Gruber, Murphy dissenting)
C. Interest Rate When Capital Improvement Work is Financed With a Variable Rate Mortgage
Due to the lateness of the hour, discussion of this issue was continued to the meeting on June 29th.
V. Communications
The Board received a Memorandum from Senior Hearing Officer Sandy Gartzman regarding the Minute Order Pilot Project and a letter from Eric Andresen, President of the Professional Property Management Association of San Francisco, in support of amendments to Rules Section 6.15 proposed by Commissioner Lightner.
VI. Remarks from the Public
A member of the public addressed the Board regarding the issue of "Pied a Terres". He informed the Board that a twenty-year tenant in a building owned by his mother actually resides in Arizona, but the rent on her unit is very low because she is protected by the Rent Ordinance. He believes that this restricts the availability of residential units to San Francisco tenants.
VII. New Business
Proposed Amendments to Rules and Regulations Section 6.15
In response to an increase in absolute prohibitions against subletting and assignment in leases and rental agreements, Supervisor Leno has introduced legislation that would: (1) make a landlord’s unreasonable refusal to allow replacement roommate(s) grounds for a rent reduction, even where there is an absolute prohibition; and (2) prohibit eviction for breach if the tenant is in violation of an absolute prohibition against subletting or assignment. In response to this proposed legislation, Commissioner Lightner introduced two alternative approaches to this problem: the first would consider the approval of a sub-lease in the face of an absolute prohibition to be an increase in services, warranting an increase in rent; and the second would define a narrow set of circumstances under which a tenant’s breach of an absolute prohibition would not be grounds for eviction. This issue will be discussed at the meeting on June 29th.
VIII. Calendar Items
May 11, 1999 - NO MEETING
May 18, 1999
9 appeal considerations
6:00 Public Hearing: Non-Residential Use of a Unit
{Proposed Rules Section 1.17(i)}
IX. Adjournment
President Wasserman adjourned the meeting at 10:15 p.m.