June 29, 1999B>
MINUTES OF THE REGULAR
MEETING OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION & ARBITRATION
BOARD,
Tuesday, June 29, 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 6:03 p.m.
II. Roll Call
Commissioners Present: Becker; Bierly; Gruber;
Lightner; Wasserman.
Commissioners not Present: Justman; Murphy.
Staff Present: Grubb; Wolf.
Commissioner Marshall appeared on the record
at 6:05 p.m.; Commissioner Mosser arrived at the meeting at 6:07 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of June 15, 1999.
(Becker/Marshall: 3-0)
IV. Remarks from the Public
A. Landlord Tom Garber addressed the issue
of interest rates when capital improvement work is financed with a variable
rate mortgage. He informed the Board that all available loans for such
purposes are variable; that he is currently paying 12%; and that business
loans charge 3-1/2 - 4% above prime.
B. A landlord stated her belief that under rent
control, landlords are treated badly and that rental units are being taken
off the market as a result.
V. Public Hearing
Ellis Act Amendments
At the request of President Wasserman, Senior
Hearing Officer Sandy Gartzman explained that she had proposed that the
Board delete Rules and Regulations Section 12.18 because the procedures
contained therein currently make it difficult for landlords to exercise
their right to withdraw units from the rental market; and that the Regulations
are unnecessary, in that all necessary procedures are contained in the
Rent Ordinance. At 6:11 p.m. a Public Hearing on the proposed change to
the Rules and Regulations was convened, which was concluded at 6:21 p.m.
The following individuals spoke as follows below:
A. Landlord Anthony Schultz, owner of a 3-unit
building, said that his building is "falling down", and he needs to take
it out of rental use in order to work on it.
B. Janan New from the S.F. Apartment Association
thanked staff and the Commissioners for recommending necessary amendments
to bring the Rules and Regulations into compliance with State law, and
stated her belief that other areas of the Rules and Regs. also need to
be amended for this reason.
Upon conclusion of the public testimony, the Board
voted as follows:
MSC: To delete Rules and Regulations Section
12.18 in its entirety. (Lightner/Becker: 5-0)
Ms. Gartzman then gave the Commissioners a Memorandum
regarding procedures that staff will follow to implement the Board’s action
prior to the Board of Supervisors’ acting on recommended changes to the
Ellis provisions of the Rent Ordinance {Ordinance Section 37.9(a)(13)}.
V. Consideration of Appeals
A. 73 Cumberland St. T001-62A
(cont. from 6/15/99)
The landlords’ petition for certification of
capital improvement costs was granted, in part. The costs of construction
of a rear porch and deck were disallowed to the tenants in two units pursuant
to Rules and Regulations Section 7.12(b) ("The 6-Month Rule"). On appeal,
the landlords claim that, while some of the preliminary architectural and
engineering design work occurred prior to the move-in date of the tenants
in one unit, the physical construction did not commence until ten months
after the move-in date. They contend that prior cases have held that the
date the actual physical construction commenced should be used for triggering
the 6-Month Rule.
MSC: To accept the appeal and remand the case
for a hearing to determine what representations, if any, were made to the
tenants at the inception of the tenancy regarding the capital improvement
project.
(Becker/Marshall: 4-1; Gruber dissenting)
B. 469 - 8th Ave. T001-63A
(cont. from 6/15/99)
The tenant’s petition alleging substantial
decreases in housing services was granted, in part, and the landlords were
found liable to the tenant in the amount of $4,972.50 due to habitability
defects on the premises. On appeal, the landlords claim that: they should
not be liable for problems that existed prior to their purchase of the
property; they never received letters from the tenant regarding defects
on the premises; the tenant has been uncooperative in providing access
to the premises and has failed to move her belongings so that the ceiling
could be painted; and the light over the mantle did not need repair as
it was not broken.
MSC: To accept the appeal and remand the case
for a hearing to determine whether any of the conditions have been abated
and, if so, the date the rent reductions should terminate. (Marshall/Becker:
3-2; Gruber, Lightner dissenting)
VII. Communications
In addition to correspondence concerning cases
on the calendar, the Commissioners received the following communications:
A. A letter from Attorney Nancy Lenvin on behalf
of the Housing Industry Policy Council (HIPC) requesting that the Board
amend Rules and Regulations Section 6.14 in light of the Costa-Hawkins
Rental Housing Act.
B. The office workload statistics for the month
of May, 1999.
VIII. Director’s Report
Executive Director Grubb reported that the
departmental budget was approved by the Board of Supervisors. The Supervisors
added an additional hearing officer position to those that had been requested
by the department. That position has been placed on reserve, and the funds
will be released only if necessary.
IX. Old Business
A. Interest Rate When Capital Improvement Work
is Financed With a Variable Rate Mortgage
The Board continued their discussion of a proposal
by Commissioner Lightner to raise the rate of interest allowed landlords
who finance capital improvement work with a variable rate loan, since the
imputed interest rate is currently less than the "teaser rate" on such
loans. The possibility of having three different interest rates was examined:
one for fixed rate loans; one for variable rate loans; and an imputed interest
rate. In conjunction with retention of the 10% "cap" on interest, Commissioner
Wasserman asked to see interest rate indexes for the past several years.
Discussion of this issue will be continued at the July 20th meeting.
B. Proposed Amendments to Rules and Regulations
Section 6.15
Discussion of proposed amendments to Rules
Section 6.15 authored by Commissioner Lightner to address rent increase
and eviction issues where there is an absolute prohibition against subletting
and assignment was continued until the meeting on July 20th. Supervisor
Leno has introduced legislation addressing this issue which will be considered
at a continued meeting of the Housing and Land Use Committee on July 6th.
C. Translation Services
In response to several requests from the Chinese
community, and at the Board’s direction, Mr. Grubb investigated the costs
of providing translation services at Board meetings and Public Hearings.
Translators charge $120 per hour, with a 2-hour minimum. In order to make
such translation effective, transmitters and ear pieces would need to be
purchased at a cost of approximately $5,000.00. Since such expenditures
were not budgeted for, the Commissioners suggested that the Director investigate
the possibility of borrowing the necessary equipment from another agency.
The Board will attempt to provide translation for all Public Hearings and
at regular Board meetings only upon request.
D. Minute Order Program
Senior Hearing Officer Sandy Gartzman informed
the Board that the Minute Order Pilot Project is now 6 months old, and
is an unqualified success. An average of 20 Minute Orders are issued each
month and, out of approximately 100 Minute Orders, there has only been
one request for issuance of a full decision. The Board gave the continuation
of this program their blessing, and thanked Ms. Gartzman and the hearing
officer staff for their hard work on this enhancement of the agency’s service
to the public.
IV. Remarks from the Public (cont.)
C. A landlord informed the Board that a fire
in her building was caused by an illegal sublessee, and that she is now
facing a lawsuit for wrongful eviction.
D. A landlord spoke about the pending legislation
sponsored by Supervisor Leno, and expressed his belief that tenants should
be required to submit prior written notice prior to subletting because
subtenants are moving in prior to submitting rental applications.
E. Landlord Gary Briggs expressed his belief
that San Francisco neighborhoods are "run down" because the capital improvement
certification process is too complicated and the interest rates allowed
are too low. He also contended that, because of subletting, in most cases
the tenants who signed the lease with the landlord are no longer living
in the unit.
F. A Chinese speaker said that the translation
services provided were inadequate and requested that the Board borrow transmitters
and ear pieces from City Hall.
G. A landlord asked who is liable if a sublessee
turns out to be a criminal, and said that revolving roommate situations
are more like hotels than residential units.
H. A landlord expressed support for expenditures
for translation services. He said that he lives in his building, and that
his tenants shouldn’t get to decide who lives with him. He suggested that
the Board institute a "residency requirement" in order to address the issue
of "pied a terres."
X. New Business
Commissioner Protocols
Commissioner Lightner relayed concerns from
the landlord community about the way that the Housing and Land Use Committee
of the Board of Supervisors hearing on the Leno legislation was conducted
on June 1st. She said that, because Tenant Commissioners Marshall and Becker
spoke without time limitations, it appeared to some people that the Rent
Board had sponsored the proposed legislation.
XI. Calendar Items
July 6, 1999
8 appeal considerations
July 13, 1999 - NO MEETING
July 20, 1999
10 appeal considerations (1 cont. from 6/1/99)
Old Business:
A. Interest Rate When Capital Improvement Work
is Financed With a Variable Rate Mortgage
B. Proposed Amendments to Rules and Regulations
Section 6.15
XII. Adjournment
President Wasserman adjourned the meeting at
9:00 p.m.