June 23, 1998

President Wasserman called the meeting to order at 6:05 p.m.

Commissioners Present: Becker; Bierly; Gruber; Marshall; Moore; Mosser; Wasserman.
Commissioners not Present: Justman; Lightner.
Staff Present: Grubb; Wolf.

Commissioner Murphy appeared on the record at 6:15 p.m.

MSC: To approve the Minutes of June 9, 1998.
(Marshall/Gruber: 4-0)

Nancy Tucker, a Prop. I landlord, asked that the rent law be re-written in English, since she feels that it is presently written for lawyers. George Ju, the landlord involved in the case at 1710 33rd Ave. (S001-50A), asked if it was too late to submit additional documentation in support of his appeal.

1. 1710 - 33rd Ave. S001-50A

   The tenant’s petition alleging substantial decreases in housing services was granted and the landlord was found liable to the tenant in the amount of $2,175.00. Additionally, rent overpayments in the amount of $700.00 were found to be owing from the landlord to the tenant. On appeal, the landlord claims that he never threatened to evict the tenant if he failed to pay the requested rent increase; the tenant had agreed to provide maintenance and repair of the premises, and deducted the costs from the rent; the conditions were not as depicted in the Decision of Hearing Officer; and the Department of Building Inspection found that the violations had been abated.

   Since the tenant’s attorney had not received a copy of the landlord’s appeal, and therefore had not had a chance to respond, this matter was continued to the next meeting.

2. 3955 - 17th St. #8 S001-51A

   The tenant’s petition alleging an unlawful increase in rent based on Rules and Regulations Section 6.14 was granted, and the landlord was found liable to the tenant in the amount of $2,909.07. Neither the landlord nor his attorney appeared at the properly noticed hearing, although the case had been postponed twice previously at the landlord’s request. On appeal, the landlord’s attorney apologizes for a miscommunication between himself and prior counsel for the landlord, and requests another hearing.

   MSC: To deny the appeal. (Marshall/Becker: 4-0)

3. 955 Bush St. #602 S001-87R

   The landlords’ petition for certification of capital improvement costs to the tenants in 21 units was granted, in part. One tenant appeals the decision on the grounds that, since she moved in after the commencement of the seismic retrofit work, it is within the spirit of Rules and Regulations Section 7.12(b) that she should not be charged for the costs.

   MSF: To accept the appeal and remand the case to disallow passthrough of the costs of work that commenced prior to the tenant’s having moved into the unit, pursuant to the spirit of Rules and Regulations Section 7.12(b). (Becker/Marshall: 2-3; Gruber, Murphy, Wasserman dissenting)

   MSC: To deny the appeal. (Gruber/Murphy: 3-2; Becker, Marshall dissenting)

4. 1030 Masonic Ave. #4 S001-88R

   The tenant’s petition alleging substantial decreases in housing services was dismissed due to his failure to appear at the properly noticed hearing. On appeal, the tenant claims that he failed to receive notice of the hearing because the landlord removed locks on the mailboxes at the property in the course of doing capital improvement work, and attaches the requisite Declaration of Non-Receipt of Notice of Hearing.

   MSC: To accept the appeal and remand the case for a new hearing. (Becker/Marshall: 5-0)

In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:

1. A "Senior Protection Fund" resolution authored by Supervisor Teng, which has been referred for consideration to the OMI Task Force.

2. The office workload statistics for the months of April and May, 1998.

3. An article from the June 16th Independent regarding proposals for direct subsidies to low-income tenants in exchange for the elimination of rent control for wealthier tenants, which are being explored by representatives of the landlord and tenant communities.

4. A letter from a landlord suggesting that there be more flexibility when rent increases are warranted; that the amount of interest that must be paid on security deposits be updated; and that the process for obtaining a rent increased based on increased operating expenses be simplified.

5. A copy of a recent column in the S.F. Examiner entitled "Rent Control Penalizes SF Newcomers."

Executive Director Grubb informed the Commissioners that the Board of Supervisors has approved two temporary hearing officer positions; one for nine months, and the other for a full twelve months. While this will be of help in reducing the 5-month hearing backlog that the agency is currently experiencing, it will add to the supervisory burden on Senior Hearing Officer Sandy Gartzman. While Ms. Gartzman is heavily involved in implementation and testing of the new database, hearing officers Connie Brandon and Debbie Lim are assisting with decision review; in September, Ms. Brandon will return to conducting hearings on a full-time basis.

Mr. Grubb discussed other options for backlog reduction, including contracting out of hearings, and possible incumbent problems in achieving and maintaining quality control. Other suggestions include: adding operating and maintenance expense and unlawful rent increase petitions to the Expedited Hearing process; allowing for hearings to be waived in certain types of cases; expansion of the Mediation Program to include landlord petitions; implementation of the Minute Order Program; continuing to phone landlords and tenants prior to their hearing dates in order to reduce the number of postponements; and asking the Board of Supervisors to amend the timelines established in the Ordinance in 1979.

1. Valuation of Decreased Housing Services

   In response to a Memorandum from the Deputy Director, the Commissioners discussed the amount the rent should be reduced when a housing service is taken away: the "market" or replacement value of the service, or the amount the tenant had been paying pursuant to their contract with the landlord. This question comes up most often with regard to parking and storage spaces. The Board discussed the policy considerations and legal issues raised, including the possibility of disparate results when no value for the service was ever established; the need to provide a disincentive for reduction of housing services; and replacement value sometimes constituting a disproportionate share of the rent. Commissioner Wasserman felt that a landlord’s motive in removing the service should also be looked at.

2. Costa-Hawkins (Civil Code Section 1954.53)

   In preparation for the implementation date of January 1, 1999, the Commissioners discussed possible amendments to the Ordinance and Rules and Regulations necessitated by the passage of the Costa-Hawkins Rental Housing Act in 1995. In a Memorandum dated June 15, 1998, the Deputy Director framed certain questions for the Board’s consideration. The Board appeared to have a consensus opinion as to the following questions: single family dwellings with in-law units, whether legal or illegal, constitute two-unit buildings and will not become exempt; likewise, if there is another structure on the same lot as a single family dwelling, then the home is not "alienable separate from the title to any other dwelling unit" because it cannot be sold separately, and it will not become exempt; the rental unit fee will continue to be collected on units which are partially exempted by Costa-Hawkins as they will still be subject to eviction limitations under the Ordinance; in a mixed-use building with residential and commercial units, the commercial units will not be counted, unless they are used for residential purposes and therefore constitute a "dwelling unit"; and, since a decrease in housing services is defined in the Ordinance as a rent increase, tenants in units affected by Costa-Hawkins will be precluded from filing petitions alleging decreased housing services and/or failure to repair.

   Areas that require additional discussion and/or assistance from the City Attorney include: are life-time leases issued pursuant to a condominium conversion under the Subdivision Code affected in any way?; what is the status of tenancies in rooms that are separately rented in a single family dwelling?; since the legislation does not affect the City’s "authority to regulate or monitor the basis for eviction", to what extent will allegations of wrongful eviction in affected units be investigated, especially with regard to retaliatory rent increases?; what constitutes "serious health, safety, fire or building code violations" sufficient to override exemption of the substandard unit, and does this apply to the "setting of initial rent" in a non-vacancy control jurisdiction such as San Francisco?; likewise, how does the provision in Section 1954.53(a)(1) which allows for setting of the initial rent only if the previous tenancy was not terminated apply in a jurisdiction with "Just Cause" eviction?

Proposition I landlord Nancy Tucker reiterated that real people are affected by the law, and have to figure it out for themselves. She informed the Board that the landlords who spearheaded the drive to pass Proposition E, the measure that would have restored the exemption for owner-occupied 4-unit or less buildings, are moving out of the City. George Ju, the landlord in the case at 1710 - 33rd Ave. (S001-50A) asked whether in-law units come under rent control.

June 30, 1998 - NO MEETING

July 7, 1998
6 appeal considerations (1 cont. from 6/23/98)

President Wasserman adjourned the meeting at 7:45 p.m.