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November 12, 2002

November 12, 2002

MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,

Tuesday, November 12, 2002 at 6:30 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

I. Call to Order

President Wasserman called the meeting to order at 6:39 p.m.

II. Roll Call

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

Commissioners Aung and Murphy appeared on the record at 6:42 p.m.; Commissioner Mosser went off the record at 8:30 p.m.

President Wasserman announced that Commissioner Hobson has tendered his resignation, effective upon the pleasure of the Mayor. President Wasserman thanked Commissioner Hobson for his service to the Board.

III. Approval of the Minutes

MSC: To approve the Minutes of October 29, 2002.

(Becker/Gruber: 5-0)

IV. Remarks from the Public

A. Robert Pender, Vice-President of the Parkmerced Residents" Organization (PRO), told the Board that PRO has been defending the tenants of Parkmerced against rent increases for the past 2-1/2 years. Mr. Pender believes that Parkmerced residents have also been subjected to biased action by Rent Board employees, such as being informed on the Agenda that they could call the Rent Board office to find out the disposition of their appeals.

B. Tenant Helen Hope of Parkmerced expressed concern that her individual appeal had not been responded to in the Administrative Law Judge"s appeal response memorandum.

C. Carolyn Cahn, PRO Board member, told the Commissioners that the initial petition filed by Parkmerced was withdrawn, but the amount increased in the subsequent petition. Ms. Cahn believes that the intent of Rules Section 6.10 was to benefit the owners of small buildings, and not the owners of large rental complexes.

D. Tenant Dorothy Carr of Parkmerced said that Leona Helmsley is a "Cinderella Queen" compared to the current owners of Parkmerced. Ms. Carr heard a rumor that Parkmerced paid Willie Brown money to have the decision turn out the way it did.

E. Tenant Garfield Powell of Parkmerced said that the petition was fatally flawed and that if the tenants and Administrative Law Judge hadn"t pointed out discrepancies, the landlord would never have come up with sufficient documentation to prevail. Mr. Powell maintained that Parkmerced is a property, and not a building, and said that the landlord has unclean hands.

F. Tenant Louise Shields of Parkmerced informed the Board about an on-going termite infestation issue in her unit which has recurred. Ms. Shields said that Parkmerced management has been unresponsive, and that many tenants are moving out.

G. Lawrence Scanciarelli, the attorney representing PRO, told the Board that the language in Section 6.10 refers to a "building"; there is no authority for not breaking out the costs by building; and there is also no authority for the formula in the decision used for allocating costs between the residential and commercial units.

H. Laura Traveler, President of PRO, said that it was a "draconian" decision by the Administrative Law Judge to allow 7% rent increases, and that the decision supported the landlord 100%. Ms. Traveler asked the Commissioners to remand the nine issues raised in the tenants" joint appeal, and asked the Board to "stand by us."

I. Tenant Genevieve Callejo of Parkmerced told the Board that debt service costs were excluded for certain blocks that Parkmerced sold to San Francisco State, and that it wasn"t fair to have to pay depending on which block one lived on. Ms. Callejo objected to the Administrative Law Judge having granted Parkmerced"s request to amend the petition, without the tenants having an opportunity to object.

J. Tenant Robley Passalacqua said that he is a "Johnny-Come-Lately" to this process, not having received notice of the hearings on this petition. Mr. Passalacqua filed his appeal untimely because the Rent Board does not "honor" the postmark date, and said that he has been denied due process.

K. The tenant appellant in the case at 909 Page #6 (AT020243) said that he filed a hardship appeal because he is in the United States on a visa, which only allows him to work for one employer. That employer currently does not have enough work for him, and he cannot afford to pay the retroactive capital improvement amounts. He thanked the Board for their consideration.

V. Consideration of Appeals

A. 520 So. Van Ness #319 AT020241

The tenant"s petition alleging decreased housing services was dismissed due to the tenant"s having arrived approximately an hour and a half late to the hearing. On appeal, the tenant alleges that he was late because he had worked from 10:00 p.m. the previous night until 10:00 a.m. the morning of the hearing.

MSC: To accept the appeal and remand the case for a new hearing. Should the tenant fail to appear in a timely fashion to the next hearing, absent extraordinary circumstances, no further hearings will be granted. (Becker/Marshall: 5-0)

B. 909 Page St. #6 AT020243

The landlord"s petition for 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. (Becker/Marshall: 5-0)

C. 3141 Irving St. AT020242

The tenant"s appeal was filed 15 days late because the tenant"s files regarding the case were temporarily mis-placed when the tenant moved out of the subject unit.

MSC: To find good cause for the late filing of the appeal. (Becker/Marshall: 5-0)

The tenant"s petition alleging decreased housing services was dismissed due to his failure to appear at the hearing. On appeal, the tenant maintains that he was unaware of the date and time of the hearing because the Notice of Hearing was sent to the subject unit before it was forwarded to his current address.

MSC: To remand the case to the Administrative Law Judge to change the Dismissal to "without prejudice" so that the tenant can pursue any rights and remedies he may have in Small Claims Court. (Lightner/Gruber: 3-2; Becker, Marshall dissenting)

D. Parkmerced AT020260 thru AT020451

The landlord"s petition for rent increases for 2,702 of 3,456 units based on increased operating expenses was granted, resulting in 7% base rent increases for the majority of the tenants. 191 tenants appealed the decision. Of these, 143 tenants represented by the same attorney filed a joint appeal; and 51 tenants filed individual appeals, 27 on the grounds of financial hardship. Subsequent to the filing of the appeals, 9 tenant appellants settled their hardship claims with Parkmerced and withdrew their appeals; 6 of these individuals had also filed joint appeals, which were withdrawn.

The arguments put forward by the tenants in the joint appeal are as follows: the Administrative Law Judge erred by allowing the petitions to be filed for 42 separate blocks, each block consisting of 1 or more buildings, instead of requiring a separate petition for each building; the 14 executive suites are not occupied by "Tenants in Occupancy," and they therefore should not have been included; the petitions should have been administratively dismissed, as there is no authority for treating a complex as a "building"; rents for comparable units should have been taken into consideration; the comparison periods chosen created "exaggerated results"; there is no authority for allowing an allocation between residential and commercial units based on income; no fair comparison of the debt service between Year 1 and Year 2 could be made, because certain parcels were left unencumbered so that they could be sold; the Year 2 debt service should have been adjusted by the proceeds of the sales price and market value of the unencumbered parcels; and the Board should waive its regulations in order to determine whether the landlord has received a fair return on its investment absent the petitioned-for rent increases.

MSC: To accept the appeal and remand the case to the Administrative Law Judge to re-open the record in order for the landlord and tenants to provide square footage information in order to allocate the expenses between the residential and commercial units on a square footage basis. The appeal is denied as to all other issues. (Wasserman/Marshall: 5-0)

The individual appeals are as follows below:

The tenants in unit 55 Chumasero Dr. #6J filed their individual appeal 1 day late.

MSC: To find good cause for the late filing of the appeal. (Marshall/Becker: 5-0)

The tenants in unit 55 Chumasero Dr. #6J provided no substantive basis for their appeal.

MSC: To deny the appeal. (Lightner/Gruber: 5-0)

The individual appeal of the tenant at 329 Font was filed 1 day late.

MSC: To find good cause for the late filing of the appeal. (Becker/Wasserman: 5-0)

The tenant at 329 Font appeals the decision on due process grounds, alleging non-receipt of the notices of hearing. The tenant failed to provide the requested Declaration of Non-Receipt of Notice of Hearing.

MSC: To deny the individual appeal of the tenant at 329 Font Blvd.

(Lightner/Gruber: 5-0)

The hardship appeal of the tenant at 750 Gonzalez #3G was filed 25 days late because the tenant does not read or write English very well, and was unaware of the deadline for filing the appeal.

MSC: To find good cause for the late filing of the appeal. (Becker/Marshall: 5-0)

The tenant at unit 750 Gonzalez #3G 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. (Becker/Marshall: 5-0)

The tenant at 750 Gonzalez #9C filed her appeal 23 days late because she did not understand the paperwork that she received.

MSC: To find good cause for the late filing of the appeal. (Becker/Marshall: 5-0)

The tenant at 750 Gonzalez #9C appeals the decision 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. (Marshall/Becker: 5-0)

The tenant at 310 Arballo #9M appeals the decision on the grounds that the landlord shouldn"t be able to take a tax deduction for maintenance costs and at the same time increase the tenants" rents.

MSC: To deny the appeal. (Gruber/Lightner: 5-0)

The tenant at 350 Arballo #12E reiterates the arguments put forward in the joint appeal.

MSC: The tenant is a party to the Joint Appeal and her individual appeal is therefore denied. (Lightner/Gruber: 5-0)

The tenant at 534 Arballo argues that: Rules Section 6.10 applies to an individual building, and not a property; the landlord"s witnesses were unreliable; the landlord"s petition was flawed, and the documentation provided failed to meet the landlord"s burden of proof; and the tenants have suffered a reduction in services, which should have been taken into account.

MSC: To deny the individual appeal of the tenant at 534 Arballo Drive. (Lightner/Gruber: 5-0)

The tenant in unit 570 Arballo maintains that: the decision does not implement a fair and equitable solution, because the landlord could refinance the property and obtain a financial recovery that would obviate the need for rent increases.

MSC: To deny the individual appeal of the tenants at 570 Arballo Drive. (Lightner/Gruber: 4-1; Becker dissenting)

The tenant at 22 Cambon Dr. 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. (Marshall/Becker: 5-0)

The tenant at 125 Cambon Drive, Apt. 10K is an elderly veteran who had a stroke several years ago, which has left him with severe limitations. His appeal was continued in order for staff to continue working with Parkmerced management towards resolution of his appeal.

The tenant at 106 Cardenas Ave. appeals on the grounds that a landlord should not be able to obtain a rent increase due to maintenance costs when those costs are tax deductible.

MSC: To deny the individual appeal of the tenant at 106 Cardenas Ave. (Lightner/Gruber: 5-0)

The tenant at 228 Cardenas appeals on the grounds that the landlord did not file separate petitions, detailing expenses on a per-building basis.

MSC: To deny the individual appeal of the tenant at 228 Cardenas Ave. (Lightner/Gruber: 3-2; Becker, Marshall dissenting)

The tenant at 21 Castelo maintains on appeal that the size of these rent increases threatens the availability of reasonably priced rentals for middle class residents of San Francisco; and expresses her concern that rents will continue to increase, as continuous "improvements" are made.

MSC: To deny the individual appeal of the tenant at 21 Castelo Ave. (Lightner/Gruber: 4-1; Marshall dissenting)

The tenant at 55 Chumasero #5H reiterates the arguments contained in the joint appeal, adding that Rules Section 6.10 was intended to address a single building, and not a large complex consisting of multiple buildings; and maintaining that the landlord has not proved that prior owner Leona Helmsley no longer has an ownership interest in the property.

MSC: The tenant is a party to the Joint Appeal and her individual appeal is therefore denied. (Lightner/Gruber: 5-0)

The tenant at 55 Chumasero Dr. #8M avers that rent increases should be limited to the annual allowable amount, and no additional passthrough should be granted.

MSC: To deny the appeal. (Lightner/Gruber: 5-0)

The tenant at 55 Chumasero #M-E maintains that the 7% increase is too much, since she is a teacher making low wages; and she should not be responsible for paying for the landlord"s operating and maintenance costs.

MSC: To deny the individual appeal of the tenant at 55 Chumasero Dr. #M-E. (Lightner/Gruber: 4-1; Becker dissenting)

The tenant at 100 Font, Apt. 1-K appeals the decision on the grounds of financial hardship. Additionally, the tenant alleges that improvements are being made to the property to attract potential new tenants, but not to improve conditions for existing tenants.

MSC: To deny the individual appeal of the tenant at 100 Font Blvd. #1K on substantive grounds and the claim of financial hardship. (Lightner/Gruber: 4-1; Becker dissenting)

The tenants at 150 Font #10-D and 2-L assert that a landlord should not be able to take tax deductions for operating and maintenance costs, and increase tenants" rents on these same grounds.

MSC: To deny the individual appeals of the tenants at 150 Font Blvd. #10-D and 2-L. (Lightner/Gruber: 5-0)

The tenants at 128 Garces Dr. maintain that the Administrative Law Judge erred by treating the property as a single building, rather than a complex of buildings; and allege that the landlord did not produce any evidence of an increase in the aggregate costs of operating and maintaining the tenants" building.

MSC: To deny the individual appeal of the tenants at 128 Garces Dr. (Lightner/Gruber: 3-2; Becker, Marshall dissenting)

The tenant at 240 Garces Dr. 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)

The tenant at 605 Gonzalez Dr. 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)

The tenant at 750 Gonzalez #11D asserts that amounts he has paid towards a utility passthrough should be included in the calculation of the allowable operating and maintenance expense increase.

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

The tenant at 810 Gonzalez #4D asserts that the increase is "illegal and incorrect."

MSC: To deny the appeal. (Gruber/Lightner: 4-1; Becker dissenting)

The tenant at 1 Josepha 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)

The tenant at 5 Josepha reiterates the arguments advanced in the joint appeal, and also appeals on the grounds of financial hardship.

MSC: To accept the tenant"s individual appeal and remand the case for a hearing only as to the financial hardship claim.

The tenants at 355 Serrano, Apt. 12C assert that the decision is "unfair and one-sided"; that the landlord has adopted no mitigation measures to reduce the debt service costs; and that the requirements of Rules Section 6.10(g) have not been taken into account.

MSC: To deny the appeal. (Gruber/Lightner: 5-0)

The tenant at 355 Serrano, 1F 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. (Gruber/Lightner: 5-0)

The tenant at 355 Serrano #7-G reiterates the arguments raised in the joint appeal.

MSC: The tenant is a party to the Joint Appeal and his individual appeal is therefore denied. (Gruber/Marshall: 5-0)

The tenant at 405 Serrano #11B asserts that the decision is "illegal and incorrect."

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

The tenant at 405 Serrano #5D 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. (Wasserman/Gruber: 4-0)

The tenant at 405 Serrano #10K makes the same arguments as contained in the joint appeal.

MSC: To accept the appeal and remand the case to the Administrative Law Judge to re-open the record in order for the landlord and tenants to provide square footage information in order to allocate the expenses between the residential and commercial units on a square footage basis. The appeal is denied as to all other issues. (Wasserman/Lightner: 4-0)

The tenant at 405 Serrano, Apt. 12-L appeals the decision on the grounds of financial hardship. As the tenant"s application was incomplete, and the tenant did not furnish the requested information, it was the consensus of the Board to continue this appeal in order for staff to contact the tenant again.

The tenant at 102 Tapia Drive 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. (Gruber/Marshall: 3-1; Lightner dissenting)

The tenants at 105 Tapia Drive appeal the decision on the grounds of financial hardship.

MSC: To deny the appeal. (Lightner/Gruber: 4-0)

The tenants at 525 Vidal Drive appeal the decision on the grounds of financial hardship.

MSC: To deny the appeal. (Lightner/Gruber: 4-0)

The tenant at 114 Juan Bautista Circle supplements her participation in the Joint Appeal with an appeal on the grounds of financial hardship.

MSC: To accept the tenant"s individual appeal and remand the case for a hearing on the claim of financial hardship.

(Wasserman/Gruber: 4-0)

VI. Calendar Items

November 19, 2002

6:30 18 appeal considerations (4 rescheduled from 10/29/02)

Old Business: Proposed Amendments to Rules Section 1.18

November 26, 2002- NO MEETING

VII. Adjournment

President Wasserman adjourned the meeting at 10:10 p.m.

Last updated: 10/9/2009 11:26:15 AM