April 20, 2004
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, April 20, 2004 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 6:10 p.m. At that time, she welcomed new Landlord Alternate Commissioner Jim Hurley. She also thanked ex-Landlord Commissioner Merrie Lightner for her many years of dedicated service to the Board.
II. Roll Call
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Commissioners Present:
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Becker; Gruber; Henderson; Hurley; Marshall; Mosbrucker; Mosser; Wasserman.
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Staff Present:
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Gartzman; Wolf.
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Commissioner Murphy appeared on the record at 6:24 p.m. and Commissioner Justman arrived at the meeting at 6:26 p.m.
III. Approval of the Minutes
IV. Remarks from the Public
A. Robert Pender, Vice-President of the Parkmerced Residents' Organization (PRO), told the Board that PRO celebrated its 30th birthday on March 4th. Mr. Pender invited the Commissioners and staff to his 80th birthday party. Mr. Pender stated his support for indexing, but only of PG&E passthroughs.
V. Consideration of Appeals
The landlord's petition for certification of the cost of a new roof to 2 of 3 units was granted. One tenant appeals the decision on the grounds of financial hardship.
The tenant's hardship appeal of a decision certifying a capital improvement passthrough in the amount of $48.64 was accepted and remanded for hearing. The Administrative Law Judge found that, although the tenant demonstrated that paying the proposed passthrough constituted a financial hardship, the tenant lives alone in a two-bedroom unit and could alleviate the hardship by getting a roommate. Therefore, his appeal was denied, although the tenant was granted a nine-month deferral of the passthrough in order to obtain a roommate. On further appeal, the tenant argues that: the decision is prejudicial against long-term tenants who live where they do not because of the number of rooms, but because of the amount of rent; the decision fails to take the amount of living space into account; and it is unreasonable to expect an elderly individual to obtain a roommate.
The tenant's petition alleging decreased housing services was denied. On appeal, the tenant maintains that: statements provided by the landlord and her witnesses at the hearing were false; the prior landlord and one of the landlord's witnesses never lived in the subject unit; the tenant always had use of the kitchen facilities; there are unsafe conditions in the unit; testimony of the landlord's witness was incorrectly translated at the hearing; and the landlord is harassing the tenant.
The tenant's petition alleging an initial base rent in excess of the amount the Master Tenants were paying the landlord was granted, and the Master Tenants were found liable to the subtenant in the amount of $2,118.18. On appeal, the Master Tenants claim that: the subtenant moved in with an agreement to reside in the unit for only one month; the subtenant agreed to pay more than her proportional share of the rent when she moved in; the subtenant's boyfriend moved in to the unit without an agreement; the subtenant stopped paying rent prior to moving out of the unit; and the Master Tenants have been providing a comfortable living environment for shared living for eighteen years.
The tenant's petition alleging decreased housing services was granted and the landlord was found liable to the tenant in the amount of $2,250.00 due to the removal of a sauna, steam room and showers and off-street parking spaces. On appeal, the landlord asserts that: the tenant has no standing to pursue the petition since he had moved out of the unit by the time he filed the petition; the decision violates the California Constitution in that it exercises judicial powers which are reserved for the courts; the decision is not reasonably necessary to effectuate the regulatory purpose of the Ordinance, which is to safeguard tenants from excessive rent increases; the amount of rent collected by the landlord at the time the tenant lived in the unit was lawful and cannot now be made unlawful; the amount of the rent reductions is excessive and not supported by the evidence; since the tenant waited so long to file his claim, the loss of services could not have been substantial; the loss of short-term parking spaces does not constitute a reduction in services; and the one year limit on the rent reduction should apply and run from the date that the tenant complained of the loss of the service.
The landlord's petition for a rent increase based on increased operating expenses was denied because the Administrative Law Judge found that the increase was based only on repairs that were extraordinary, rather than routine, which created exaggerated results. On appeal, the landlord argues that: the calculation periods were not selected to create exaggerated results; the repairs were routine, and not extraordinary; and the burden of proof was met with regard to electrical repair work performed in December, 2002.
VI. Public Hearing
At the request of Supervisor Peskin, and subsequent to a Public Hearing before the Land Use Committee, Senior Administrative Law Judge Sandy Gartzman brought several issues pertaining to utility passthroughs to the Board's attention at their meeting on January 6, 2004. At the Board's request, Ms. Gartzman and Senior Administrative Law Judge Tim Lee drafted proposed regulations with explanatory memoranda to address the issues raised, which were amended pursuant to discussion at meetings on January 20th, February 3rd, February 17th, and March 9th. At their meeting on March 23rd, the Commissioners voted to put the proposed regulations out for Public Hearing; two versions were put out, one with indexing for inflation, and one without.
The Public Hearing convened at 7:05 p.m. and concluded at 7:30 p.m. Nine individuals testified as follows below:
1. Clay Tominaga, representing the landlords at the Golden Gateway complex, said that utility costs were not an issue until the energy crisis. While night utilities costs now get billed at a lower rate, they didn't have time-of-use meters in 1980. Mr. Tominaga feels that different ways of reading a meter disfavor indexing. He also believes that there are "unanswered questions" in the new draft. There could be a problem with the length of time it takes to receive a decision from the Rent Board, while PG&E passthroughs need to be done on a calendar year basis. Mr. Tominaga also feels that "everyone should share in PG&E's bankruptcy costs."
2. Robert Pender of PRO introduced Laura Traveler and Carolyn Cahn, past and present Presidents of PRO. He told the Board that Parkmerced makes a "zillion" mistakes in calculating PG&E passthroughs, and that a petition should be required. Mr. Pender supports indexing the passthroughs, since it is unfair to compare 1980 to 2004 dollars.
3. Beatrice Wahlbeck has been a tenant in her unit since 1978 - there was no laundry room in the building at that time. Ms. Wahlbeck provided a spread sheet with calculations to show the effect of the landlord having added two sets of laundry room appliances. Ms. Wahlbeck questions the fairness of deducting laundry room income when the passthrough might not have been justified to begin with. Ms. Wahlbeck has never used the laundry facility in her building. She believes that the proposed amendments should address all possible situations.
4. Carolyn Cahn, President of PRO, told the Board that every passthrough imposed by Parkmerced that has been challenged by a tenant has been found to be incorrectly calculated. However, each tenant must file their own petition to challenge a passthrough, and many tenants at Parkmerced are elderly and afraid. Ms. Cahn believes that the regulations should provide that an erroneous passthrough must be corrected for all tenants and that there should be some form of punishment for owners who "put in false numbers." Ms. Cahn pointed out that there are problems with mixed use, commercial and residential, properties.
5. Brook Turner submitted a letter from Michelle Horneff, President of the Professional Property Management Association, and spoke on behalf of the Coalition for Better Housing. Mr. Turner said that his association agrees with the requirement that landlords file petitions for PG&E passthroughs, as it will make the process "proper and fair." He said, however, that indexing isn't fair, as these passthroughs "don't put money in landlord's pockets as the landlord is just a collection agency for PG&E."
6. Laura Traveler, ex-President of PRO, said that different pasthrough amounts are being collected, even on the same block. She said that the Board "has to have indexing"; that there are many different corporate entities at Parkmerced; and, since the person who does the calculations is out-of-state, there has to be an "overseer."
7. Lisa Shannon of Parkmerced said that the petition process will be "cumbersome," but that the requirement makes "quality control sense." Ms. Shannon spoke against indexing, which she said would reduce a $14.41 passthrough to $4.78. This means that landlords would have to shoulder most of the burden of utility costs, over which they have no control. Ms. Shannon believes the passthrough provisions make sense the way they are, and that the Board should "keep it simple."
8. Mitchell Omerberg of the Affordable Housing Alliance applauded the petition process. He said that there is still a problem with the calculation since the base year can be so long ago. This means you are picking up the increase in PG&E costs, but also the decline in the value of the dollar. Mr. Omerberg said that "you don't need indexing if there isn't such a big gap in time."
9. David Pilpel of the Sunshine Task Force said that a "reasonable" staff report would provide historical explanation, and that some examples should be provided. Mr. Pilpel suggested that the Board pull back the regulations and re-draft, along with providing a better explanation.
This issue was put over for continued discussion among the landlord and tenant communities, and will be calendared for the meeting on May 4th.
VII. Communications
In addition to correspondence concerning cases on the calendar and the proposed amendments to Rules Section 4.11, the Commissioners received the following communications:
A. New Rent Board Staff and Commissioner rosters.
B. The office workload statistics for the month of February,
2004.
C. A Memorandum from Deputy City Attorney Andrew Schwartz
regarding the enforcement of Proposition G.
D. The Annual Report on Eviction Notices to the Board
of Supervisors.
E. Vacation, Leave or Business Travel forms.
F. The "Good Government Legal Guide, an Overview
of the Laws Governing the Conduct of Public Officials", prepared by the
Office of the City Attorney.
G. A Pending Litigation Status Report prepared by
Senior Administrative Law Judge Tim Lee.
VIII. Director's Report
Acting Executive Director Wolf informed the Board that
legislation sponsored by Supervisor Peskin setting a new index for establishing
the rate for interest on security deposits was passed by the Land Use Committee
on April 19th. The new rate will be 1.2%, the same as last year's
rate, and will be retroactive to March 1st.
IX. Old Business
The Board briefly discussed a Memorandum prepared
by Deputy City Attorney Andrew Schwartz in response to a request from Commissioner
Murphy regarding the applicability of the Cwyner decision to the enforcement
of Proposition G. Mr. Schwartz advised the Board that the provisions of Proposition
G continue to apply to any landowner who is not an individually named petitioner
in the Cwyner case.
IV. Remarks from the Public (cont.)
B. David Pilpel of the Sunshine Ordinance Task Force
said that he was "lost" in the discussion of proposed amendments
to Rules and Regulations Section 4.11, and said that the Board should "be
more specific or you lose your public." Mr. Pilpel offered some constructive
suggestions regarding possible changes to the Minutes and Agenda, especially
the "Accessible Meeting Policy."
X. New Business
Acting Executive Director Wolf brought to the Board's
attention the language of Section 11.23 of the Rules and Regulations, which
states: "If the Administrative Law Judge determines that a party cannot
afford the services of an interpreter, the Board shall assist in obtaining an
interpreter or attorney at no cost to the party." The Parkmerced Residents'
Organization (PRO) has made a request for legal assistance pursuant to this
Section. This issue shall be calendared for discussion at the next meeting.
Commissioner Murphy inquired regarding the accuracy of statistics cited in a
flyer for the "Tenant Congress" on April 24th.
XI. Calendar Items
XII. Adjournment