June 29, 2004MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, June 29, 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 6:09 p.m.
II. Roll Call
Commissioners Present: Becker; Gruber; Henderson;
Hurley; Justman; Mosbrucker; Mosser; Wasserman.
Commissioners not Present: Murphy.
Staff Present: Gartzman; Wolf.
Commissioner Marshall appeared on the record at 6:11
p.m.
III. Approval of the Minutes
IV. Remarks from the Public
A. Raymond Bokel, tenant at the National Hotel (AL040055), told the Board that his case was sent back to the Administrative Law Judge to see if the landlord filed for permits in a timely fashion, which she had not done. Mr. Bokel maintained that the City had the capacity to provide water for the sprinkler system, and said that the case had been going on for over a year.
B. Sarah Norr, representative of the National Hotel tenants, said that the case is simple and clear-cut, in that the deadlines were not met. In her opinion, the instant appeal provides no new arguments and is just a "cynical ploy" to get the tenants to "give up and move on." Ms. Norr said that this is the tenants' first experience with the Rent Board, and that they fear that the Board will not listen to low-income people, especially when opposed by a "fancy lawyer." Ms. Norr asked that the Board make people believe in the process by holding the landlord accountable.
C. Robert Pender, Vice-President of the Parkmerced Residents Organization (PRO), read a letter that he wrote to the Board of Supervisors outlining the history of PRO and thanking the Supervisors for their hard work. Mr. Pender also expressed his support for the Parkmerced residents who had appeals before the Board at this evening's meeting.
D. Landlord Attorney Andrew Zachs, representing the landlord of the National Hotel, said that the case poses serious questions regarding the application of a new law. Mr. Zachs said that the property owner was not asking the Administrative Law Judge (ALJ) to re-write the Ordinance but, rather, to exercise his discretion. In Mr. Zachs' opinion, the ALJ failed to exercise his duty by not deciding the reasonableness of the Ordinance's timeframes. Mr. Zachs also pointed out that the Board of Supervisors established no Rent Ordinance remedy when they enacted the Sprinkler Ordinance. Mr. Zachs informed the Board that the landlord in the Calvo case (to be discussed later on the Board's Agenda) did not file briefs, and is asking that the Decision be vacated.
E. Tenant Frederick D. McAllister of the National Hotel thought it was a good thing when the case started, but he has not been able to rent a room or get a job since. Mr. McAllister is upset by the deterioration of the building he lives in, and he volunteers to help clean up.
F. Tenant Eve Prong of the National Hotel said that living in an SRO is hard enough. The tenants at the National are not asking for luxury items -- fire safety is a "big deal." Ms. Prong believes that, when laws are passed, she is expected to follow them or she gets in trouble.
G. Tenant Ernestine Weiss of the Golden Gateway Center told the Board that PG&E gave all landlords a rebate, but that her landlord has refused to disclose how much they were given or when the tenants are going to get it. Ms. Weiss said that the Golden Gateway operators are "slumlords" and "dictators" and asked what the Commissioners are going to do about it as a Board.
H. Paul Hogarth, Commissioner on the Berkeley Rent Board, spoke on behalf of the tenants at the National Hotel. Mr. Hogarth told the Board that six residential hotels on 6th Street having burned out in a decade led to the passage of the Sprinkler Ordinance. He informed the Commissioners that the preservation of affordable housing is part of their mandate. Mr. Hogarth feels that the landlord in this case has been "openly hostile" to their responsibilities and that justice in this case has been long delayed.
I. Rick Galbraith said that he is a "life-long SRO tenant." Mr. Galbraith defines insanity as doing the same thing over and over and expecting a different result. He believes it is time to move on, because "even death row inmates run out of appeals."
V. Consideration of Appeals
The tenant's appeal was filed one year and nine months late because the tenant did not realize she had a right to appeal the decision.
The landlord's petition for rent increases based on increased operating expenses 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. (Marshall/Henderson: 5-0)
B. 1840 Larkin St. #4 AT040057
The landlords' petition for certification of capital improvement costs and rent increases based on increased operating expenses was granted. The tenants in one unit appeal the decision on the grounds of financial hardship.
MSC: To accept the appeal and remand the case for a hearing on the tenants' claim of financial hardship. (Becker/Marshall: 5-0)
C. 109 Serrano Dr. AL040063
The landlord's petition for certification of the costs of a new roof was granted. However, the Administrative Law Judge ruled that the passthrough had been imposed prematurely and could not be effective until expiration of the current one-year lease. The landlord appeals only as to that issue, arguing that the landlord did not renew the lease for a one-year term but, rather, as a month-to-month tenancy. The landlord asserts that the renewal letter makes no reference to a one-year lease term; the term of the lease that is identified had already expired; and there is no evidence in the record that the tenant relied upon any representation that the renewal was for one year nor that the tenant wishes to be bound by such terms.
MSC: To recuse Commissioner Becker from consideration of this appeal. (Justman/Gruber: 5-0)
MSF: To deny the appeal. (Marshall/Henderson: 2-3: Gruber, Hurley, Justman dissenting)
MSC: To accept the appeal and remand the case to the Administrative Law Judge to vacate the Decision and find that this tenancy renewed on a month-to-month basis. (Justman/Gruber: 3-2;
D. 2583 - 29th Ave. AL040054
The tenant's petition alleging unlawful increases in rent was granted and the landlords were found liable to the tenant in the amount of $7,187.63. On appeal, the landlords maintain that the charges for cable service should be kept separate from the base rent.
E. 2809 Steiner St., Apt. #1 AL040061
The landlord's appeal was filed one week late because the landlord had changed her mailing address.
The tenant's petition alleging an unlawful increase in rent was granted. The tenant had been paying rent in the amount of $1,445.00 rather than $1,500.00 because the landlord had given her twelve $55 discount coupons. The Administrative Law Judge found that the market rent for the unit was actually $1,455.00, the amount actually paid by the tenant, and the "discounted" rent was simply a fiction to build in subsequent market increases. On appeal, the landlord argues that the lease signed by the tenant reflects the agreed-upon base rent of $1,500.00, and that the "promotional credit coupons" do not change the amount of the rent.
MSC: To deny the appeal. (Justman/Marshall: 3-2; Gruber,
F. 1458 - 12th Ave. AT040058
The tenants' petition alleging decreased housing services due to the loss of a garage space was granted and the landlords were found liable to the tenants in the amount of $150.00 per month. On appeal, the tenants argue that the courts have ruled that a garage space is an "inalienable right" and the new landlord does not have the right to take away the garage space.
G. 1139 Market St. AL040055
Six tenant petitions alleging decreased housing services due to the lack of an interior sprinkler system were granted and the landlord was found liable to the tenants in the amount of $20.00 per month. The landlord's appeal of the decisions was granted and the case was remanded: "to determine whether the landlord acted reasonably considering the totality of the circumstances, including the fact that she failed to timely file the permit application, and to determine how much the City impeded performance, if at all. If it is established that the landlord has otherwise complied with the Ordinance, but that the City cannot provide water at the appropriate poundage, there shall be no on-going rent reduction." In the Decision on Remand, the Administrative Law Judge found that the landlord had failed to act reasonably under the circumstances and affirmed the original rent reductions, but failed to grant on-going rent reductions due to the City's failure to provide new water service to the property. The landlord appeals the remand decision on the grounds that: the Residential Hotel Sprinkler Ordinance (RHSO) created no rights or remedies for tenants under the Rent Ordinance; the Administrative Law Judge's failure to make independent findings regarding the reasonableness of the landlord's conduct constituted an abuse of discretion; the Rent Board's procedures do not provide adequate due process protections in that the landlord could not compel testimony from relevant City officials and agencies; hotel owners were unable to determine standards for compliance with the RHSO; a modern sprinkler system is not a housing service under the Ordinance; and the RHSO is not lawfully part of the City's housing code.
MSC: To recuse Commissioner Mosser from consideration of this appeal. (Marshall/Gruber: 5-0)
MSC: To deny the appeal. (Marshall/Becker: 3-2; Gruber, Hurley dissenting)
H. 501 Lake St. #103 AT040059
The tenant's petition alleging unlawful rent increases was denied because the Administrative Law Judge found that the tenant had moved into a continuing tenancy and the landlord retained the right to banked increases that had not been imposed. Claims of decreased housing services were also denied because it was found that the tenant failed to provide access, that the conditions were not substantial, and/or that the landlord had promptly remedied the problem. On appeal, the tenant claims that: the status of the eviction case between the parties was mis-stated in the Decision; the tenant signed a new lease with the landlord which established a new tenancy; a prior operating and maintenance expense increase was wrongful in that the landlord had installed coin-operated washing machines, but was also charging for increased water costs; it was the landlord's responsibility to repair the carpet; and the mold and mildew problem was on-going and never remedied by the landlord.
MSC: To deny the appeal. (Justman/Gruber: 3-2; Becker, Marshall dissenting)
VI. Communications
The Commissioners received the following communications:
A. Memoranda from staff regarding proposed amendments
to Rules and Regulations Sections 2.15 and 11.23.
B. Commissioner Justman's proposed changes to the
proposed amendments to Rules and Regulations Section 4.11.
C. Legislation amending Chapter 49 of the Administrative
Code regarding interest on security deposits, signed by the Mayor on May 20th.
D. A June 21st article from the Daily Journal
regarding an adverse ruling in a lawsuit filed by small property owners in
San Francisco challenging the prior requirement that they pay 5% interest
on security deposits. Unlike landlords in Santa Monica who were required to
place the funds in a certain type of account, there was no such limitation
in San Francisco. The Judge therefore ruled that no unconstitutional taking
had occurred.
E. A letter from Attorney Stephen Collier of the Tenderloin
Housing Clinic regarding the case of Calvo y Perez v. Superior Court.
VII. Director's Report
Acting Executive Director Delene Wolf informed the
Board as follows:
A. The Rent Board's budget was approved by the Budget
Committee of the Board of Supervisors on June 16th; the Fee Legislation
was approved by the Finance Committee with a 50-50 split of the fee on June
29th; and a Charter amendment changing the way that Rent Board
Commissioners are appointed was approved by the Rules Committee on June 21st.
The Fee Legislation and Charter Amendment will go before the full Board of
Supervisors on July 13th.
B. The Court of Appeal granted Santa Monica's petition
for rehearing and has ordered additional briefing in the Action Apt.
case concerning whether eviction notices are protected by the litigation privilege.
The prior decision is not currently in effect.
C. Golden Gate Scavenger has revised their fee schedule
to exclude 3 to 5 unit buildings from the "apartment rate" and is
now charging the residential rate for those units. One landlord has reported
that the scavenger costs for her 5-unit building will go from $64.00 to $204.00
per month. Sewage costs are also expected to rise by 11% this year. It is
anticipated that landlords will be asking the Board for some form of relief
from these cost increases.
VIII. Old Business
A. Proposed Amendments to Rules and Regulations Section
4.11 Regarding PG&E Passthroughs
Commissioner Justman reported that he has been working
with Senior Administrative Law Judges Sandy Gartzman and Tim Lee to draft
a compromise proposal. In so doing, Commissioner Justman tried to deal with
the effects of inflation by establishing a new base year every five years
and provide for some measure of fairness for landlords with existing passthroughs
where the base year can be proved. Commissioner Justman distributed his new
proposal and explained its major provisions to the Commissioners. These include:
1. The landlord must file a petition for approval
of a utility passthrough, and the petition will be decided without a hearing
unless the Administrative Law Judge determines that a hearing is necessary.
2. The initial base year for all tenancies in effect
on December 31, 2003 shall be 2002, except a landlord with a current passthrough
may petition the Board for approval of the earlier base year.
3. The initial base year for tenancies commencing
after December 31, 2003 shall be the calendar year immediately preceding
the year of the inception of the tenancy.
4. A landlord may petition the Board for approval
of an alternate base year under specified circumstances where utility bills
are not available.
5. Rather than index base year costs for inflation,
a new base year will be established every five years when the initial base
year is 2002 or later. When an earlier base year was elected and approved
by the Board, the earlier base year utility costs will be adjusted every
five years to reflect the increase or savings in utility costs during the
five-year period.
6. Various adjustments will be made for laundry
facilities depending on whether the laundry facilities are separately metered
or a user fee is charged.
The proposal will be discussed further at the meeting
on July 20th.
B. Rules and Regulations Section 11.23 Regarding Provision
of Attorneys and Interpreters
Pursuant to the Commissioners' request, staff drafted
an amendment to Rules and Regulations Section 11.23 to clarify that the Board
shall provide interpreters but not attorneys to low-income individuals. The
proposed amendment reads as follows below:
Section 11.23 Legal Representation or Assistance
of an Interpreter in Certain Cases
Both parties are entitled to legal representation
at any stage of the proceeding. If it shall appear to the Administrative
Law Judge that the issue or facts in a matter before him or her are so involved
or intricate that in the interests of justice, of conserving time or of
facilitating the preparation of an adequate record, a party ought to be
represented by an attorney or an interpreter, the Administrative Law Judge
may urge such party to procure such services. If the party agrees to procure
an attorney or an interpreter, the Administrative Law Judge shall allow
a party a reasonable period of time to do so. When this occurs, the opposing
party shall be advised, and the matter may be continued for this purpose.
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 term "interpreter"
shall include persons trained in the international language for the deaf.
MSC: To put the proposed amendment to Rules and Regulations
Section 11.23 out for Public Hearing. (Justman/Hurley: 5-0)
IV. Remarks from the Public (cont.)
J. Ernestine Weiss told the Board that they are getting
away from the whole point, which is that the annual CPI increase covers PG&E
costs and landlords shouldn't get additional passthroughs. Ms. Weiss believes
that "tenants are being ignored" and that this is why a new Rent
Board is being proposed.
K. Laura Traveler of PRO told the Commissioners that
the Parkmerced tenants are running up legal fees, and that Section 11.23 needs
to stay in the Rules and Regulations. She also believes that the proposal
regarding Rules Section 4.11 offered by Commissioner Justman is "totally
new." Regarding the appeal at 109 Serrano Dr. (AL040063), Ms. Traveler
contends that "ambiguity should be ruled against the person who created
it" and the tenant should have prevailed in that case.
L. Attorney Joe Bravo, representing the landlord at
Parkmerced, commented on Commissioner Justman's draft proposal regarding amendments
to Section 4.11 as follows: the Commissioners should consider averaging utility
costs over a 12-month period (Mr. Bravo said that he would provide a Memo
on the merits of this approach); and there is no reason to distinguish between
owners before and after 2002, since the jump in utility costs occurred in
2000 and 2001.
IX. New Business
On March 23, 2004, Section 2.15 of the Rules and Regulations
was amended to increase the per diem compensation from $75 to $100 if the
meeting lasts for three or more hours, from $50 to $75 if the meeting lasts
from one to three hours, and from $25 to $50 if the meeting lasts less than
one hour. Subsequently, it came to staff's attention that Ordinance Section
37.4(h) limits per diem compensation to $75 where the meeting lasts for six
or more hours. Therefore, staff drafted a proposed amendment to Section 2.15
to reflect the $75 maximum for meetings of six or more hours in conformity
with the Ordinance, with which the Commissioners concurred. Although no meeting
since March 23rd lasted three or more hours, due to an accounting
error, the Commissioners were paid $100 for the meeting on April 20th.
They agreed that $25 shall be docked from their next paycheck to correct this
mistake.
In addition, Ordinance Section 37.4(h) provides that:
"The Commissioners shall adopt rules for payment of an equitable portion
of this per diem if a meeting lasts less than six hours." Since the $75
maximum has not been increased since the Ordinance was enacted in 1979, the
Commissioners agreed to the amount of $70 for any meeting lasting less than
six hours. Staff shall draft the additional language, to be discussed further
at the next meeting.
B. Calvo y Perez v. Superior Court (Superior
Court Case No. 610406)
The Commissioners received a letter from Attorney
Steve Collier of the Tenderloin Housing Clinic regarding an appellate decision
granting his client's Writ of Mandate in an owner move-in eviction. The issue
in the case was a conflict between the published version of the Rent Ordinance,
which requires only a 25% ownership interest to evict for owner occupancy,
and the September 1998 "Bierman Amendment" which increased the ownership
interest to 50%. The Rent Board and the City Attorney have taken the position
that because Proposition G was enacted after the Bierman Amendment, and did
not change the 25% ownership requirement, the 25% ownership requirement superceded
the Bierman Amendment. However, the court has now stated in an unpublished
decision that because Proposition G did not address the percentage ownership
requirement of Section 37.9(a)(8), the 50% ownership requirement of the Bierman
Amendment had not been repealed.
The Board asked Acting Executive Director Wolf to
request a City Attorney Opinion on this issue.
X. Calendar Items
July 6th & 13th, 2004 - NO MEETINGS
July 20, 2004
19 appeal considerations (14 from Parkmerced)
6:30 Public Hearing: Proposed Amendments to Rules Section 11.23
` Old Business:
XI. Adjournment