To view graphic version of this page, refresh this page (F5)

Skip to page body

February 12, 2008

February 12, 2008

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

Tuesday, February 12, 2008 at 6:30 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

I. Call to Order

President Gruber called the meeting to order at 6:35 p.m.

II. Roll Call

Commissioners Present: Beard; Gruber; Henderson; Hurley; Marshall; Mosbrucker; Murphy.

Commissioners not Present: Justman.

Staff Present: Lee; Wolf.

Commissioner Mosser appeared on the record at 6:39 p.m. and left the meeting at 8:16 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of January 22, 2008.

(Henderson/Gruber: 5-0)

IV. Remarks from the Public

A. Dave Burnette, a tenant at the Golden Gateway Center, distributed a chart comparing the rate of annual increases with increases in the cost of utilities. Mr. Burnette took a rent of $1.00 and applied the annual allowable increases since 1980; he found that the rent went up 2.58 times while the utility costs went up 2.57 times. Mr. Burnette therefore concludes that there is no reason for a utility passthrough.

B. Greg Blaine, the landlord in the case at 3330 Pierce St. (AL080005), told the Board that Rules and Regulations ß6.10(g) says that loan proceeds must be reinvested in the building. However, Mr. Blaine explained that no additional funds were borrowed over Year One in Year Two; his loan amount stayed the same, and only the interest increased. Mr. Blaine cited ß6.10(a), which says that a landlord can get a rent increase if the cost of servicing the debt has increased. Mr. Blaine believes that this is the same as the cost of insurance or garbage going up, that the Administrative Law Judge erred, and that the decision denying him an increase based on increased operating expenses should be reversed.

C. Tenant Brian Browne of 550 Battery #1409 (AT070217) said that he has "methodically documented" the same conclusions as the first speaker, Mr. Burnette. Mr. Browne looked at the cost of power in 1980 and 2006 and said that no increase is justified, especially as he believes the cost of utilities are embedded in base rent. Mr. Browne told the Board that "many tenants are hurt by this" but don't want to file hardship appeals.

D. Tenant Ernestine Weiss of Golden Gateway said that she moved in with a lease that said that utilities are included and that utility passthroughs are in violation of that contract. Mr. Weiss believes that "Highway Robbery" is being committed, and that it is the Commissioners' responsibility to do their homework and correct these wrongs.

E. Tenant Paul Ledyard of Golden Gateway expressed his opinion that all the Board has to worry about is if the base rents are sufficient to pay the landlord's power costs. Mr. Ledyard believes it is irrelevant whether the landlord is good or bad, the tenants pay more or less than market rents, or if the tenants are rich or poor.

F. Robert Collins, the newly appointed Deputy Director of the agency, addressed the Board and told them he appreciated the opportunity to serve the public. Mr. Collins has worked for the Rent Board for over ten years and is committed to finding better and more efficient ways to serve the agency's clients.

V. Consideration of Appeals

A. 725 Ellis #609 AT070225

The landlord's petition for approval of utility passthroughs for 14 of 53 units 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. 660 O'Farrell, Apt. 21 AT080001

The landlord's petition for approval of utility passthroughs for 5 of 35 units was granted. One tenant appeals the decision, asserting that she lives in a one room, rather than a three room, unit.

MSC: To accept the appeal and remand the case to the Administrative Law Judge for a Technical Correction regarding the number of rooms in the unit, if appropriate; a hearing will be held only if necessary. (Henderson/Murphy: 5-0)

C. 96 Toledo Way, No. 305 AT080004

The landlord's petition for a determination pursuant to Rules ß1.21 was granted as the Administrative Law Judge found that neither occupant resided in the unit as their principal place of residence. The tenants appeal, claiming that: all of the documentary evidence establishes that the tenant occupies the subject unit as his principal place of residence; there are factual errors in the decision; the tenant does not take a Homeowner's Exemption on a condominium he jointly owns; the other tenant in the unit was not named in the petition nor served with a copy, which constitutes a denial of due process; it is not necessary for an individual to sleep somewhere to be considered to reside there; the ALJ abused his discretion and the decision fails the substantial evidence test; the rent increase is to take effect prior to the tenant's anniversary date; and a petition for rent increase has not been filed.

MSC: To deny the appeal except to remand the case to the Administrative Law Judge for a Technical Correction to delete the name of the other tenant in the unit from the caption. (Murphy/Gruber: 5-0)

D. 866 Capp St. AL070223

The landlord's petition for certification of the costs of a new roof to 2 of 3 units was granted. However, certification of the costs of replacement of the rear stairs on the property was denied because the Administrative Law Judge found that the landlord had not exercised timely good faith efforts to abate a Notice of Violation that had been issued more than 90 days prior to commencement of the work. On appeal, the landlord argues that: the Income Beneficiary of the Trust did not have the funds to pay the cost of the work, and needed the cooperation of the Remainderman Beneficiary; the Trustee did not have the power to borrow money or offer the building to secure a loan; the purpose of the 90-day rule is to ensure that landlords do not neglect their properties, but the Trustee was attempting to effectuate repairs prior to the issuance of the NOV; the circumstances of this case should form an exception to the 90-day rule; and the foundation work was not covered by the NOV and should be certified.

MSC: To deny the appeal. (Henderson/Marshall: 3-2; Beard,

Murphy dissenting)

E. 3330 Pierce St. AL080005

The landlord's petition for rent increases to 12 of 21 units based on increased operating expenses was denied because the increase was based on debt service due to refinancing and the funds were not reinvested in the building. On appeal, the landlord argues that the Administrative Law Judge erred in disallowing the increase in debt service from Year 1 to Year 2 due to a refinance in an unrelated prior year.

MSC: To deny the appeal. (Marshall/Henderson: 5-0)

F. 550 Battery #1409 AT070217

(cont. from 1/22/08)

The landlord's petition for approval of utility passthroughs for 69 of 794 units was granted. One tenant appeals the decision, asserting that: there is no valid policy reason for Rules ß6.16 to exist, as utilities were included in the tenant's initial base rent; the tenant's rent has increased at the same rate as the landlord's utility costs; the utility costs for the laundry room/health club are less than in 1980 when indexed for inflation; the tenant's lease should be controlling regarding the payment of utilities; revenues received by the landlord from vendors should be factored in; and Rules ß6.16 represents a regressive tax on aging for long-term tenants.

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

Henderson dissenting)

VI. Communications

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

A. Form 700 Statement of Economic Interests.

B. Several newspaper articles from the S.F. Chronicle and an update regarding AB 976.

VII. Director's Report

Senior Administrative Law Judge Tim Lee told the Board about the unpublished decision in the case of Prana Nine Properties, LLC v. Ye (First District Court of Appeal No. A116673), issued on November 20, 2007, where the court held that the landlord's action for declaratory relief concerning a Costa-Hawkins rent increase was properly dismissed due to the availability of adequate alternative relief at the Rent Board. Mr. Lee also reported that there has been a settlement in the case at 150 Font Blvd. #7-E (AT070213), which was remanded for further hearing at the Board meeting on January 22nd. Executive Director Wolf let the Commissioners know that the competing eminent domain initiative sponsored by the League of Cities/League of Conservation Voters has qualified for the June 2008 ballot. Unlike the broader Jarvis measure, it deals only with eminent domain and imposing restrictions on the taking of owner-occupied single-family homes, and would not repeal rent control. Ms. Wolf also informed the Board that their Form 700 Statements of Economic Interests are due to the Ethics Commission by April 1, 2008.

VIII. Old Business

Standards for Rescinding Ellis/OMI Notices of Constraints and the

Role of Rent Board Staff in Processing Requests for Rescission and

Other Petitions

The Board continued their discussion of the standards to be applied to landlord requests to rescind OMI/Ellis eviction notices. At the January 22nd meeting, the Board considered clarifying the standard, including adopting a bright-line rule based on whether the tenant in fact vacated after service of the eviction notice. A Memorandum prepared by Senior Administrative Law Judge Tim Lee was sent to the parties in two cases with pending rescission requests, advising them that the Rent Board would be considering clarifying the standard at tonight's meeting, and inviting them to submit comments for the Board's consideration. No remarks were submitted.

The Board's discussion centered on the issue of the timing of the clarification in light of the pending cases: Commissioner Murphy stated that he "didn't want to change the rules in mid-stream," while Commissioner Marshall opined that the Board would be clarifying, rather than changing, the standard. The Board then failed to pass the following motion:

MSF: To adopt the proposed clarification to the Board's standard for rescission of Ellis/OMI Notices of Constraints. (Henderson/Marshall: 2-3; Beard, Gruber, Murphy dissenting)

The Board agreed to continue discussion of this issue to the next meeting.

IV. Remarks from the Public (cont.)

G. Golden Gateway tenant Brian Browne told the Commissioners that they don't understand economics, and that there are "winners and losers in market exchanges." Mr. Browne feels that the landlord knew the rules going in, and is now trying to change them, whereas the tenants are abiding by the contract. Mr. Browne also alleged that the tenants are paying for utilities for garage spaces, which aren't lit.

H. Golden Gateway tenant Mary Pecci was paying $186 when she moved in to the complex; she is now paying $800, and new tenants are paying $1,800. Ms. Pecci believes that these sums should cover the landlord's expenses, and more.

I. Golden Gateway tenant Ernestine Weiss reminded the Board that they "make the rules" and are supposed to protect tenants. She also said that Golden Gateway is not a poor landlord and that they should be restrained because "thou shalt not break a contract." Ms. Weiss asked that the Board review Golden Gateway's profit statement.

J. Golden Gateway tenant Paul Ledyard said that a utility passthrough is for the costs of power, and is not supposed to cover rent increases. Mr. Ledyard feels that the landlord should lobby for additional rent increases if those in effect are insufficient and that it is not right to have one unfair rule because there is another unfair rule in effect.

K. Golden Gateway tenant Natalie Jones said that the Minutes from the last meeting are incorrect because she spoke about appliances that broke down and were not replaced in "first class condition," but did not mention anything about the complex's surroundings. Ms. Jones told the Board that the outside has been improved a great deal at the expense of the tenants, who are still paying the passthrough. Ms. Jones said that the Board misunderstands who lives in Golden Gateway, because many tenants moved in when the property was under HUD jurisdiction and those tenants are now on fixed incomes.

L. Golden Gateway tenant Regina Macias addressed the issue of the room count, and said that she just uses the garage to park her car.

M. Landlord Greg Blaine asked for clarification as to whether the landlord can get a rent increase if, after the original acquisition loan, down the road the loan amount stays the same and just the interest goes up. He also asked if the landlord has to wait to reapply if some of the loan proceeds went towards capital improvements.

IX. New Business

Departmental Budget

Ms. Wolf briefly went over the departmental budget for Fiscal Year '08-'09.

MSC: To approve the proposed departmental budget for Fiscal Year '08-'09. (Marshall/Murphy: 5-0)

X. Calendar Items

February 19th and 26th, 2008 - NO MEETINGS

March 4, 2008

4 appeal considerations (1 cont. from 11/13/07)

Old Business: Standards for Ellis/OMI Rescissions

XI. Adjournment

President Gruber adjourned the meeting at 8:25 p.m.

Last updated: 10/9/2009 11:26:18 AM