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Supervisor Matt Gonzalez’ package of 18 proposed amendments to the Rent Ordinance, which was the subject of a recent hearing before the supervisors’ Rules Committee, has been consolidated into 12 parts. The parts will be introduced as standalone ordinances at the call of the chair of the Rules Committee.
When the 18 amendments were heard by the Rules Committee, the committee abandoned its custom of hearing brief arguments from proponents and opponents. Instead, it acceded to the request of Supervisor Gonzalez that his amendments be debated, one by one, by Jim Fabris of the Association of REALTORS® for the opponents and Ted Gullickson of the Tenants Union for the proponents.
The arguments presented by Fabris followed those contained in a letter the Association submitted earlier to the supervisors. The contents of the letter, along with descriptions of the amendments, are printed below.
“Dear Supervisors:
“Supervisor Matt Gonzalez’ proposed amendments to San Francisco’s rent control ordinance contain no findings that might provide a foundation for their adoption. They, in fact, serve no purpose at all other than to increase the technical complexity of the Rent Ordinance to make compliance more difficult for owners. This, in turn, will increase the likelihood that owners will be held liable for technical violations. We urge you to reject the amendments in their entirety.
“The Gonzalez amendments are described below. In each case, comments and opposing arguments are presented.
“Change the definition of rental units to include units regardless of zoning or legal status.
“This provision is meant to apply to illegal secondary units and will conform the definition of rental units in the rent ordinance to the definition currently being used by the rent board. But the change is absolutely unnecessary because the rent ordinance already applies to illegal secondary units by operation of the rent board’s definition.
“Provide that parking or storage or similar facilities on the same lot may not be severed by the landlord without just cause or tenant consent, except where necessitated by serious landlord hardship or circumstances beyond the landlord’s control.
“This provision will require an owner to show just cause before any appurtenance to a rental unit (such as the use of certain common areas or other facilities) can be diminished or terminated. The provision will not change the current requirement that any such diminishment or termination constitutes a reduction in “housing services” and must be accompanied by a proportionate reduction in rent for the affected tenant(s).
“Why should an owner be required to show just cause before some appurtenance to a rental unit, such as the use of a common area, can be diminished or terminated? San Francisco’s rent ordinance was enacted to protect tenants in place from anything but minor rent increases. It was never meant to prevent owners from altering the non-habitable areas of their properties in ways they see fit. The provision is over-reaching and should not be made a part of the ordinance.
“Extend coverage of the ordinance to non-tourist tenancies in residential hotels by eliminating the 32-day residency requirement for those tenancies.
“This provision will extend the coverage of the rent ordinance to include residential hotel rooms with tenancies of less than 32 days. What possible justification can be offered for extending the protections of the ordinance to tenants who occupy a residential hotel room for as little as one day? Among other things, owners of such hotels will be forced, under this provision, to file an unlawful detainer action to remove a guest who fails to pay hotel charges after only one day’s occupancy. And, with all the delays that usually accompany court actions of this kind, it could take up two months to remove a guest during which time the guest probably would be able to avoid having to pay any additional hotel charges.
“Limit imposition of banked rent increases to eight percent per year and require more specific notice.
“This provision will prevent owners from recovering any more than eight percent of banked rent increases in any one year. It also will establish new disclosure requirements for notifying tenants of the imposition of banked rent increases. But the provision will hurt the very tenants it seeks to help by causing owners to pass on to tenants all allowable rent increases. This would be done because if they did not, they could be precluded later from passing on banked increases in full when the owner’s economic circumstances might require it.
“Require more specific notice for rent increases authorized under California Civil Code Sections 1954.50 et seq., and require a rent arbitration hearing for certain increases not authorized by those sections.
“This provision will require owners to serve a Rent Board-created rent increase notice on tenants and provide proof of service to the Rent Board. The notice will be required to indicate that the rent increase is allowed under the Costa Hawkins Act, certify that there are no disqualifying notices already in existence for the unit, and require Housing Code work to be completed. The notice also will be required to notify tenants of their right to demand a Rent Board hearing to review the amount of the increase. The provision also states that any increase allowed but not authorized by the Costa Hawkins Act (whatever that may mean) must be the subject of a hearing at the Rent Board before it can be imposed.
“This technically complex provision is virtually impossible to understand and serves no purpose other than to make compliance with the rent ordinance more difficult for owners and to increase the likelihood that they will be held liable for technical violations.
“Prohibit rent increases or evictions solely for additional occupants, where the total number of occupants is within the Housing Code occupancy limits.
“This provision will prohibit owners from raising the rents when an additional tenant or tenants move into a unit. According to the San Francisco city attorney’s office, it also will require owners to allow occupancies consistent with Section 503 of San Francisco’s Housing Code, which requires that every dwelling unit must have at least one room of not less than 120 square feet, that every room for sleeping purposes must have not less than 70 square feet when occupied by two persons, and that those rooms have an additional 50 square feet for every additional person. This change will require owners to allow, according to some estimates, nine persons to occupy a single 500 square foot studio apartment and up to 30 persons to occupy a large three bedroom apartment.
“Allowing occupancies in line with the requirements of this provision will greatly degrade the quality of life enjoyed by the occupants of apartment buildings in the city, to say nothing of the strain under which the internal systems of those buildings will be placed. None of the city’s residential buildings were designed for high density occupancies of the kind contemplated by this provision and what responsibility would owners have to rebuild internal systems to provide code compliant housing services to the occupants of those buildings?
“Expand the statute of limitations from three years to five years from discovery, for refunds of rent overpayments due to null and void rent increases.
“This provision will extend to five years from the date of discovery the time allowed for tenants to challenge improper rent increases. Allowing a tenant five years after discovery of an improper rent increase to file a challenge is an absurdity. The provision, in fact, will operate to eliminate the statute of limitations entirely for such challenges by allowing a tenant to claim that he or she challenged an improper rent increase within five years of its discovery no matter how many years had elapsed since the rent increase was given.
“Clarify that all endeavors to recover possession for just cause under Section 37.9(a) must be in good faith without ulterior motive and with honest intent.
“This provision will require owners to prove that they are acting in good faith and without ulterior motives and with honest intent whenever they recover possession of a rental unit, even for nonpayment of rent. The current law, which requires a showing of just cause, protects the interests of tenants sufficiently. To require an owner also to prove that he or she acted in good faith without ulterior motives is excessive and entirely unnecessary.
“Require relocation expenses of $2,000 for each additional occupant (including any minor child) who has lived in a unit for 12 months as of the time of vacation of the unit, where the unit is to be demolished or otherwise permanently removed from housing use, or where the tenant must relocate due to capital improvements or substantial rehabilitation work or an owner move in eviction, with one half paid upon notice and one half paid within 72 hours after vacation of the unit, and with these amounts to be increased annually according to the rate of increase in the “Rent of Primary Residence” expenditure category of the Consumer Price Index (CPI).
“This provision will increase by 50 percent the relocation payments required to be paid to tenants when they are moved for rehabilitation or improvements, and, it would seem, to remove an illegal unit from the market, as well. There has been no showing that $2,000 per occupant (including minor children) is the amount necessary to cover the moving costs of tenants who must be relocated. The $2,000 per occupant amount could become outrageously burdensome if occupancy standards are relaxed as proposed elsewhere in the amendments (see above).
“Provide that a tenant’s civil action against a landlord for abridgement of rights under the rent ordinance may also be brought against the landlord’s successor in interest.
“This provision will expose successors in interest to liability for the unlawful acts of previous owners and is, without question, unconstitutional as an unreasonable restraint on alienation. It is tantamount in its operation to holding the owner of a used car responsible for the parking tickets of the previous owner.
“Eliminate the ability of a landlord to give a rent increase to tenants whose primary place of residence is not the unit subject to a petition for a Rules Section 1.21 determination.
“This provision will reverse the rule recently adopted by the Rent Board which allows owners to petition the board to have controls on rent lifted from any unit which is not the occupant’s primary residence. There is no justification for compelling an owner to subsidize, through the operation of the rent ordinance, the rent of a tenant who is using an apartment as a convenience residence when the tenant’s principal residence is elsewhere.
“Clarify that the amendments protect prospective and current tenants.
“This provision will establish a foundation for extending the rent ordinance to tenants other than those in occupancy and is not only contrary to the purposes of the rent ordinance, but violates the Costa Hawkins Act.
“There is no reason any of Supervisor Gonzalez’ proposed amendments to San Francisco’s rent ordinance should be adopted and we hope that you will reject them in their entirety.
“Sincerely yours,
“James C. Fabris
“CEO, San Francisco Association of REALTORS®”
April 2003
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