{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 1, "text": "Approved Minutes\nJanuary 24, 2017\nMinutes of the Special Meeting of the\nRent Review Advisory Committee\nMonday, January 24, 2017\n1. CALL TO ORDER AND ROLL CALL\nThe meeting was called to order at 6:24 p.m.\nPresent were: Chair Sullivan-Sari\u00f1ana; and Members Griffiths, Friedman, and Schrader.\nAbsent: Vice-Chair Landess\nVacancy: None\nRRAC Staff: Claudia Young\n2. AGENDA CHANGES\na. Motion and second to add public comment as item 7-B (Schrader and Griffiths). Approved\nby unanimous consent.\n3. STAFF ANNOUNCEMENTS\na.\nStaff clarified that the Committee will not review cases at this meeting. Rather, this special\nmeeting is held for Committee members to discuss Ordinance no. 3148 as it relates to the\nRent Review Advisory Committee.\n4. PUBLIC COMMENT, NON-AGENDA ITEMS\na. No public comment.\n5. CONSENT CALENDAR\na. None.\n6. UNFINSHED BUSINESS\na. No unfinished business.\n7. NEW BUSINESS\na. Committee members to discuss Rent Stabilization Ordinance no. 3148 as it relates to the\nRent Review Advisory Committee\nVice-Chair Landess had submitted questions prior to the meeting. The City Attorney responded\nto these inquiries and staff shared the input.\nQ: Why is Base Rent Year defined as 2015?\nA: Base Rent Year becomes relevant and important when calculating Net Operating Income\nbecause a Landlord's Net Operating Income in any particular year is compared to the\nLandlord's Net Operating Income in the Base Rent Year-2015--which was the year before\nrent control went into effect. That is, there is a presumption that if a Landlord's NOI say, in\nPage 1 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 2, "text": "Approved Minutes\nJanuary 24, 2017\n2017, is the same as the NOI in 2015, then the Landlord is receiving a fair return on\ninvestment and no rent increase is necessary in order to receive a fair return on investment.\nQ: Please explain the discussion of Debt Service?\nA: Debt Service is referred to in 'Costs of Operation' and is excluded from a Landlord's\nCosts of Operation. Costs of Operation is part of the Net Operating Income formula, i.e.,\ngross revenues less the Cost of Operation.\nQ: Please provide more clarify that Notices and Materials to be Provided to Current and\nProspective Tenants, (section 6-58.20) is a one-time requirement for existing tenants.\nA: There is nothing in Section 6-58.20 to indicate or suggest that providing these materials to\na\ncurrent tenant must occur other than with the Landlord's first receipt of rent following\nMarch 31, 2016. Since presumably Landlords have now received rent from the tenants who\nwere in the units at the end of March 2016, I am proposing to revise subsection B of Section\n6-58-20 so that subsection A is applicable only for prospective tenants.\"\nCommittee members discussed the Ordinance following Member Friedman's suggested outline:\n1. Should mediation remain part of the Rent Review Advisory Committee meeting?\nMember Friedman stated that he does not consider the RRAC process to be mediation.\nParticularly, the Committee members are not professional mediators and the meetings are not\nprivate. He raised concern that the process may place pressure on a tenant to sign an\nunfavorable agreement. Friedman suggested that an advocate be present at meetings to inform\ntenants there is no obligation to sign agreements. He suggested that an option for mediation\nbe offered prior to the Committee meeting.\nChair Sullivan-Sari\u00f1ana acknowledged that the Committee's dual role as mediator and\ndecision-maker is challenging. He noted that the Program Administrator is already offering\nprivate mediation and this service is helpful. He also expressed the difficulty that often parties\nattend the Committee meetings prepared to argue before a third-party decision maker and this\ndynamic can make compromise difficult. Sullivan-Sari\u00f1ana also addressed that there is an\nuneven balance of power in a tenant and landlord relationship. He suggested that requiring\nmediation prior to the Committee meeting may provide the tenant more support in the\nsituation.\nMember Griffiths stated he believes the Committee's mediation role is useful. He expressed\nconcern that a mandatory mediation may place an unwarranted burden on one of the parties.\nHe recommended that private mediation prior to the Committee meeting remain optional.\nMember Schrader stated that the Ordinance does not explicitly include the term \"mediation.'\nSchrader considers mediation during the RRAC meeting useful because the parties are often\nmotivated to reach an agreement. He suggested that optional, professional mediation be\noffered prior to the Committee meeting. Additionally, the Committee should reduce the time\nPage 2 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 3, "text": "Approved Minutes\nJanuary 24, 2017\nspent on mediation and focus more time on questions and determining the Committee's\ndecision. He reiterated that Committee members are not professional mediators.\nStaff explained the Program Administrator's role in processing rent increase submission\nthrough the scheduling of the rent increase review before the RRAC.\nThe Committee recommended that mediation and the RRAC process be defined in the\nOrdinance. Additionally, the Committee recommended that optional mediation prior to the\nRRAC meeting be encouraged.\n2. Should rent increase criterion from Section 6-58.125 be included in the Committee's criteria\nwhen deciding a rent increase?\nMember Friedman listed the criteria in Section 6-58.85 (B) under consideration by the\nCommittee in determining rent increases. He stated that \"just and reasonable rate of return\"\nshould be more clearly defined and that market rate should not be included in the\nCommittee's consideration. He suggested adding \"maintenance of Net Operating Income\nfor the Base Year as adjusted by inflation over time provides a Landlord with a just and\nreasonable rate of return on property\" to the Committee's criteria.\nMember Schrader noted that the flexibility of the Committee's criteria is important;\nespecially in cases when a landlord had not raised rent for many years. Member Griffiths\nagreed that more flexibility is better. Chair Sullivan-Sari\u00f1ana stated that the Committee\nand the Hearing Officer play different roles. Hence, different criteria should be considered.\nNo recommendation from the Committee.\n3. Should 5% remain the threshold for a Landlord Request for Rent Review? Should increases of\n5% or less receive a binding decision from the Committee?\nChair Sullivan-Sari\u00f1ana stated that 5% is an arbitrary threshold and has a significant impact\non the negotiation. He expressed concern that this threshold limits discussion because many\nlandlords expect at least a 5% increase.\nStaff clarified that tenants can contest rent increases of 5% or less by contacting the\nProgram Administrator.\nMember Griffiths noted that many cities relate rent control to inflation. Member Schrader\nstated that the Bay Area's housing cost inflation is 4.8%. Member Schrader also noted that\nthe 5% threshold affects what data is collected more than it affects whether or not a case\ncomes before the Committee.\nMember Griffiths noted 5% is a good threshold because it captures large rent increases,\nrather than every increase. However, he expressed concern that the Committee has not seen\na tenant-initiated case for several months. He raised concern that the tenant may not believe\nPage 3 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 4, "text": "Approved Minutes\nJanuary 24, 2017\nthey have power to challenge increases of 5% or less because the Committee's decision is\nnon-binding. He recommended that the Committee have binding authority for all non-\nexempt unit cases.\nMember Schrader agreed and clarified that state law prevents municipalities from making\nbinding decisions for certain units. He agreed it would be positive for the Committee to\nhave binding authority on all non-exempt units, rather than being seen as a procedural\nprocess for increases of 5% or less.\nMember Friedman agreed with the previous statements. He added that currently he believes\na landlord can work around a Committee recommendation of less than 5%. He explained\nthat if a landlord disagrees with a Committee recommendation of less than 5%, the landlord\ncould rescind the current notice and serve a new notice equal to 5%, which would not\nreceive a binding decision by the Committee.\nStaff stated that removing the rent increase percentage threshold for binding decisions may\nincrease the Committee's caseload and additional staffing may be necessary.\nMember Schrader stated he would prefer to review those cases, even if it meant an\nincreased caseload. Chair Sullivan-Sari\u00f1ana agreed.\nThe Committee recommended that the Committee have binding authority for any non-\nexempt unit initiated by a tenant.\n4. In some situations, two rent increases are offered simultaneously. This requires review if at\nleast one offer is above 5%. Should lease options be limited?\nMember Schrader stated that the RRAC should not limit lease options. Chair Sullivan-\nSari\u00f1ana noted that offering a large month-to-month rent increase option is a way to\npressure tenants into accepting a 5% rent increase.\nStaff clarified that multiple lease options are generally only seen at one property and month\nto month options are directed towards corporate leases. Staff explained that tenants\nreceiving more than one rent increase offer are contacted by the Program Administrator.\nHowever, staff has found that most of these tenants do not contact staff back and usually\naccept one of the rent increase offers or chose to vacate the unit.\nNo recommendation from the Committee.\nMotion and second to take a five minute break (Sullivan-Sari\u00f1ana and Schrader). Unanimously\napproved.\n5. Should the Ordinance allow short-term rentals without the offer of a one year lease option?\nPage 4 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 5, "text": "Approved Minutes\nJanuary 24, 2017\nMember Schrader stated that this is not related to the Committee's role. Staff clarified that\nany Committee member can email their recommendations as a private citizen to the City\nAttorney's Office.\nNo recommendation from the Committee.\n6. The Rent Review process and the Hearing Officer can be used to delay a rent increase as long\nas possible. Should we recommend changes?\nStaff clarified that no case has been appealed and reviewed by the Hearing Officer.\nNo recommendation from the Committee.\n7. Should language be added to clarify when a case is withdrawn from the RRAC process?\nMember Schrader recommended that the Ordinance clarify there is no RRAC review of\nrent increase submissions when an agreement between tenant and landlord is reached prior\nto the RRAC meeting.\nMember Griffiths and Chair Sullivan-Sari\u00f1ana agreed it should be clear that the Committee\ndoes not make decisions on rent increases when the tenant and landlord have already\nreached an agreement.\nThe Committee recommended to add language to section 6.58-75 (D) that states a rent\nincrease request is considered closed and withdrawn from the RRAC process when the\nProgram Administrator receives an agreement between a tenant and landlord concerning\nthe amount of the rent increase.\n8. Should language be added to require all data on rent increase submissions to be shared\npublicly?\nMember Friedman stated that the phrase \"terms of agreement\" in section 6.58-75 (D)\nindicates that the exact terms of an agreement must be reported to the Program\nAdministrator. Member Schrader added that data collection is an important part of the\nOrdinance.\nStaff clarified that currently any private agreement between tenant and landlord must\nstate the terms of agreement by indicating a percentage range: 0-5%; 5.1-10%; or above\n10%. Staff reports of all rent increase submissions are available on\nwww.alamedarentprogram.org\nNo recommendation from the Committee.\nStaff summarized the Committee's recommendations:\nProfessional mediation be offered and encouraged prior to the RRAC meeting\nPage 5 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 6, "text": "Approved Minutes\nJanuary 24, 2017\nRRAC decisions to be binding for tenant-initiated non-exempt unit cases\nAdd language to Section 6.58-75 (D) that states a rent increase request is considered\nclosed and withdrawn from the RRAC process when the Program Administrator\nreceives an agreement between a tenant and landlord concerning the amount of the rent\nincrease.\n7.b. PUBLIC COMMENT\nErick Strimling: Speaker stated that he has never seen the mediation process work at a\nCommittee meeting. He noted that many tenants and landlords are exhausted by the\nprocess. He explained that mediation is a well-defined term and should be facilitated\nby a professional prior to the Committee meeting. He stated many tenants feel\npressure to sign rent increase agreements. He noted that tenants are often hesitant to\nsubmit requests for rent increase reviews before RRAC because they do not want to\nrisk the relationship with their landlord. He suggested that staff always explain\noptions to each tenant and landlord in separate meetings prior to any mediation. He\nstated that tenants should not be penalized for selecting a month-to-month option.\nAdditionally, he emphasized that data is needed and the terms of agreements for all\ncases submitted to the Program Administrator should be public information.\nToni Grimm: Speaker stated that she appreciates the time and thoughtfulness of the\nCommittee. She expressed disappointment that the Hearing Officer's criteria was\nnot added to the Committee's criteria. She stated that the same criteria should be\napplied to each case.\nEd Paul: Speaker thanked the Committee for their work. He stated that the Committee\nprocess appears to be working. He noted that the process seems to be addressing\nthe situation when an excessive rent increase is reported.\nMotion and second for the following recommendations (Schrader and Griffiths). Approved by\nunanimous consent.\nMediation be offered and encouraged prior to the RRAC meeting\nRRAC decisions to be binding for tenant-initiated cases with non-exempt units\nAdd language to Section 5.58-75 (D) that if the Program Administrator receives an\nagreement between a tenant and landlord regarding a rent increase, then the case is\nconsidered closed and withdrawn from the RRAC process.\nStaff clarified that these recommendations will be sent to the City Attorney and will be\npresented to City Council.\nMotion and second for Chair Sullivan-Sari\u00f1ana to present the Committee's recommendations\nat the City Council meeting. (Griffiths and Schrader). Approved by unanimous consent.\n8. MATTERS INITIATED\nPage 6 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-01-24", "page": 7, "text": "Approved Minutes\nJanuary 24, 2017\na. None\n9. ADJOURNMENT\nThe meeting was unanimously adjourned at 9:47 p.m.\nRespectfully submitted,\nRRAC Secretary\nClaudia Young\nApproved by the Rent Review Advisory Committee on June 5, 2017.\nPage 7 of 7", "path": "RentReviewAdvisoryCommittee/2017-01-24.pdf"}