{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 1, "text": "Draft Minutes\nSeptember 6, 2017\nMinutes of the Regular Meeting of the\nRent Review Advisory Committee\nWednesday, September 6, 2017\n1. CALL TO ORDER AND ROLL CALL\nThe meeting was called to order at 6:31 p.m.\nPresent were:\nChair Cambra; Vice-Chair Sullivan-Sari\u00f1ana; Members\nFriedman, Griffiths, Murray\nCommittee Staff:\nJennifer Kauffman, Janice Heredia, Grant Eshoo\nCity Attorney staff: John Le\n2. AGENDA CHANGES\na. Staff informed the Committee that three cases on the agenda will not be heard.\nAs those cases are called, staff will provide more detail.\n3. STAFF ANNOUNCEMENTS\na. Staff explained the schedule for the evening, noting where to find the meeting\nagenda and procedures for public comment.\n4. PUBLIC COMMENT, NON-AGENDA, NO.1\na. No public comment.\n5. CONSENT CALENDAR\na. Approval of the Minutes from the July 5th Regular Meeting.\nMotion and second (Murray and Sullivan-Sari\u00f1ana) Approved by unanimous\nconsent.\n6. UNFINSHED BUSINESS\na. No unfinished business.\n7. NEW BUSINESS\n7-A. CASE 911 - 2904 Central Avenue\nCase postponed.\n7-B. CASE 872.1- - 2058 Buena Vista Ave, Unit B\nTenant: Labib Ramdoun\nLandlord: Corwin and Teresa Hockema\nProposed Rent Increase: $650 (59.1%), effective December 1, 2017\nThird-party rent decision: Binding\nPage 1 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 2, "text": "Draft Minutes\nSeptember 6, 2017\nMr. Hockema explained he is in the Coast Guard and was recently stationed in Alameda.\nHe purchased the property this summer and will be living in one of the units. Mr. Hockema\nstated that the constitution entitles him to a fair rate of return on the property. He is\nasking for this rent increase in order to cover expenses and mortgage. Mr. Hockema\nacknowledged that he was aware of Alameda's rent regulations at the time of purchase.\nHe was out of state during most of the sale process and does not believe he was provided\nwith accurate information for the seller.\nMr. Ramdoun stated that he moved to the US from Syria 14 years ago. His wife is currently\nin school and Mr. Ramdoun's income as a limousine driver supports his wife, 2 year-old\ndaughter and mother, who lives nearby. Mr. Ramdoun stated that he understands the\nlandlord's situation and would offer more financially if he was able. At present, if he were\nto pay the full rent increase requested, he would not have enough income to support his\nfamily. He expects that his family's financial situation will change in the next 2 years\nonce his wife completes her master's degree in chemistry. He stated that he was friends\nwith his previous landlord and they had a verbal agreement that we would fix\nmaintenance issues in exchange for no rent increases.\nCommittee members asked questions regarding the landlord's financial decisions when\nreviewing the property for purchase. There was discussion around the short term and\nlong term goals of both parties.\nMr. Hockema stated that the lowest rent increase he is comfortable with would be $1,500.\nIf he does not receive this amount, he is concerned that his effort to invest in property\nwould be fruitless and he may have to sell in a few months. Committee members asked\nabout income from the other rental unit on the property. Mr. Hockema stated that he\npreferred not to discuss at this time as there are several pending issues with the tenant.\nMr. Ramdoun stated that a $100.00 increase to $1,200 is the maximum his family could\nafford.\nThe parties were unable to reach an agreement. Committee members concluded the\nconversation with tenant and landlord and opened deliberation between members to\nrender a recommendation.\nMember Friedman explained that he sees a clear financial impact on the\ntenant. He stated that the reasonable rent increase depends on the\nCommittee's understanding of a fair return on investment for the landlord.\nHe noted that this matter can be defined in a number of different ways.\nAcknowledging that the topic is not the Committee's area of expertise, his\nunderstanding is that a landlord does not have the right to immediately\nbreak even when a property is recently purchased. A return on investment\nis calculated over the long term. Member Friedman brought attention to\nthe City's regulations that a landlord has reasonable presumption to cover\nPage 2 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 3, "text": "Draft Minutes\nSeptember 6, 2017\nthe cost of operations. Cost of operations, defined by the Ordinance, does\nnot include debt service, such as mortgage expenses. Thus, it appears\nthere would need to be an increase in services or operation costs to\nwarrant a landlord's right to raise rent. He stated a $30.00 (3%) appears\nreasonable based on the financial information provided by the tenant and\nlandlord. Friedman noted that a large increase would impact the tenant\nsignificantly.\nMember Murray explained she relies on section 6-58.85 for guidance on\nrendering a fair decision on a rent increase. She acknowledged this is a\ndifficult situation because it appears that the new owner was misinformed\nabout the current tenants' rents and leases. She stated that it appears if\nthe rent is raised to $1,500 the tenant will have to relocate. If the landlord\ndoes not receive an increase to $1,500 he may not be able to continue\nowning the property. She noted that the time frame used to determine a\nreasonable rate of return is significant and she believes a longer time\nframe is expected. She noted that the landlord indicated near $20,000 in\ncapital improvements has already been invested in the property.\nChair Cambra addressed Friedman's point that it seems unrealistic for\na\nlandlord to expect a newly purchased property to generate a cash flow.\nCambra stated that a tenant does not have input on an owner's decision\nto invest in a property. He explained that capital improvements are\nexpected to be amortized over the useful life of the improvement.\nCambra also expressed concern that the landlord is not receiving income\nfrom the other unit and believes once that matter is resolved the landlord\nmay be more flexible financially. Taking into consideration the financial\nhardship of the tenant, he recommended an increase between $75-$100.\nMember Griffiths shared that, without a change in ownership, the\nCommittee would also be factoring into the history of past rent increases.\nThis tenancy history shows that the rent had not been raised since the\ntenancy began. While the current landlord is not able to answer for the\nprevious landlord's choices, Griffiths noted this factor of frequency should\nbe taken into consideration. He explained that a tenant should not be\nheld responsible for landlord's decisions that are not within their control.\nHe proposed a $100 increase, as offered by the tenant, to a total rent of\n$1,200.\nVice-Chair Sullivan Sari\u00f1ana explained that he listened to both parties to\nidentify their pain and flexibility. He noted that there appears to be some\nPage 3 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 4, "text": "Draft Minutes\nSeptember 6, 2017\ndiscrepancy with the landlord's knowledge of the City's regulations and\nchoice to purchase property that puts them in this difficult situation. He\nacknowledged that the landlord has identified financial pressures, though\nit appears that those pressures may be more adaptable than the tenant's.\nRecognizing that any Committee decision will cause one or both of the\nfamilies to struggle, Sullivan Sari\u00f1ana recommended a $275 increase to a\ntotal rent of $1,375.\nMotion and second for $100 rent increase to a total rent of $1,200 (Griffiths and\nFriedman). Motion passes with Cambra approval; Sullivan-Sari\u00f1ana and Murray\nopposed.\n7-C. CASE 919 - 1625 Santa Clara Ave., Unit 2\nTenant: Charles Sullivan, Gini Zuniga\nLandlord: David Harris\nProposed Rent Increase: $130 (10%) to a total rent of $1,430.00, effective date\ndelayed until RRAC review\nThird-party rent decision: Binding\nDavid Harris stated that the current rent is 38% below market rate. The rent was not\nraised annually and there are anticipated costs near $150,000 related foundation\nrepairs due to the raising water table. Mr. Harris explained that he is retired an\nincreasingly relies on the property for income. The current annual profit is $23,000\nannually which is a 1.7% return on investment. The landlord clarified that his\ncalculated annual expenses do not include a $150,000 loan, which he pays separate\nfrom the management company. He explained that family needs have taken his focus\naway from the rental property for the last five years. Based on the lack of previous\nrent increases, below market rent, and anticipated foundation repairs, he considers a\n10% increase modest.\nCharles Sullivan and Gini Zuniga stated they have lived in Alameda for six years. They\nare concerned that the property has been flooding during rains and seems to have\nmalfunctioning pipes. The tenants noted they had never met Mr. Harris and have only\ncorresponded with the management company. They indicated the rent increase poses\na financial difficulty based on their salaries working as a pre-K teacher and emergency\ntechnician, indicating that currently about 45% of their income is spend on rent. The\ntenants affirmed that they do not always receive annual raises. Mr. Sullivan indicated\nthat the $130 rent increase offer was a surprise and feels like a significant jump.\nPage 4 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 5, "text": "Draft Minutes\nSeptember 6, 2017\nCommittee members asked questions regarding the profit and loss statements,\nlandlord's alternative income sources, capital reserve practices, and maintenance\nconcerns.\nCommittee members facilitated dialogue between parties. Tenant and landlord\nreached an agreement for a $130 rent increase effective October 1, 2017 with $65\ndelayed until April 1, 2017.\n7-D - CASE 920 - 1625 Santa Clara Ave., Unit 3\nProposed rent increase: $115.00 (10.0%), to total rent of $1,265.00\nNo Committee review. Prior to the RRAC meeting, the tenant and landlord reached a\nmutually agreeable arrangement of a $115.00 (10.0%) rent increase.\n7-E - Case 921 1625 Santa Clara Ave #4\nProposed rent increase: $ 120.00 (9.8%), to total rent of $1,345.00\nNo Committee review. The tenant did not attend the meeting. The rent increase will\nbecome effective as stated in the notice.\n7-F. CASE 926 - 1305 Webster St., #C-209\nTenant: Max Langaard, Felicie Standley\nLandlord: Stefan Galvez and Natalia Aurrecaechea\nProposed Rent Increase: $1,100 (78.6%) to a total rent of $2,500, effective\nSeptember 1, 2017\nThird-party rent decision: advisory only\nNatalia Aurrecaechea stated they are small property owners who purchased the unit\nas a retirement investment. She noted there are risks in owning property and\nmarket uncertainty is placed on the landlord. She indicated that in the last 6 years\nbetween $6,000 and $7,000 has been invested in the unit. The rent increase is\nrelated to increased living costs, below market rent, and their family will be\nincreasingly relying on the rental income because Mr. Galvez is retiring. She stated\nthey have been working with their tenants to come to some agreement. At present,\nthe she has adjusted the offer to $2,100, which she believes is on the lower end of\ncomparable market rate units. The landlords acknowledged that Max Langaard and\nFelicie Standley are great tenants and they do not want to see them move out.\nThe tenants indicated they would be accept a $400 rent increase to $1,800.\nMax Langaard stated they have had a great relationship with their landlord.\nHowever, the last several months have been very stressful because the landlords\nare asking for a rent that would require them to vacate their home. He explained\nthey agreed to a rent increase last year of more than 5% to avoid the RRAC\nprocess. It was their understanding that the 2017 rent increase would be modest\nbecause they had agreed to more than 5% in 2016. They were surprised by the\nPage 5 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 6, "text": "Draft Minutes\nSeptember 6, 2017\n78.6% rent increase offer. He considers this rent increase as a way to avoid the\nnear $7,000 relocation expenses the landlord would be obligated to pay if they\nserved a termination notice. Mr. Langaard also noted that $2,100 seems high for a\nunit that has not been recently remodeled. Felicie Standley noted that she grew up\nin the Bay Area and is concerned that she will be able to stay.\nCommittee members asked questions and facilitated dialogue around utility costs,\ntimelines, termination regulations and market trends.\nThe parties were unable to reach an agreement. Committee members concluded the\nconversation with tenant and landlord and opened deliberation between members to\nrender an advisory recommendation.\nVice-Chair Sullivan-Sari\u00f1ana considered the tenant's offer to $1,800\nreasonable.\nMember Griffiths affirmed that he also agrees $1,800 total rent is\nreasonable considering it is a significant leap from the tenants' current\nrent.\nMember Friedman noted that the landlord's request for a $700 increase\nfrom $1,400 to $2,100 is a large step. He stated he would agree to the\ntenants' $1,800 offer. He noted that $1,800 is a significant step and the\ntwo factors leading him to recommend this amount is that the tenant\noffered it and the Committee's decision is advisory only for this case.\nMember Murray concurred that $1,800 is reasonable based on the\ntenants' statement that they would agree to the substantial increase. It\nappears the tenants recognize they have received a good deal on the\napartment and have had a good relationship with the landlord. She noted\nthat the landlord did not demonstrate operating expenses or information\non a return of investment that justified the $2,100 requested increase.\nShe explained that the City's current policy looks at balancing tenants and\nlandlords interests.\nMotion and second for $400 rent increase to a total rent of $1,800, effective\nOctober 1, 2017 (Murray and Griffiths). Motion passes unanimously.\n7-G. CASE 927.1 - 2305 San Jose Ave., Unit B\nProposed rent increase: $648.00 (60.0%), to a total rent of $1,743.00\nNo Committee review. Prior to the RRAC meeting, the tenant and landlord reached a\nmutually agreeable arrangement of a $320.00 (29.2%) rent increase.\nPage 6 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2017-09-06", "page": 7, "text": "Draft Minutes\nSeptember 6, 2017\n7-H. CASE 923.1 - 2305 San Jose Ave., Unit D\nProposed rent increase: $900.00 (81.8%), to total rent of $2,000.00\nNo Committee review. Prior to the RRAC meeting, the tenant indicated they intend\nto vacate the unit.\nTenant was not present.\nKyle Chuah, landlord, provided comments. He addressed the Committee to thank the\nmembers for their time and service.\n7-I. Discuss time keeping mechanisms.\nNo public comment.\nMotion and second to move the item to the next available agenda (Cambra and\nGriffiths). Motion passes unanimously.\n7-J. Discussion of policy input regarding the written letters and resources\nprovided to RRAC participants prior to a case review.\nNo public comment.\nMotion and second to move the item to the next available agenda (Cambra and\nGriffiths). Motion passes unanimously.\n8. PUBLIC COMMENT, NON-AGENDA, NO. 1.\na. No public comment.\n9. MATTERS INITIATED\na. Staff clarified the procedures for Committee members to request agenda items for\nupcoming RRAC meetings.\n10.ADJOURNMENT\nThe meeting adjourned at 9:45PM.\nRespectfully submitted,\nDraft until approved\nRRAC Secretary\nJennifer Kauffman\nPage 7 of 7", "path": "RentReviewAdvisoryCommittee/2017-09-06.pdf"}