{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 1, "text": "Approved Minutes\nJune 6, 2018\nMinutes of the Regular Meeting of the\nRent Review Advisory Committee\nWednesday June 6, 2018\n1. CALL TO ORDER AND ROLL CALL\nThe meeting was called to order at 6:30 P.M.\nPresent were:\nChair Cambra; Vice-Chair Sullivan-Sari\u00f1ana; Members\nMurray, Friedman, and Griffiths\nAbsent:\nNone\nProgram staff:\nGrant Eshoo, Gregory Kats\nCity Attorney staff: John Le\n2. AGENDA CHANGES\na. Staff announced that one of the cases on the agenda would not be heard, as it\nresolved prior to the hearing.\n3. PUBLIC COMMENT, NON-AGENDA ITEMS, NO.1\na. No public comment.\n4. STAFF ANNOUNCEMENTS\na. No staff announcements.\n5. CONSENT CALENDAR\n5-A. Approval of the Minutes of the May 7, 2018 Regular Meeting.\nMotion and second to approve of the minutes (Sullivan-Sari\u00f1ana and Murray). Motion\npassed 5-0.\n6. UNFINSHED BUSINESS\na. No unfinished business.\n7. NEW BUSINESS\n7-A. CASE 1023 - 1621 Broadway, Apt. A\nNo Committee review. Prior to the RRAC hearing, the tenant and landlord agreed to\na\nrent increase of $120.00, a 7.1% increase, bringing the rent to a total of $1,820.00\neffective June 1, 2018.\n7-B. CASE 1025 - 1621 Broadway, Apt. B\nTenant: Raquel Vazquez, accompanied by non-tenant supporter Carlos\nLandlords: Allen and Loretta Gravelle\nProposed rent increase: $165.00 (10.0%), from $1,650.00 to $1,815.00, effective July 1,\n2018\nPage 1 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 2, "text": "Approved Minutes\nJune 6, 2018\nMr. Gravelle stated that they were looking for a 10% increase and had submitted\ndocuments showing that their costs of operation have increased. Ms. Gravelle added that\nthey take care of the property and they had just hired a gardener to maintain the outside\nof the property.\nMember Murray asked for specific monetary amounts of the costs the landlords have\nincurred. The landlords stated that in 2016 they made $16,000 of improvements on the\nproperty. Ms. Gravelle provided the Committee with specific dollar amounts of costs that\nhave increased, including taxes, utilities, and insurance. She added that they had only\nincreased the rent twice since the tenancy began six years ago.\nMs. Vazquez requested that Carlos present her perspective on the rent increase. (Carlos\nwas later introduced as her ex-husband who was there to support her during the hearing).\nCarlos stated that a 10% increase would create a financial burden for Ms. Vazquez. He\nacknowledged that the landlords made improvements to the property, but stated that the\nimprovements were not to Ms. Vazquez's unit and therefore did not directly benefit her.\nHe said that both the back and front yards were not well maintained. He said that the\nlandlords have not had a gardener and it's uncertain if they will keep the new gardener\nthey claim to have hired. He said that Ms. Vazquez was not opposed to any increase, but\nbelieves 10% is excessive. He mentioned that the tenant used to pay the PG&E bill, but\nthat the landlords pay it now.\nChair Cambra asked the landlords why they started paying the PG&E bill. Mr. Gravelle\nreplied that when they renovated the laundry room, the new dryers they put in were\npowered by gas, the meter for which was not severable from the tenant's unit. In order\nto proceed with the renovation, including the new gas-powered dryers and to ensure that\nMs. Vazquez was not paying gas for the common laundry room, they took over payment\nof her gas bill, which amounted to about $25 per month.\nMr. Gravelle stated that prior to hiring the new gardener, his son would periodically do\ngrounds keeping work, but not regularly and the grounds keeping will now be done\nregularly by the new gardener.\nVice Chair Sullivan-Sari\u00f1ana asked the landlords why they did not ask for smaller rent\nincreases over several years instead of one larger one. Ms. Gravelle acknowledged that\nthis would have been better with hindsight. Mr. Gravelle added that when they were\ndoing their taxes this year they realized they needed to have more income from the\nproperty.\nMember Murray asked the landlords what the purpose of the property was for them. Mr.\nGravelle stated that he hopes to have income from the property as part of their retirement\nincome, as he was retiring in about one and a half years. Member Murray asked if they\nwere currently running at a profit or loss. Mr. Gravelle stated that in prior years they were\nrunning at a loss, and that more recently they may be just breaking even.\nPage 2 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 3, "text": "Approved Minutes\nJune 6, 2018\nMember Murray asked Ms. Vazquez why her income had decreased. Ms. Vazquez replied\nthat her former employer retired last year, and her new job did not pay as much, and\nwas on contract, not permanent employment. Member Murray asked Ms. Vazquez if she\nsaw a clear path to increasing her income. Ms. Vazquez replied that she believes her\nincome will increase but was not sure when. Member Murray asked her what impact a\n10% increase would have on her. Ms. Vazquez replied that she would probably have to\nmove, but was not sure to where since rents are high everywhere. Member Murray asked\nher if she could afford a 5% rent increase and Ms. Vazquez said she could.\nMember Friedman asked the landlords how much their expenses relating to the property\nhave increased over the past year. Ms. Gravelle provided some concrete expense\nincreases and added that operational costs and costs of supplies had also increased.\nMember Friedman asked if there had been a 10% increase in expenses. Mr. Gravelle\nstated that some of the 10% they were now requesting is not directly related to this last\nyear's increases, but also includes a desire to \"catch up\" because they had not raised the\nrent in four of the past six years. Member Murray commented that a larger one time\nincrease can be harder for a tenant to afford than multiple smaller increases, as it may\ngive the tenant less of an ability to adjust and plan their finances in a regular, sustainable\nway. She acknowledged that the purpose of Ordinance 3148 is to stabilize tenants' living\nsituations, which smaller, more regular increases would do better than fewer larger\nincreases.\nChair Cambra asked if any party learned something new that they did not know before\nthe hearing began. Ms. Gravelle said she didn't know that Ms. Vazquez had taken a pay\ncut with her new job. Chair Cambra asked if they were willing to modify their rent increase\noffer having learned this. Mr. Gravelle stated that they would accept a $124 rent increase\n(7.5%). Member Griffiths asked Ms. Vazquez how much she would be comfortable paying\nand she said she could pay 5% increase or $82.50 increase.\nVice Chair Sullivan-Sari\u00f1ana asked the landlords what impact not having the full increase\nwould have on their life. Mr. Gravelle restated that they had been losing money on the\nproperty, and understands that that's common for a number of years after buying a rental\nproperty. Ms. Gravelle added that they had two out of three of their children currently in\ncollege, and that Mr. Gravelle would be retiring soon adding to their need for additional\nincome from the property.\nVice Chair Sullivan-Sari\u00f1ana pointed out that Ms. Vazquez had indicated that she thought\na $50 increase was reasonable on her response form, and asked her to think about how\nmuch she could really afford.\nMember Murray noted that both parties had genuine financial concerns. She proposed a\nstepped rent increase: an increase of $85 for the first six months, followed by an\nadditional $80 for the second six months of the coming year.\nPage 3 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 4, "text": "Approved Minutes\nJune 6, 2018\nMs. Vazquez stated that she could not afford this proposed increase and said she could\ndo an increase of $50 for 11 months and then an additional $124 increase after that.\nChair Cambra and Member Murray explained to the parties that the RRAC would discuss\ntheir perspectives on what they had heard and give them one last chance to come to an\nagreement before asking them to return to their seats in the audience while the\nCommittee makes a decision.\nVice Chair Sullivan-Sari\u00f1ana stated that he believed all parties have legitimate financial\nconcerns and did not believe the landlord's request to be outrageous.\nChair Cambra acknowledged that the landlords only imposed two increases in six years,\ntotaling $250, and noted that making up for not increasing the rent in increments is\nproblematic. He said he believes the unit was under market rate, that he gives a lot of\nweight to the tenant's hopefully temporary financial situation, and at the same time\nwanted to give the landlords a fair increase.\nMember Friedman stated that the financial hardship on the tenant is an important\nconsideration, noting that Ordinance 3148 requires the Committee to weigh the interests\nof the parties when deciding on a fair increase. He said he did not believe a 10% increase\nwas needed for the landlord to maintain the property, and was inclined to approve an\n$85 (about 5%) increase.\nMember Griffiths disclosed that he believes a stepped increase would be an appropriate\nsolution given that the tenant stated her belief that her financial hardship was temporary,\nand given the landlords' interest in earning a reasonable rate of return on the property.\nMember Murray noted a financial need and good will on both sides. She said she believed\na 10% increase was generally reasonable but that it would cause distress to the tenant\nin this circumstance, and so would support a lesser increase amount this year. She noted\nthat the Committee is charged with stabilizing housing in the community and sees a\nstepped increase as a good option.\nChair Cambra asked the parties if they'd like to change the offers made thus far. Mr.\nGravelle stated he believes a stepped increase after six months is the best solution, and\nbelieves the increase should jump to 10% from the current rent after six months.\nMember Murray stated she believes a stepped increase that brought the increase to 10%\nwas higher than the Committee members were considering. She said she believes around\n$50 for the first step would be reasonable and the next increase would be more than\n$50, but not 10% above the current rent.\nMs. Gravelle stated she believed a $50 increase was too low.\nPage 4 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 5, "text": "Approved Minutes\nJune 6, 2018\nAfter a recess, as the parties did not reach an agreement, they took their seats in the\naudience.\nVice Chair Sullivan-Sari\u00f1ana said he did not believe a 10% increase would be warranted\neven if it were stepped, as it might force the tenant out of her home. He added that\nfinding a new job was not necessarily easy and that the consequences for the tenant\npaying a rate too high were greater than the consequences for the landlords if they did\nnot get the full increase they were requesting. He stated he believed a $50 increase for\nsix months, plus $74 additional dollars for the second six months, was a good option.\nMember Murray stated that a $50 increase for the first six months would mean that the\nsecond step would be too high to make it a 7.5% increase.\nChair Cambra asked the Committee members if they were comfortable with starting at a\n$50 increase for six months.\nMember Murray said she would be and added that she thought the second six months\nshould add an additional $75 to the rent, which would take the total increased amount\nto a 7.5% total over the course of the year.\nMember Friedman stated that a $50 increase for the first six months would give the\ntenant an increase she would be comfortable with, and bringing the rent up to a total of\n7.5% in the second six months would give the landlord an amount they had earlier\nexpressed was acceptable for them.\nMember Griffiths proposed a $50 increase for the first eight months, then an additional\n$115 for the last four months of the year. He pointed out this would give the tenant an\nextra two months of lower rent while she's looking for permanent, higher paying work,\nand give the landlords the full rent increase they were seeking in the last four months.\nVice Chair Sullivan-Sari\u00f1ana stated that he does not believe the base rent should be\nraised by 10% over the course of the year as it would be under Member Griffith's\nproposal.\nMember Murray said she would favor Member Griffith's proposal over ones previously\nproposed.\nMember Griffiths said his proposal is based off 1. The immediate need of the tenant, 2.\nThat the landlords said they were comfortable with a 7.5% increase throughout the year,\nand 3. It gets the rent where the landlords wanted it to be by the end of one year. He\nadded that he was open to additional proposals.\nPage 5 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 6, "text": "Approved Minutes\nJune 6, 2018\nMember Murray clarified that Member Griffith's proposal would give the landlords an\nincrease in rental income just above 5% over the course of the next year in total amount\nof rent paid.\nMember Murray made motion to adopt Member Griffith's proposal: eight months of a $50\nincrease, followed by an additional $115 increase for the last four months.\nVice Chair Sullivan-Sari\u00f1ana noted that his proposal was only slightly different than\nMember Murray's original proposal.\nMember Friedman stated that he favors a proposal where the tenant pays a $50 increase\nin the first six months, but was not yet sure how much the increase in the second six\nmonths should be.\nThe Members reviewed several of the proposals and found that the differences in total\nrent paid after one year to be minimal.\nChair Cambra seconded Member Murray's motion.\nVice Chair Sullivan-Sari\u00f1ana restated that he did not want the base rent to increase by\n10%, but would rather have it increase 7.5%, even if it means that the tenant had six\nrather than eight months of the lower increase. He moved to amend Member Murray's\noriginal motion as follows: a $50 increase for first six months, to a total rent of $1,700,\nthen in the second six months an additional $75 to a total rent of $1,775.\nMember Friedman seconded the amended motion, stating that he believed the concerns\nfor the parties for this year were addressed with either stepped proposal.\nMember Murray reminded the Committee that Mr. Gravelle would be retiring in one or\ntwo years, and the landlords' household income would then go down. She said that they\nhad a legitimate interest in obtaining additional income from their investment property.\nShe stated that she believed the original proposal balances the needs to of the parties\nmore equitably than the amended proposal.\nCity Attorney staff clarified that the vote before the Committee was a vote on whether to\namend the original motion, and if it fails, Member Murray's original motion would still\nstand.\nThe Committee voted on Vice Chair Sullivan-Sari\u00f1ana's motion to amend Member\nMurray's motion. The motion to amend Member Murray's original passed 4-1, with\nMember Murray voting against the motion to amend.\nChair Cambra called for a vote on the amended motion to adopt Vice Chair Sullivan-\nSari\u00f1ana's proposal (which was seconded by Member Friedman) for a $50 increase for\nPage 6 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}
{"body": "RentReviewAdvisoryCommittee", "date": "2018-06-06", "page": 7, "text": "Approved Minutes\nJune 6, 2018\nthe first six months, and an additional $75 in the second six months. The motion passed\n4-1, with Member Murray voting against the amended motion.\n8. PUBLIC COMMENT, NON-AGENDA ITEMS, NO. 2.\na. No public comment.\n9. MATTERS INITIATED\nProgram staff reminded the Committee that during the next regularly scheduled meeting\non July 2, 2018 they would again vote for Chair and Vice Chair for the Committee.\nProgram staff also announced that staff was looking to schedule their annual training for\nlate July and would email them requesting their availability to coordinate a date and time\nthat would work.\n10.ADJOURNMENT\nThe meeting adjourned at 8:50 p.m.\nRespectfully Submitted,\nRRAC Secretary\nGrant Eshoo\nApproved by the Rent Review Advisory Committee on July 2, 2018\nPage 7 of 7", "path": "RentReviewAdvisoryCommittee/2018-06-06.pdf"}