pages: RentReviewAdvisoryCommittee/2017-09-06.pdf, 2
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RentReviewAdvisoryCommittee | 2017-09-06 | 2 | Draft Minutes September 6, 2017 Mr. Hockema explained he is in the Coast Guard and was recently stationed in Alameda. He purchased the property this summer and will be living in one of the units. Mr. Hockema stated that the constitution entitles him to a fair rate of return on the property. He is asking for this rent increase in order to cover expenses and mortgage. Mr. Hockema acknowledged that he was aware of Alameda's rent regulations at the time of purchase. He was out of state during most of the sale process and does not believe he was provided with accurate information for the seller. Mr. Ramdoun stated that he moved to the US from Syria 14 years ago. His wife is currently in school and Mr. Ramdoun's income as a limousine driver supports his wife, 2 year-old daughter and mother, who lives nearby. Mr. Ramdoun stated that he understands the landlord's situation and would offer more financially if he was able. At present, if he were to pay the full rent increase requested, he would not have enough income to support his family. He expects that his family's financial situation will change in the next 2 years once his wife completes her master's degree in chemistry. He stated that he was friends with his previous landlord and they had a verbal agreement that we would fix maintenance issues in exchange for no rent increases. Committee members asked questions regarding the landlord's financial decisions when reviewing the property for purchase. There was discussion around the short term and long term goals of both parties. Mr. Hockema stated that the lowest rent increase he is comfortable with would be $1,500. If he does not receive this amount, he is concerned that his effort to invest in property would be fruitless and he may have to sell in a few months. Committee members asked about income from the other rental unit on the property. Mr. Hockema stated that he preferred not to discuss at this time as there are several pending issues with the tenant. Mr. Ramdoun stated that a $100.00 increase to $1,200 is the maximum his family could afford. The parties were unable to reach an agreement. Committee members concluded the conversation with tenant and landlord and opened deliberation between members to render a recommendation. Member Friedman explained that he sees a clear financial impact on the tenant. He stated that the reasonable rent increase depends on the Committee's understanding of a fair return on investment for the landlord. He noted that this matter can be defined in a number of different ways. Acknowledging that the topic is not the Committee's area of expertise, his understanding is that a landlord does not have the right to immediately break even when a property is recently purchased. A return on investment is calculated over the long term. Member Friedman brought attention to the City's regulations that a landlord has reasonable presumption to cover Page 2 of 7 | RentReviewAdvisoryCommittee/2017-09-06.pdf |