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WITHDRAWN ON 1/16/2018 at 12:30 P.M. - Recommendation to Review the Rent Increase Concerns at 3315 Willis Lane and Consider Whether to Authorize the Mayor to Send a Letter Encouraging the Owner to Comply with the Rent Review Advisory Committee’s (RRAC) Decision. (Housing 236) [Note: The Tenant and Landlord reached an agreement and the matter has been withdrawn from the agenda.]
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To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Review the Rent Increase Concerns at 3315 Willis Lane and Consider Whether to Authorize the Mayor to Send a Letter Encouraging the Owner to Comply with the Rent Review Advisory Committee’s (RRAC) Decision
BACKGROUND
The Rent Review Advisory Committee (RRAC) was formed in 1979 to review tenant complaints related to residential rental increases. At that time, there were no guidelines or regulations related to the type of unit, age of building, or amount of proposed increase for complaints to be filed with the RRAC. The RRAC, however, then as now, is intended to provide a neutral forum for renters and residential property owners to present their views, evaluate rent increases, and determine whether proposed increases are equitable, and, if not, attempt to mediate a resolution acceptable to all parties.
The duties, and to some extent the authority, of the RRAC changed when the City Council adopted the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance No. 3148, effective March 31, 2016. Under this Ordinance, landlords requesting a rent increase above 5% are required to appear before the RRAC, irrespective of the type of unit. In those cases, the RRAC renders binding decisions for multifamily units built prior to February 1995, with an option for those parties to petition the RRAC decision to a hearing officer, who would then issue a binding decision.
However, the Ordinance exempts certain units from a binding decision concerning rent increases based on State law. The exempt units include single-family homes, condominiums, and multifamily units built after February 1995. The Ordinance also provides that when a rent increase is 5% or less, the tenant may request the RRAC to review the rent increase but the RRAC decision concerning such increases is also non-binding. Moreover, where, as here, the RRAC has decided a rent increase concerning an exempt unit (or where the RRAC has made a decision concerning a rent increase of 5% or less), the Ordinance allows either party to request that the City Council review an advisory RRAC decision. The City Council may issue a non-binding decision concerning the rent increase, which may support the RRAC decision, in the form of a letter to the owner from the Mayor.
DISCUSSION
The subject property, 3315 Willis Lane, is a three-bedroom condominium owned by the Pereira Survivor’s Trust under the Raymond W and Mildred L Pereria Living Trust. It is operated by trustee Alan Statman. On November 1, 2017, Mr. Statman filed Form RP-04 with the Rent Program requesting a rent increase of $2,000 (133.3%) (Exhibit 1), raising the rent from $1,500 to $3,500.
Tenants Mikk Teeveer and Ingrit Suurhallik filed a response, Form RP-01, contesting the increase amount (Exhibit 2).
On December 4, 2017, the RRAC reviewed the rent increase. A summary of the case and RRAC decision is reflected in the draft minutes from the December 4, 2017 RRAC hearing (Exhibit 3). (Audio recording of the meeting is currently available on the Rent Program website (www.alamedarentprogram.org). The draft minutes are scheduled to be approved at the January 10, 2018 RRAC meeting. Thereafter, the approved minutes will replace the draft minutes and be made available to the City Council and the public.)
At the hearing, trustee Alan Statman appeared on behalf of the landlord; Mikk Teeveer appeared for tenants, and both were given an opportunity to address the RRAC members and provide testimony. Specifically, Mr. Statman reiterated that under the Probate Code, he has a fiduciary duty to ensure the trust assets are productive. Mr. Teeveer acknowledged the need for a rent increase, but took issue with the amount of the increase and stated that his family needed time to adjust or absorb the increase. Mr. Teeveer stated that a $750 rent increase would be reasonable if he were provided a two-year lease.
Ultimately, the RRAC determined by a 4-1 vote that the rent increase under the circumstances should be $750 (50%) for a total monthly rent of $2,250 for the year, the amount that Mr. Teeveer had proposed.
Following the RRAC hearing, on December 5, 2017, Rent Program staff issued a letter and an email to the landlord and tenants confirming the RRAC’s decision and asking for a response by December 11, 2017 (Exhibit 4). On December 12, 2017, Mr. Statman replied by email that although he does not agree with the RRAC’s decision, he would not seek an appeal since the decision was non-binding. The original rent increase of $2,000 has now been implemented.
On December 11, 2017, Mr. Teeveer requested City Council review the RRAC’s non-binding decision (Exhibit 5).
Pursuant to Section 6-58.95.B, the Council’s review of the matter is limited to reviewing the RRAC’s determination and, if applicable, authorize the Mayor to send a letter to the owners as to the Council’s non-binding recommendation as to the rent increase.
FINANCIAL IMPACT
There is no financial impact to the City by encouraging the owner to comply with the RRAC’s decision.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The duties of the RRAC are set forth in Section 2-23.4 of the Municipal Code. The City Council’s review of the Committee’s decision is set forth in Section 6-58.95 of the Municipal Code.
ENVIRONMENTAL REVIEW
This action is not a project subject to environmental review under the California Environmental Quality Act as it does not have the potential for resulting in either a direct physical change in the environment or a reasonable foreseeable indirect physical change in the environment.
RECOMMENDATION
Acknowledge the rent increase concerns at 3315 Willis Lane and authorize the Mayor to send a letter encouraging the owner to comply with the Rent Review Advisory Committee decision.
Respectfully submitted,
Rent and Community Programs
Housing Authority of the City of Alameda
Financial Impact section reviewed,
Edwin Gato, Acting Finance Director
Exhibits:
1. Landlord filing: Form RP-04
2. Tenant filing: Form RP-01
3. Draft Minutes of 12/4/17 RRAC hearing
4. Staff letter confirming RRAC decision
5. Tenant request for City Council review