The Board of Supervisors passed three pro-tenant measures
yesterday, sponsored by Chris Daly and designed to help renters facing tough times. The measures: (a) allow tenants to take on unrelated roommates, (b) limit “banked” rent hikes to 8% a year and (c) block rent increases for “financial hardship.” Before the vote, Daly amended the “financial hardship” proposal so that it applies to fewer tenants – and added a sunset provision for when the economy rebounds. The six most progressive members supported the three measures, with Bevan Dufty voting for the one on “banked” rent increases. Mayor Gavin Newsom is expected to veto the package, but advocates are hopeful he will sign the one on banked increases – and perhaps the one on roommates. Eight votes are needed to override a veto. Sophie Maxwell, who is a small landlord, recused herself – but a legal opinion by the Fair Political Practices Commission on July 8th may allow her to weigh in on the veto override.
With the City unemployment rate at 9.5%, Supervisor Chris Daly introduced three amendments
to the Rent Ordinance. The first allows tenants to take on an unrelated roommate without risk of eviction, if the total occupancy rate does not exceed code maximums. The City has a similar measure for tenants who move in a spouse or direct relative. The second helps tenants who suddenly get a huge rent hike that includes all prior unused rent increases
that the landlord never imposed. It would still allow landlords to recoup those increases, but at a “phased-in” maximum of eight percent a year.
The third measure, which has generated more controversy, would allow tenants who pay more than 33% of their income in rent to apply for a “financial hardship” exemption if they get a rent increase. At yesterday’s meeting, Daly added to his proposal in order to make it more focused and politically palatable. Beyond the 33% requirement, the tenant would have to: (a) be unemployed, (b) have taken a recent pay cut, or (c) be living on government assistance and did not get a cost-of-living adjustment this year. The proposal would also sunset when San Francisco’s unemployment rate dips below five percent.
The six most progressive Supervisors voted for all three measures, but Mayor Newsom has said he plans to veto at least some of them. Bevan Dufty voted against the roommate legislation and opposed the “financial hardship” proposal, but supported the limit on banked rent increases. No measure, however, got the eight votes needed to override a veto. Sophie Maxwell abstained due to “conflict-of-interest,” upon the advice of the City Attorney -- and in the absence of other legal authority, she is required to do so. But the SF Tenants Union has asked the Fair Political Practices Commission to issue a ruling – which will be released on July 8th – before a possible veto override.
On June 4th, the City Attorney’s Office wrote a four-page memo to Sophie Maxwell, advising her to recuse herself. The memo suggested it was “reasonably foreseeable” that the proposals would have a “material financial effect” on Maxwell – beyond what the general public will face. Because she’s a landlord, they said, state law compels her to abstain. The state law in question exempts landlords who own three units or less from recusing themselves on rent control measures, because they don’t have “as much” of a conflict. But Maxwell owns six rental units – which makes it complicated.
Regulation 18707.9(b) of the California Fair Political Practices Commission lists five factors that a landlord elected official who owns more than three units and wants to vote must qualify under. Maxwell must recuse herself unless: (1) the legislation affects the rights of her tenants, and (2) it has no financial effect on her besides property ownership, and (3) her economic interests are “not directly involved” in the legislation, and (4) the proposal affects at least 10% of rental units in Maxwell’s district and (5) the law affects Maxwell in “substantially the same manner” as it does to other owners of rental property.
Based on my quick reading of the regulation, factors (1), (2), (4) and probably (5) apply in this situation. So it really comes down to (3): whether or not her economic interests are “directly involved” in this proposal. Regulation 18704.2(a) goes on to define what “directly involved” means by giving six different possibilities. Only one – subsection (2) – possibly applies here: the governmental decision involves the zoning or rezoning, … sale, purchase or lease … of the real property in which the official has an interest or a similar decision affecting the real property.
Based on this factor, recusal is likely.
If the FPPC determines that Maxwell is not recused on these measures, progressives will have another vote if the Mayor vetoes it. But otherwise, a successful override is unlikely.