1282. Individual Rent Adjustments for Units in Properties With No Vacancy Increases Since December 31, 1998
(A) Purpose. The purpose of this regulation is to provide timely and fair adjustments of rents in properties where all of the units have been occupied by long-term tenants since prior to the inception of full vacancy decontrol on January 1, 1999.
Historically, over the period from the inception of the ordinance in 1980 to 2004, the Rent Board’s AGA process provided increases in rent ceiling roughly comparable to the increase in the Consumer Price Index (CPI) and these increases met the constitutional standard for providing a fair return on the owner’s investment. (“The Effects of Rent Stabilization and Vacancy Decontrol on Rents, Rental Property Values and Rent Burdens in Berkeley, California”, April 19, 2010.) There are a limited number of properties where all tenants are long-term tenants who have been in place since before January 1, 1999 when full vacancy decontrol began. In these properties the average rent increase for the entire property allowed by the AGA formula in effect since January 2005 is less than the increase in the CPI and this could restrict the owner’s opportunity to earn a fair return. For these properties this regulation will allow a catch-up increase in rent ceiling approximately equal to the difference between the percentage CPI increase measured from the June 2004 index number to the June 2011 index number and the percentage increase in rent ceiling measured by the AGA increase in the allowable rent ceiling from January 2005 to January 2012.
(B) Qualifying Units. A unit is a qualifying unit and shall be entitled to an increase in rent ceiling under this regulation if it is in a property where no units have received a vacancy increase on or after January 1, 1999 and no units are currently exempt from registration except that one unit may be owner-occupied.
(C) Increase in Rent Ceiling. Qualifying units shall be eligible for a supplementary increase of 3% of the lawful rent ceiling in effect on the filing date of the petition and twelve months after the initial increase, a further increase of 3% of the lawful rent ceiling then in effect. The initial increase can take effect no sooner than January 1, 2013.
(D) Petitions; Notice.
(1) Owners of qualifying units may petition for individual rent adjustments pursuant to this section on a form prescribed by the Board. Neither fees nor supporting documents are required to accompany the petition when filed. The petition shall be served on tenants pursuant to Regulation 1210(A).
(2) The Board shall notify each tenant of a unit subject to a petition under this section following receipt of the petition. The notice shall state that the tenant has a right to object to the petition, and that if the tenant does not object within the time allowed, or the tenant's objection does not specify one or more grounds listed in section (E), the rent for the tenant's unit may be increased by the applicable amount under subsection (C), based on the information in the landlord's petition and the Board's files.
(E) Grounds for Tenant Objection. Tenants subject to petitions under section (C) may file objections with the Board within twenty (20) days of the date the Board gives notice that the petition has been filed. No fee shall be required to accompany tenant objections. Such objections must be made on one or more of the following grounds:
(1) The property or unit does not qualify under subsection (B). Any such objection shall state which unit or units have received a vacancy increase subsequent to December 31, 1998.
(2) The owner is charging more than the legal rent ceiling for the unit.
(3) The unit is substantially deteriorated, does not currently provide adequate housing services or fails to comply substantially with applicable state rental housing laws or local housing, building, health and safety codes.
(4) The unit has suffered a significant decrease in space or services since the tenant moved in, or the landlord is in material breach of the rental agreement.
(5) The rent ceiling for the unit has previously been adjusted under this regulation.
(F) Rent Increases.
(1) For any unit where, after the Board gives notice of the petition, no tenant objects on a ground listed in subsection (E), and where the information on the petition substantially conforms to the records of the Board, the Board shall increase the lawful rent ceiling to the applicable amount pursuant to subsection (C) for the tenant's unit. The record closes thirty (30) days after the filing of the petition or upon the filing of express written waivers of the right to a hearing signed by all affected tenants, whichever is sooner.
(2) For any unit where no tenant files a timely objection, and where the evidence submitted does not support the assertions in the petition or information in the petition does not substantially conform to the records of the Board, the Board shall notify the petitioner that the petition will be dismissed unless the petitioner cures the defect within thirty (30) days of receiving notice of the defect. The Board shall issue a decision on the petition within twenty (20) days of receipt of the petitioner's response.
(3) If any tenant files a timely objection, the Board shall set the petition for an individual rent adjustment hearing. Proceedings shall be conducted according to all provisions of Chapter 12, Subchapter B.
(4) Individual rent adjustment determinations under this regulation shall be based only on the issues raised by the petition and the specific objections made under subsection (E). Where an objection is found to be valid, the rent increase authorized under this regulation shall be denied or deferred, as the hearing examiner or Board determines to be appropriate. Any increase that is deferred due to a valid tenant objection shall be made effective following proof of compliance, in accordance with Regulation 1250.
(G) Review. The Rent Program staff shall include in the annual AGA report to the Board a report on the number of properties and units receiving increases under this regulation, the number of units potentially eligible and the cumulative percentage difference between the increase in the AGA and the increase in the CPI, so that the Board may consider whether to adjust or extend the increases allowed under this regulation.
[Adopted on July 16, 2012.]