Q: How does the San Francisco Rent Board determine the monetary damages and a substantial decrease in housing service petition? Is it based upon market value or proportional to the rent? Our rent control tenant pays less than 50% of the market rate for the apartment. They temporarily lost access to the garage and laundry while we repaired the foundation.
We originally asked them if they wanted a garage during construction they said they were fine with street parking. They are now asking to be reimbursed for the full market rate of garage space and laundry service for the month they did not have access. Thank you. Very good question. So what happens when you have a below-market unit and you have a decrease in rent?
A: Typically, the rent board is going the hearing officer is going to look at the rent and look at what proportion loss or percentage loss that that loss of use would mean in the context of your rent prevailing. Market rent for a garage is informative of the substantial decrease assessment, but it's not the core issue. The core issue is what is the percentage loss that would suffer.
So where we have a well below market unit, if we have a substantial decrease, it is likely that the rent board hearing officer will take into account the current rent and make a percentage deduction off the current rent to determine what the loss would be. Otherwise, you could have a situation where someone is paying $500 a month for a one-bedroom apartment in the Marina.
You take away parking, you take away a garage, you take away storage, you take away heat. You could end up with a situation in the absurdity. If it's all based upon market conditions that you would owe the tenant money for their right to occupy the premises, and that's simply not going to happen. So they do take into account the actual value of the rental based upon the rent that the tenant is paying, not simply market rate.