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How Oakland Landlords Fight Rent Control One longtime tenant's battle against rent increases sheds light on the unfair advantage landlords have in rent board disputes - and the procedural loopholes they can manipulate .

By Sam Levin Cl @SamTLevin

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Mark Sherman, a 72-year-old retired shop owner, has lived in the same North

Oakland apartment for thirty years. His unit has been protected since 1985 by

the city's rent control law, which protects tenants from high rent increases.

But that could soon change if his landlords, a couple based in Contra Costa

County, are successful in their push to get his property exempt from rent

control in a case that advocates say sheds light on the unfair battle Oakland

tenants often face in rent disputes.

Last year, Sherman's landlords, Harold and Diane Michelsen, filed a petition

with the Oakland Rent Board alleging that the property should not be subject

to rent control restrictions because it became a residential unit after 1983.

Properties built after that year - or ones that were not previously residential -

are exempt from Oakland's rent control law.

The petition surprised Sherman, because he knew his apartment had been

occupied by tenants in the 1970s. To prove it, he provided Oakland Rent Board

officials with phone book records and tracked down two former tenants who

submitted official statements for his case confirming that they had lived at his

Occidental Street address during the 1970s.

But a hearing officer for the city's Rent Adjustment Program, which mediates

disputes and enforces the city's rent control law, dismissed the evidence that

Sherman presented and ruled in favor of the Michelsens. And the Oakland

Rent Board, which reviews appeals, upheld the decision in favor of the

landlords in July and is expected to finalize its ruling in September.

If that happens, the Michelsens can raise Sherman's rent by as much they

want. The rent board's decision, Sherman and his attorneys fear, could prompt

his landlords to argue in court that they also have a right to evict him. "I feel

beleaguered. I feel like the weight of the system is on me," said Sherman, who

provided the Express with extensive documentation of his case, including

transcripts of rent board hearings and letters from former tenants, signed

under penalty of perjury.

Tenants' advocates say Sherman's battle highlights numerous ways in which

the rent board process is unfairly biased toward landlords. And this alleged

bias is of great concern in the current housing market, as rents are rapidly

rising and property owners are increasingly looking for ways to avoid rent

control and attract higher-paying residents.

"The thing that is so striking about this case is that he went above and beyond,"

said Sherman's lawyer Derek Schoonmaker, citing the extensive research

Sherman did to bolster his case. Schoonmaker, a staff attorney with Centro

Legal de la Raza, an Oakland-based nonprofit, noted that the process can be

significantly harder for tenants who don't speak English or don't have the time

to search for supporting evidence: "He was in some ways exceptional, and that

wasn't good enough."

Tensions between Sherman and his landlords first escalated when he

discovered that his landlords had been violating the city's rent control law for

years. They had not given him an official Rent Adjustment Program notice as

required by law. From 1985 to 2010, the landlords had gradually raised his

monthly rent from $1,225 to $1,687, based on cost-of-living increases allowed

under the city's rent control ordinance - but had failed to provide him with the

proper notice.

In 2012, Sherman filed a petition contesting the increases, and last year, a

program hearing officer ruled in his favor, awarding him $15,036 to cover the

invalid rent hikes and mandating that his landlord revert back to the 1985 rate.

But the landlords then filed a separate petition with the rent board, arguing for

the first time since Sherman moved in that his unit shouldn't be subject to rent

control laws in the first place based on city law exempting units "newly

constructed" after 1983.

The four-unit building was built in the early 1900s and was at one point used

as a printer's warehouse, before being converted to residential housing,

according to Sherman. At his first hearing in the exemption case, he presented

to hearing officer Linda Moroz a letter from a former tenant who stated that he

had lived at Sherman's address from 1976 to 1978. Phone book records also

corroborated this evidence.

Moroz, however, rejected the evidence because it was not signed under penalty

of perjury. But according to Schoonmaker, there is no formal requirement in

this type of administrative hearing that written statements be sworn testimony.

In addition, Moroz misquoted an email from a city official, writing in her

decision that the building added housing "in [the] mid-Sos," when the email

from the city official - which was not signed under penalty of perjury - had

simply noted that there was housing in the structure "by the mid-Sos."

"The exemption was improperly given because of the serious errors that the

hearing officer made," said Leah Hess, a private, Oakland-based housing

attorney also representing Sherman. "There was very strong evidence that

there might be something amiss with what the landlord was claiming."

It was at Sherman's appeal to the rent board, however, that the flaws in the

process really became clear, his attorneys said. Sherman returned with a new

letter from the former tenant signed under penalty of perjury and a second

sworn letter from another former tenant who said he lived at the address in the

1970s. But the rent board declined to consider the new evidence, and decided

not to overturn the hearing officer's decision or even send it back for another

review.

The rent board is made up of six members - two tenant representatives, two

landlord representatives, and two others who are supposed to be neutral.

Those latter two members, however, are generally homeowners who often side

with landlords in controversial cases, according to tenants' advocates . (The

mayor nominates candidates and the city council approves them). In

Sherman's appeal, only the two tenant representatives voted in his favor.

This was despite the fact that Richard Illgen, an Oakland deputy city attorney

who advises the board, stated at the hearing that administrative officers have in

the past accepted as evidence letters that were not signed under penalty of

perjury. Connie Taylor, the city's Rent Adjustment Program manager, also

noted at the hearing that Moroz arbitrarily accepted an unsworn declaration

the landlord presented (the email from a city official) , but rejected the similarly

unsworn statement of the tenant (the former resident's letter) .

"There is no rhyme, no reasoning behind why she treated them differently,"

Taylor said, according to a transcript provided by Sherman.

At the hearing, Schoonmaker also pointed to a past rent control exemption

dispute in which the Oakland Rent Board ordered a new hearing specifically to

allow the landlord to submit new evidence that he did not originally provide.

"It seems dysfunctional to not consider clear evidence in front of them. It just

seems really unfair," Sherman told me.

In a brief phone interview, Diane Michelsen said, "The facilities were never

rented as a living space prior to 19S3," adding that she and her husband did

rent the property to artists to use as a studio.

"There was no one living there with our permission," she continued. Regarding

the letters from former tenants, she added: "I don't think they are valid."

The six board members either declined to comment on Sherman's case or did

not respond to inquiries for comment for this report. Moroz, the hearing

officer, did not respond to a request for comment. Taylor declined to comment

on the specifics of the case, but said that when landlords seek exemptions

based on the new construction exemption, they have to prove that "it wasn't

previously used as a residential unit."

East Bay housing lawyers, including Hess, noted that they are increasingly

getting calls from tenants concerned about their landlords' efforts to raise rents

or evict them.

According to an annual report from the city, 43 landlords in Oakland requested

exemption certificates in fiscal year 2012-13. The report, however, does not

include data on the outcomes of these cases, and Taylor said she was unable to

provide that information by press time. Of the total 355 cases resolved by the

rent board during the 2012-13 fiscal year, tenants prevailed in 53 percent of

them, while landlords won 47 percent.

But James Vann of the Oakland Tenants Union said that tenants only win

appeals in cut-and-dried cases - for example, when landlords don't appear or

miss deadlines. Nuanced cases involving the history of a property are very

difficult for tenants, he said. "The board is unfortunately very biased against

tenants."

It's especially important, he continued, that exemption cases are fair and

thorough, considering the broad and long-term impact of a ruling in the

landlord's favor. "Unless it somehow gets overturned, it means that forever

that property is removed from [the rent control program] and that no tenant in

that building can ever have any protection. So you have to be very, very careful

when you grant an exemption."

Vann, who is not directly involved in Sherman's case, but sat in on the

hearings, added: "They did absolutely everything wrong in that case. That was

a terrible decision, and it needs to be reconsidered."

Correction: The original version of this report incorrectly stated the

percentage of rent board cases won by tenants and landlords in 2012-13.

Tenants prevailed in 53 percent of cases while landlords won in 47 percent.

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