Hogan: were you saying that this amount needs to be based on the total rent or is it
based on the tenants share?
Moermond: I was trying to establish a record for the future that the rent increase you
are asking for would not impact what the tenant is paying. Rather, the rent increase
would impact the amount of reimbursement received from the section 8 program. Let’s
say the tenant, based on the section 8 analysis, would owe $500 in rent. You are
charging $1,500. That $1,000 is paid by Section 8. If you get a rent increase to $1,750,
the tenant is still paying 500 since it is based on their income, and section 8 would pay
that extra $250. I wanted that clear in the public record since you are the first section 8
landlord to go through this process. I think that distinction is important. The tenant
would be unimpacted.
Hogan: based on that you still have the same conclusion as before?
Moermond: I don’t have the ability to create an exemption based on this being
affordable housing or housing that is Section 8. Or what the federal reimbursement
guidelines are. None of those things are in the list of exceptions that can be made
under the ordinance as it is written now.
Hogan: what are those 7 things allowable to get that increase?
Moermond: increases or decreases in property taxes, unavoidable increases or
decreases in operating expenses, capital improvements, number of tenants,
substantial deterioration beyond normal wear and tear, failure to provide adequate
housing services, and then the pattern of recent rent increases or decreases. When
you filled out the Maintenance of Net Operating Income (MNOI) worksheet you are
answering questions that apply to those points.
Hogan: so it is already baked into the cake when I filled that out.
Moermond: yes, the worksheet is intended to capture those 7 situations where an
exception could be made. Your situation wanting an exception because it is affordable,
Section 8 housing, those aren’t in those 7. They arguably in the revised version which
hasn’t’ been adopted, it is all up in the air. I can’t tell you what the world will look like
Hogan: the part I’m still not understanding is you have these 7 categories, which I get,
what are the cases where once that staff decision is made that an appeal would be
granted in this setting to go beyond that. What I’m hearing is there are no cases—
Moermond: no, I would say there are definitely cases. What you are appealing is the
Hogan: so the only grounds be if there was an error in staff decision based on
Moermond: that is one path for an appeal. Or misinterpreting the rules. The rules are
adopted by the administration. That is how they are enforcing the ordinance. What I
concern myself with primarily is the actual ordinance on the books. This is the law.
DSI interprets the law. My interpretation of this is that your argument for increasing
beyond what you are allowed isn’t something allowable under the law. You could
provide another way to analyze your information under the rules that may present a
better case. Let’s say the MNOI worksheet didn’t calculate cash flow of the way you
manage your business in a logical way. You wanted to say, I do business this way, the
worksheet you gave me doesn’t take that into account. Hearing officer, if you look at
the way I presented the numbers rather than the way staff does, you get this
conclusion. That is what happened int eh first case I heard. The owner was doing