§ 8.57.110. Standards for evaluating rent increases.

A.

Factors for Consideration. In evaluating the rent increase proposed by the owner, the commission shall consider, along with all relevant factors, changes in costs to the owner attributable to increases or decreases in master land or facilities lease rent, utility rates, property taxes, insurance, advertising, variable mortgage interest rates, governmental assessments and fees, incidental services, employee costs, normal repair and maintenance, and other considerations, including, but not limited to, capital improvements, upgrading and addition of amenities or services, and the level of rent necessary to permit a just and reasonable return on the owner's property.

B.

Presumption of Fair Base Year Net Operating Income. Except as provided in subsection C of this section, it shall be presumed that the base rent adjusted pursuant to Section 8.57.070 of this chapter provided a fair return on property. Owners shall be entitled to maintain and increase their net operating income from year to year in accordance with subsection C.

C.

Rebutting the Presumption. It may be determined that the base rent adjusted pursuant to Section 8.57.070 of this chapter yielded other than a fair return on property, in which case it may be adjusted accordingly. In order to make such a determination, the commission must make at least one of the following findings:

1.

The owner's operating and maintenance expenses in the base year were unusually high or low in comparison to other years. In such instances, adjustments may be made in such expenses so the base year operating expenses reflect average expenses for the property over a reasonable period of time. The commission shall consider the following factors:

a.

The owner made substantial capital improvements during 1985, which were not reflected in the rent levels on the base year date,

b.

Substantial repairs were made due to damage caused by natural disaster or vandalism,

c.

Maintenance and repair was below accepted standards so as to cause significant deterioration in the quality of housing services, and

d.

Other expenses were unreasonably high or low, notwithstanding the following of prudent business practice. In making this determination, the fact that property taxes prior to 1985 may have been higher than in the base year shall not be considered. It is not the intent of this chapter to reward inefficient business practices;

2.

The rent on the base-year date was disproportionate due to one of the enumerated factors below. In such instances, adjustments may be made in calculating gross rents, consistent with the purposes of this chapter:

a.

The rent on the base-year date was established by a lease or other formal rental agreement which provided for substantially higher rent at other periods during the term of the lease,

b.

The rent on the base-year date was substantially higher or lower than at other times of the year by reason of seasonal demand or seasonal variations in rent, and

c.

The rent on the base-year date was substantially higher or lower than preceding months by reason of premiums being charged or rebates being given for reasons unique to particular units or limited to the period determining the base rent.

(Ord. 87-0228 §§ 1 (part), 12, 1987.)