Tehlirian v. City and County of San Francisco

Filed 3/16/07 Tehlirian v. City and County of San Francisco CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

Appellants Ara Tehlirian, Berg Tehlirian, and ABT LLC (petitioners)[1] seek reversal of the superior courts denial of their petition for writ of administrative mandate, as well as an order directing issuance of a writ to the San Francisco Board of Appeals instructing them to reconsider petitioners permit application and make legally relevant findings. We affirm the superior courts denial of their petition.

BACKGROUND

Petitioners own an old residential duplex located a 572-572A San Jose Avenue in San Francisco, purchased by Ara and Berg Tehlirian in 1994. The duplex consists of two units, one on the ground floor and one on the second floor, each containing two bedrooms and one bath, and measuring approximately 750 square feet. Real party in interest Jose Morales, 76 years old as of June 2005 and a self-described low-income senior, has resided in one of the two residential units in the building since 1965; the other unit has been vacant during this dispute.

In November 2002, petitioners, through their architect, Best Design and Construction, submitted a building permit application to the Department of Building Inspection for the City and County of San Francisco (City).[2] The proposed project would remove the existing brick foundation, convert the ground floor residential unit into a two-car garage and storage facility, renovate the second floor residential unit, and add a third floor, to be used as a second residential unit. The project would add 335 square feet to the ground floor, 368 square feet to the second floor, and a 1,038 square foot third floor, extending the building in the front and back.

Morales requested the Planning Commission (Commission) conduct a discretionary review of petitioners application. The subsequent Planning Department staff report to the Commission summarized petitioners proposed project as follows:

The proposed project aims to convert the first floor into a garage (currently it is used as a dwelling unit), in order to provide parking for the two dwelling units located above. The second floor the existing dwelling unit, the entryway, [sic] and provides a horizontal rear addition of 135 square feet. It proposes a horizontal front addition of 625 square feet and a new bay window. This second floor unit has two bedrooms and two bathrooms. The proposal also includes a vertical addition, a new third floor to house the second dwelling unit. The unit has two bedrooms and two bathrooms and is larger than the existing dwelling unit by approximately 300 square feet. The existing units measure approximately 750 square feet. The re-modeled units measure approximately 1,050.

According to the Planning Department staff summary, Morales was concerned that his displacement will affect his health, he will incur relocation costs, and that the proposal will result in increased rental costs. The tenant is also concerned that the project would reduce the citys affordable housing stock.

After further analysis, the Planning Department staff reported: There are concerns that this project is a demolition. The Department of Building Inspection has made the determination that this project is an alteration, not a demolition. Therefore, the Planning Department has received the application as an alteration. The staff recommended that the Commission not take discretionary review and approve the project as proposed. The Commission subsequently conducted a discretionary review of the project and denied the building permit application in October 2003 by a four-to-one vote, based on the following findings:

The proposed project is not a major alteration but a de facto demolition; []  The project would result in the de facto loss of affordable housing by improving and expanding the existing units that are currently accessible to lower-income tenants because of their size and relative lack of amenities; []  The proposal might result in the displacement of an elderly man with limited income; and []  Any conditions of approval attached to the building permit relating to rental rates, relocation, tenants right of return, and other arrangements made between the landlord and tenant would not be enforceable by the [Commission].

Petitioners appealed to the Board of Appeals (Board) on the ground that the Commission erred in its determination that the alterations were a de facto demolition. In February 2004, the Board heard statements from, among others, Ara Tehlirian, Morales, and the public. Ara Tehlirian stated that he and his family wanted to move to San Francisco and live on the premises in order to be closer to family, and needed to make the alterations called for by the project in order to do so. The Board voted three to two to overrule the denial and grant the permit with conditions as presented by petitioners, which vote was insufficient to overturn the denial. After a rehearing in November 2004, the Board voted three to two to uphold the denial. The Board did not make specific findings regarding either ruling.

Petitioners filed a petition for a writ of administrative mandate in superior court pursuant to Code of Civil Procedure section 1094.5. The court denied the writ in September 2005, finding that the Board had substantial evidence before it that the project would impact the Citys health, safety, and welfare by reducing its stock of affordable housing.

This timely appeal followed. We have granted each partys request for judicial notice of certain documents. These include excerpts from the Housing Element of the Citys General Plan and documents related to petitioners notice of withdrawal of the rental unit occupied by Morales pursuant to the Ellis Act, which we discuss further, post.[3]

DISCUSSION

On appeal, petitioners argue that (1) the board failed to proceed in a manner required by law because it failed to make findings in affirming the Commissions decision to deny the permit; and (2) there is no substantial evidence to support the findings that the proposed remodel is either a demolition or would negatively affect the Citys affordable rental housing stock. Neither argument has merit.

I. The Findings Issue

Petitioners argue that the Board failed to make findings in this case, constituting an abuse of discretion under Code of Civil Procedure section 1094.5, citing Topanga Assn. for a Scenic Community v. County of Los Angeles (1974) 11 Cal.3d 506, 515 (Topanga) and Hadley v. City of Ontario (1974) 43 Cal.App.3d 121, 127-129 (Hadley).)

Code of Civil Procedure section 1094.5, subdivision (b) states in relevant part that [a]buse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence. This section clearly imports a duty on the part of the administrative agency to make findings as a basis for judicial review. (Hadley, supra, 43 Cal.App.3d at p. 127, citing Topanga, supra, 11 Cal.3d at pp. 515-517.) However, this duty has not been extended to appellate bodies reviewing administrative agency decisions. (Ross v. City of Rolling Hills Estates (1987) 192 Cal.App.3d 370, 376 (Ross) [stating, [b]y affirming the Commissions decision, the Council in effect adopted its findings]; Carmel Valley View, Ltd. v. Board of Supervisors (1976) 58 Cal.App.3d 817, 823 (Carmel Valley View) [the action of the board of supervisors in effect adopted the findings of the Commission].)

Here, the Commission made specific findings, which we quotein the discussion portion above. These findings are sufficient to apprise the parties and the court of the basis for the Citys action here. (Ross, supra, 192 Cal.App.3d at p. 377.) The Board, by upholding the Commissions ruling, in effect adopted these findings. (Id. at pp. 376-377; Carmel Valley View, supra, 58 Cal.App.3d at p. 823.) Petitioners argument is without merit.

II. The Substantial Evidence Issue

A. Substantial Evidence Standard of Review

The parties agree that because the right at stake is not a fundamental right, we apply a substantial evidence standard of review (Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d, 28, 44-45), doing so to review the Boards decision, not the trial courts. (Auburn Woods I Homeowners Assn. v. Fair Employment & Housing Com. (2004) 121 Cal.App.4th 1578, 1583 (Auburn).) In reviewing the validity of the Boards decision, Code of Civil Procedure section 1094.5 requires we inquire into whether the Board acted in excess of its jurisdiction and whether there was any prejudicial abuse of discretion. (Auburn, at p. 1583.) Abuse of discretion is established if the Board failed to proceed in the manner required by law or its finding . . . is not supported by substantial evidence in light of the whole record. (Ibid.)

We exercise the same function as the trial court and must decide if the Boards findings were based on substantial evidence. (Auburn, supra, 121 Cal.App.4th at 1583.) We do not reweigh the evidence, and must view the evidence in the light most favorable to the Boards findings and indulge in all reasonable inferences in support thereof. (Ibid.) We may not isolate only the evidence which supports the administrative finding and disregard other relevant evidence in the record. [Citations.] On the other hand, neither we nor the trial court may disregard or overturn the [Boards] finding for the reason that it is considered that a contrary finding would have been equally or more reasonable     (Ibid.) We must uphold the Boards decision unless the review of the entire record shows it is so lacking in evidentiary support as to render the decision unreasonable. (Ibid.) Substantial evidence is defined as:  relevant evidence that a reasonable mind might accept as adequate to support a conclusion, . . . [Citation] or evidence of ponderable legal significance . . . reasonable in nature, credible, and of solid value. (Auburn, supra, 121 Cal.App.4th at 1583.)
Moreover, if the Board committed errors of law, we are not bound by its legal conclusions. (Auburn, supra, 121 Cal.App.4th at 1583.)

B. The Scope of Administrative Review

San Francisco administrative authorities exercise discretion in the review of permit applications pursuant to San Francisco Business and Tax Regulations Code, article I, section 26, subdivision (b), which provides: [I]n the granting or denying of any permit . . . the granting . . . power may take into consideration the effect of the proposed business or calling upon surrounding property and upon its residents, and inhabitants thereof; and in granting or denying said permit . . . may exercise its sound discretion as to whether said permit should be granted . . . denied or revoked.

Article I, section 26 of the San Francisco Business and Tax Regulations is comprehensive language affecting the issuance of all permits sought under the authority of the relevant San Francisco Charter and ordinance provisions [that] in plain terms vests the granting power with a sound discretion generally. (Lindell Co. v. Board of Permit Appeals (1943) 23 Cal.2d 303, 311; see also Guinnane v. San Francisco City Planning Com. (1989) 209 Cal.App.3d 732, 738, fn. 4 (Guinnane); Martin v. City and County of San Francisco (2005) 135 Cal.App.4th 392, 406-407 (Martin).)

Furthermore, [s]ection 26 . . . vest[s] administrative authorities with very broad discretion to decide whether and on what conditions an applicant will be granted a permit. And if the application is for a building permit, the fact that the applicants project complies with zoning ordinance and building codes does not restrict the scope of that discretion. (Martin, supra, 135 Cal.App.4th at p. 400; accord, Guinnane, supra, 209 Cal.App.3d at p. 736 [compliance with the zoning laws and building codes did not entitle [the applicant] to a building permit as a matter of course].) Thus, the Commission has the discretion to reject a permit simply because a proposed residential development is unsuitable for the indicated location. (Guinnane, supra, 209 Cal.App.3d at p. 736.) As Division Four of this District recently stated:

[I]t is well established that section 26 administrative discretion is not cabined by specific criteria that may be set forth in city codes or ordinances. Instead, that discretion is informed by public interest, encompassing anything impacting the public health, safety or general welfare. (Martin, supra, 135 Cal.App.4th at p. 407.)

Under the Citys Charter, the Board of Appeals has broad discretionary review powers. Section 4.106 of the Charter of the City and County of San Francisco (Charter section 4.106) authorizes the Board of Appeals to hear and determine appeals arising from the grant or denial of a permit, and to take the public interest into account in doing so. It states in relevant part:

The Board shall hear and determine appeals with respect to any person who has been denied a permit . . . or who believes that his or her interest or the public interest will be adversely affected by the grant [or] denial . . . of a . . . permit. (Charter, 4.106, subd. (b).)

Charter section 4.106, subdivision (d) states:

After hearing and necessary investigation, the Board may concur in the action of the department involved, or by the affirmative vote of four members (or if a vacancy exists, by a vote of three members) overrule the action of the Department.

Where the Board exercises its authority to modify or overrule the action of the department, the board shall state in summary its reasons in writing.

Thus, both the planning commission (under 26) and the board of permit appeals (under 3.651 of the city charter)[4] are authorized to exercise independent discretionary review of a building permit application, the final authority being reposed in the board. Further . . . such review is not confined to a determination whether the applicant has complied with the citys zoning ordinances and building codes. (Guinnane, supra, 209 Cal.App.3d at p. 740, fn. added.) The board generally enjoys complete power to hear and determine the entire controversy, [is] free to draw its own conclusions from the conflicting evidence before it and, in the exercise of its independent judgment in the matter, affirm or overrule . . . .  [Citations.] However, that power must be exercised within the bounds of all applicable city charter, ordinance and code sections, and any action on its part that exceeds these bounds is void. (City and County of San Francisco v. Board of Permit Appeals (1989) 207 Cal.App.3d 1099, 1104-1105.)

C. The Boards Ruling

Petitioners contend no substantial evidence supported the Boards finding that their project was a demolition or would result in the loss of affordable housing, either to Morales or the City at large. This is incorrect.

1. De Facto Demolition

The Commissions findings referred to the project as resulting in a de facto demolition. It is not completely clear whether the Commissions use of this phrase was intended to find that the project constituted a demolition as that term is defined under municipal law, rather than an alteration.[5] However, the record indicates that the Board reviewed the appeal with this in mind, as the Boards Vice President Sugaya stated at the November 2004 rehearing, I still believe that this is an illegal demolition and thats what were voting on. (Italics added.) Accordingly, we review the record to determine whether substantial evidence was presented to support the finding that the project was a demolition as that term is defined under municipal law. We conclude that such evidence was presented.

The Citys Building Code defines demolition for the purpose of determining whether an unlawful residential demolition has occurred. It is defined as the total tearing down or destruction of a building containing one or more residential units, or any alteration which destroys or removes . . . principal portions of an existing structure containing one or more residential units. (S.F. Building Code, 103.3.2.[6])

The term principal portion is defined as that construction which determines the shape and size of the building envelope (such as the exterior walls, roof and interior bearing elements), or that construction which alters two-thirds or more of the interior elements (such as walls, partitions, floors or ceilings). (S.F. Building Code, 103.3.2.)

Thus, under the City Building Code, a demolition includes an alteration which destroys or removes principal portions of an existing structure containing one or more residential units, which principal portions include a construction which determines the shape and size of the building envelope, including, but not limited to, exterior walls, roof, and interior bearing elements. Petitioners proposed project meets this definition of demolition. Petitioners plans, rather than being fairly modest as petitioners claim, indicated that the project would, among other things, replace the existing brick foundation, convert the first floor 750 square foot residential unit into an expanded two-car garage, renovate and expand the second floor rental unit occupied by Morales from 750 to 1,050 square feet, and add an entirely new third floor on top of the building, where a 1,050 square foot modern residential unit would be constructed. It can be reasonably concluded from these plans that both the shape and size of the building envelope would be significantly altered, and that principal portions of the building would be removed or destroyed (such as the second floor roof, a significant portion of the building envelope for the horizontal expansion of the first and second floors, the first floor residential unit, some portion of the first floor exterior for cars to enter the new garage, and the existing foundation).

Furthermore, there was substantial evidence that two-thirds or more of the interior gravity bearing walls would be removed by the project. A letter by Stuart Stoller, a senior associate at SGPA, an architecture and planning firm, was submitted to the Board,[7] in which Stoller disagreed with the estimate by Tehlirians own architect, Charles Ng, that less than 57% of the existing bearing walls would be removed in the proposed construction. Stoller opined, based on his review of petitioners existing wall diagram, that the diagram did not take into consideration certain specified aspects of the premises or address certain potential requirements which, if considered, could likely indicate that 33% or less of the existing wall structure will be retained. Stollers letter called into question whether or not two-thirds of the interior gravity load bearing walls would be removed in the course of the project.

A letter by licensed contractor Alan Klonsky was also submitted to the Board. Klonsky reviewed Mr. Moraless rental unit and certain unspecified project plans. He stated:

Although the project drawings are labeled as vertical and horizontal additions, in reality, the scope of work constitutes a demolition and the construction of a new building. At ground level, now occupied by the second unit, a garage is proposed along with the foundation and structural upgrades required by the construction of a 3-story building. Over the garage 2 floors of new construction will be built with an increase in the footprint of the building to current allowable lot coverage. The 2 new units will be significantly larger than the existing apartments. [] . . . [] This project will require the existing building to disappear as a new building takes its place. Any remnant of the original construction will be symbolic at best. It appears to me that proposed scope of [sic] far exceeds the definition of a remodel.

Based on this substantial evidence, the Board could reasonably conclude that the project, rather than calling for alterations as claimed by petitioners, was in fact (de facto) a demolition as that term is defined by the Citys Building Code. The plans called for significant changes to the shape and size of the building by the destruction or removal of significant principle portions of it. Klonskys views, while not discussing the Citys definition of demolition, confirmed these dramatic changes. The Board also could reasonably rely on Stollers letter to conclude that the project more likely than not would destroy two-thirds or more of the linear feet of gravity load bearing walls, which would also constitute a demolition as defined in the Citys Building Code.

Petitioners argue that we should disregard Stollers letter as soundly defective, amounting to merely speculation and unsubstantiated opinion, because Stollers qualifications are unclear, he examined only an existing wall diagram without showing how he could rely on it for his conclusions, and stated his conclusions in an unacceptably equivocal fashion (using such terms as could and likely).

Petitioners arguments lack merit. The Board could reasonably infer that a senior associate of an architecture and planning firm has the expertise to evaluate the materials Stoller reviewed and opine about them. Indeed, Ngs own qualifications appear to be less than what petitioners represent, i.e., a licensed architect.[8] The evidence also strongly suggests that Stoller and Ng relied on the same or a very similar document in stating their views of the proposed project, since Stoller refers to the Existing Wall Diagram submitted by the project sponsor and Ng refers to an existing walls diagram. Neither explains how he could rely on such a document for his conclusions.

As for the quality of Stollers opinion, his statements were not conclusory, and are a far cry from those discussed in the cases petitioners cite. (See Gentry v. City of Murrieta 1995) 36 Cal.App.4th 1359, 1421-1422 [expert found no effect on groundwater except for a possible exception, and relied on unspecified information]; Drouet v. Superior Court (2003) 31 Cal.4th 583, 598 [referring to a snippet of a Senate Committee analysis in discussing a statutes interpretation, merely identified as sufficiently tentative and equivocal to caution us against relying too heavily on [it]]; Citizen Action to Serve All Students v. Thornley (1990) 222 Cal.App.3d 748, 756 [referring to a conclusory comment regarding what might occur as speculative and not substantive evidence]; Keeton v. Workers Comp. Appeals Bd. (1979) 94 Cal.App.3d 307, 312, fn. 2 [merely referring to a conclusory doctors report].) Stoller identified specific areas of the structure and potential requirements that factor into his views, and listed five specific items of concern. He used the phrase could . . . indicate because he reached different conclusions depending on which of his stated items of concern are considered.[9] His use of terms such as likely or potential requirements to qualify his conclusions is hardly fatal in an expert opinion. They may go to the weight afforded to his opinion, but do not eliminate their merit altogether.

Petitioners also argue that Klonskys statement is an unsupported conclusion, especially because it is contrary to the Planning Departments informed determination. Nothing in his conclusion attempted to apply relevant building code standards governing remodel versus demolition. Petitioners miss the relevance of Klonskys statement, which is to support the conclusion that, practically speaking, the project demolishes the old building and places a new, significantly different one in its place, regardless of the Building Code definitions.

Petitioners also argue that we should rely on the Planning Department, which petitioners contend repeatedly found . . . the project not a demolition. The record does not support petitioners contention. The Planning Department stated in recommending that the Commission not take discretionary review: The Department of Building Inspection has made the determination that this project is an alteration, not a demolition. Therefore, the Planning Department has received the application as an alteration.

Regardless, we will not reweigh the evidence. The Board was entitled to rely on the substantial evidence that the Tehlirian project was a de facto demolition, even in the face of contrary evidence.

In their reply brief, petitioners also distinguish the Citys and Moraless reference to a de facto demolition from a de jure demolition, arguing that it constitutes an admission that there is no evidence of the latter, and that the Board acted without authority to reject a permit application for a mere de facto demolition. To the contrary, the City argues that the Project rose to the level of a demolition, and Morales, as he argued before the Board, contends that the de facto demolition constituted a demolition as the term is defined by the Citys Building Code. As we have already stated, Board Vice President Sugaya stated that the Board was considering whether this was an illegal demolition. In any event, there was substantial evidence that the project called for a demolition as that term is defined by the Citys Building Code.

2. Affordable Housing

The Board did not abuse its discretion in finding that petitioners project would eliminate affordable housing from the rental market.

Pursuant to state and municipal law, the Board may consider the need to retain affordable housing in deciding whether to grant or deny permits. [C]reating affordable housing for low and moderate income families is a legitimate state interest. (Home Builders Assn. v. City of Napa(2001) 90 Cal.App.4th 188, 195.) The assistance of moderate-income households with their housing needs is recognized in this state as a legitimate government purpose. (See, e.g., Gov. Code, 65583, subd. (c)(2) [local communities must set forth in housing elements of their general plan a program that will assist in the development of adequate housing to meet the needs of low- and moderate-income households(italics added)].) (Santa Monica Beach, Ltd. v. Superior Court (1990) 19 Cal.4th 952, 970-971.)

Municipal law requires the Board to consider the Citys supply of affordable housing in making its decisions. The Citys Planning Code section 101.1, subdivision (b)(3), states as a priority policy [t]hat the Citys supply of affordable housing be preserved and enhanced, and the Citys departments must comply with the Planning Codes provisions in issuing permits. (S.F. Planning Code,  175, subds. (a), (b).)

Furthermore, the Housing Element of the Citys General Plan emphasizes the importance of retaining affordable housing. Objective 2 of the Housing Element states:

The existing housing stock is the Citys major source of relatively affordable housing. It is very difficult to replace given the cost of new construction and the size of public budgets to support housing construction. Priority should be given to the retention of existing units as a primary means to provide affordable housing. (S.F. General Plan, Housing Element (adopted May 13, 2004) p. 145.)

Consistent with this emphasis on retaining affordable housing, Policy 2.1 of the Housing Element discourages the demolition of sound existing housing. It states:

Demolition of existing housing often results in the loss of lower-cost rental housing units. Even if the existing housing is replaced, the new units are generally more costly. Demolition often results in displacement of residents, causing personal hardship and relocation problems. [] . . . The City should continue to discourage the demolition of existing housing that is sound or can be rehabilitated, particularly where those units provide an affordable housing resource. (S.F. General Plan, Housing Element (adopted May 13, 2004) pp. 145-146.)

Also consistent with this emphasis, Implementation 2.1 of the Housing Element states, among other things, [t]he feasibility of expanding the demolition definition will continue to be evaluated in order to prevent the loss of housing classified as alterations. (S.F. General Plan, Housing Element, (adopted May 13, 2004) pp. 145-146.)

The Boards decision to uphold the denial of petitioners permit application took into account the impact of the project on the Citys stock of affordable housing. This was evidenced not only by its implicit adoption of the Commissions findings, but also by Board member Knoxs statement at the November 2004 rehearing:
Im sensitive to the fact that Mr. Morales would be displaced and ultimately what we are looking at is the denial of the permit, not the fairness of people being able to buy property and make changes. []  Or frankly, I dont think we are going to be able to address the lack of affordable housing in San Francisco in this Board, with this Board in any case, including this case. []  As long as there is the private ownership of property in a limited geographical area, housing is going to be really expensive in this town. []  But I am not inclined to grant the appeal and overturn the denial of the permit.

There was substantial evidence that the enlarged, renovated second floor rental unit would become unaffordable to persons in Moraless modest circumstances. Morales stated to the Board at the February 2004 hearing that he already was spending more than 30 percent of his income in rent, which was approximately $873 a month as of July 2005. Although petitioners eventually made certain promises to accommodate Moraless income limitations and displacement concerns as a part of their appeal to the Board,[10] Ara Tehlirian acknowledged to the Board during the February 2004 hearing that he was encouraging Morales to apply for government housing assistance and to consider taking on a roommate to pay for rent increases. Among other things, Tehlirian stated:

[I]d be taking a hit on the existing costs, but Ill take on that extra burden for a period of time, a reasonable period of time, until such time that the tenant can perhaps get in a roommate that can pay him several hundred dollars a month, or assistance where the government will try to assist him and by being able to get that assistance that will take some of the burden off of me.

Thus, whether or not petitioners accommodated Moraless concerns and limitations for a time, this testimony suggested that the new unit would no longer be affordable to a person in Moraless circumstances.

There was also substantial evidence that the project would remove the existing first floor, 750 square foot residential unit from the housing market as well, and that it, too, was of a more affordable nature than its replacement. Although it was apparently vacant throughout this dispute, its conversion into a parking garage would obviously eliminate it from use. Petitioners construction of a new third floor for the building, consisting of a modernized, 1,050 square foot residential unit, does not necessarily require its destruction. It is also reasonable to conclude that the modernized and enlarged third floor unit would be significantly more expensive if offered on the rental market.

Petitioners argue that the Boards affordable housing determination was improper for a number of reasons. First, they contend that there was no substantial evidence that affordable housing would be lost to Morales or the City at large. They point to their offer to limit capital improvement pass-throughs to Morales to $43 per month, and to the lack of evidence that the project would result in luxury amenities. We think these arguments avoid the obvious. The Board could reasonably conclude based on substantial evidence that the project would eliminate two residential rental units that are affordable to persons of modest circumstances, as we have discussed herein.

Petitioners also assert that Moraless unit in its present state is perhaps dangerous, and suggest that it may violate the implied warranty of habitability, and contain defects. Petitioners do not point to anything in the record so indicating, and there was substantial evidence to the contrary. Klonsky, the licensed contractor, reviewed Moraless living conditions and found he lived in a small Victorian building that appeared to suffer from deferred maintenance but was far from uninhabitable.

Petitioners argue further that neither the Board nor the Commission are qualified to determine what is affordable housing, and neither body has authority to prevent property owners from making moderate improvements to their property because doing so would affect the supply of affordable housing. They also insist that there were no standards or evidence of what constituted affordable housing, or that the project once it completed would not be affordable. These arguments presuppose that petitioners were entitled to approval of their permit application absent some definitive proof to the contrary. As we have already discussed, the Board has broad discretion in granting or denying permits. We see no reason under the circumstances of this case to question the Boards decision that the project would eliminate affordable housing because the term was not precisely defined.

In short, given our deferential standard of review, the Citys stated priority of retaining affordable housing and discouraging its demolition, and the substantial evidence reviewed herein,[11] we cannot conclude that the Board abused its discretion when it denied petitioners appeal because, as stated in the Commissions findings, the project would result in the de facto loss of affordable housing by improving and expanding the existing units that are currently accessible to lower-income tenants because of their size and relative lack of amenities.

D. The Board Did Not Improperly Consider Tenancy-Related Issues

Petitioners argue that the Boards consideration of the impact of the project on the Citys stock of affordable housing was somehow precluded by the Board of Supervisors creation of the Rent Stabilization and Arbitration Board (Rent Board) and enactment of related laws establishing certain rights and obligations between landlords and tenants (Rent Ordinance), and was beyond the Boards authority under San Francisco Business and Tax Regulations Code, article I, section 26. Petitioners contend that the Board improperly considered tenancy-related issues, and that allowing the Board to base its decision on considerations regarding affordable housing would undermine the creation of the Rent Ordinance and usurp the jurisdiction of the Rent Board. This argument also lacks merit.

As we have already discussed, the Board may, pursuant to Charter section 4.106, subdivision (b) of the Charter consider the public interest in its review of a permit. Pursuant to San Francisco Business and Tax Regulations Code, article I, section 26, it may review permits with regard to public health, safety, and general welfare. (Martin, supra, 135 Cal.App.4th at p. 407.) Given these provisions and the Citys stated priorities regarding affordable housing, the Board was entitled to consider the projects impact on the Citys affordable housing stock in its deliberations.

Petitioners argue that the Board acted similarly to the Board in City and County of San Francisco v. Board of Permit Appeals, supra, 207 Cal.App.3d 1099, an opinion issued by this court. We disagree. In that case, the court held that the board acted in excess of its jurisdiction when it authorized a third unit for a property zoned for single family use. (Id. at p. 1102.) The court concluded that the board had effectively rezoned the property, a legislative act exclusively within the power of the board of supervisors. (Id. at p. 1110.) No such legislating occurred here. As we have discussed, the Board acted within its authority to review permits, and to consider such things as the public health, safety, and general welfare, and the Citys priorities regarding its affordable housing stock, in doing so.

Furthermore, the Board did not decide any issues covered by the Rent Ordinance. The Board did consider the possible impact of the project on Morales, and encouraged negotiations between petitioner and Morales to mitigate that impact. The municipal ordinances allow for the Boards consideration of the projects impact on Morales. (Charter, 4.106, subd. (b) [The Board shall hear and determine appeals with respect to any person who has been denied a permit . . . or who believes that his or her interest . . . will be adversely affected by the grant [or] denial . . . of a . . . permit]; S.F. Bus. & Tax Regs. Code, art. I, 26 [in the granting or denying of any permit . . . the granting . . . power may take into consideration the effect of the proposed business or calling upon surrounding property and upon its residents, and inhabitants thereof].) The Board inevitably considered his tenant circumstances in assessing the projects impact on him, given his status as petitioners tenant. However, the Board did not decide any issues covered by the Rent Board or the Rent Ordinance. For example, it made no determinations related to Moraless displacement or temporary eviction, his relocation benefits, the amount of rent to be paid should the project be completed, or the amount of capital improvement pass-through that should be allowed.[12]

E. Petitioners Ellis Act Notice

Petitioners represent that, while this appeal was pending, they invoked their Ellis Act rights pursuant to Government Code section 7060 et seq. and the Citys Rent Ordinance, San Francisco Administrative Code section 37.9A, and gave notice to terminate Moraless tenancy and withdraw his unit from the rental market. They contend that, as a result, a remand should result in a determination that the building no longer contains any rental housing, thus precluding any finding that this project will affect the Citys affordable housing stock, and submit that a writ of administrative mandate should issue compelling the [Board] to make legally relevant findings, which if done, will lead to permit issuance.

The courts review the Boards decision pursuant to Code of Civil Procedure, section 1094.5, based upon the record before the Board at the time it made its decision, with limited exceptions. (Code Civ. Proc., 1094.5, subd. (e); Eureka Teachers Assn. v. Board of Education (1988) 199 Cal.App.3d 353, 366-367.) We see no reason to consider petitioners actions and contentions regarding the Ellis Act, other than to determine whether or not this appeal is moot in light of them. We conclude that it is not, as the record indicates that petitioners have extended the date of withdrawal of the unit to April 18, 2007, as indicated by petitioners May 17, 2006 letter, of which we have taken judicial notice at Moraless request. (See DeLaura v. Beckett (2006) 137 Cal.App.4th 542, 547, fn. 4 [determining the merits of a dispute after Ellis Act notice had been given because the notice could still be rescinded].)

The City also argues that we should determine that petitioners Ellis Act notice cannot effect the Boards decision because [i]t does not necessarily alter the propertys character as affordable housing or change the proposed Project from a demolition to an alteration. These issues also were not before the Board and, therefore, we do not consider them.

F.Other Arguments by Petitioners

Petitioners make a number of additional arguments, none of which are persuasive. Petitioners repeatedly allege improprieties that have no support in the record, such as that Morales called in political favors, the Commission and Board made findings that were utterly pretextual and unfettered whim, and petitioners were singled . . . out solely for political reasons. We disregard these unsupported contentions.

Petitioners also argue that the Boards action effectively bans property owners from making any improvements to their buildings, stating: If the Citys position really is to keep housing affordable by encouraging dilapidation and preventing improvements, this court should order the City to cease issuing residential improvement permits of any kind to anyone. In fact, it should order that all permits already issued be rescinded and that all improvements ever made to any property be removed. That will undoubtedly not only prevent housing from becoming more expensive, it will ensure that it becomes truly affordable.

This hyperbole cannot obscure the substantial evidence of the dramatic overhaul called for in the petitioners proposed project. Nothing in the record indicates that the Board barred petitioners from making any improvements to their property.

We also disagree with petitioners assertions in their reply brief that the Boards action was irrational and arbitrary and against the sound discretion standard of San Francisco Business and Tax Regulations Code, article I, section 26. Petitioners overbroad, scattershot arguments, such as their claim that the Boards action was in conflict with statutory provisions regarding the improvement and rehabilitation of property, and their contention that the City has telegraphed that it will continue to retaliate against them and never approve any permit they seek, are unpersuasive. Petitioners repeatedly ignore the substantial evidence discussed herein that their project was a demolition and would eliminate affordable housing from the rental market, and the Boards broad discretion to act consistent with the Citys interest in discouraging such demolitions and preserving such housing.

DISPOSITION

The superior courts denial of petitioners petition for writ of administrative mandate is affirmed. Respondent and real party in interest are awarded costs.

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Lambden, J.

We concur:

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Kline, P.J.

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Haerle, J.

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[1] The record indicates that ABT, LLC became the owner of the subject real property in 2004. To avoid unnecessary confusion, we refer to the actions of petitioners throughout without distinguishing between appellants.

[2] All governmental entities referred to herein are part of the City and County of San Francisco, unless otherwise indicated.

[3] We also take judicial notice of the Citys Charter pursuant to Evidence Code section 451, subdivision (a), and of the municipal laws discussed herein pursuant to Evidence Code sections 452, subdivision (b) and 459.

[4] Section 3.651 of the City Charter dealt with the Boards authority prior to Charter section 4.106, and language from that provision similar to that found in Charter section 4.106 was relied upon by the Guinnane court. (Guinnane, supra, 209 Cal.App.3d at p. 739.)

[5] A zoning administrator summarizing the Commissions finding to the Board at its February 2004 hearing stated that [t]he primary basis of the [Commissions] denial was that as a defacto demolition, this project resulted in the loss of affordable housing, and the destruction of sound housing. He later stated: I did want to talk a little bit about the defacto demolition. While thats not an official term or part of the demolition policy, I believe the [Commissions] issue here was that by extending the building to the rear, removing the front faade and extending the front wall forward, totally remodeling the interior and removing most of the walls, it is not a technical demolition, but it was substantially the same effect from a design point of view of being a demolition.

[6] The parties refer to the Citys Building Code section 103.3 or 103.3.1 in their briefs for these same provisions. We refer to section 103.3.2, as the relevant provisions are presently denominated.

[7] The parties do not dispute that hearsay evidence may be considered in such a municipal administrative proceeding. (See Mohilief v. Janovici (1996) 51 Cal.App.4th 267, 294-295 [unsworn statements and letters in the case file may be considered as evidence in municipal nuisance abatement proceedings].)

[8] While Ng states in his letter that as project engineer and architect of record, in our professional opinion, the subject building permit application is an alteration and not a demolition (italics added), he merely identifies himself as a P.E. and principal of the BEST Design & Construction Company (the letterhead also identifies him as a CLC); another individual, not a signatory to the letter, is identified as an architect on the letterhead.

[9] Stoller stated, I believe that taking into consideration items 1 through 3 above, could indicate that only 38% of the existing gravity load wall is being retained. Including items 4 & 5 into consideration, could likely indicate that 33% or less of the existing wall structure will be retained.

[10] These were stated by petitioners representative Bret Gladstone at the November 2004 rehearing.

[11] We find sufficient substantial evidence without needing to determine whether or not the Board was entitled to rely on statements from the public or the Commission regarding the projects impact on affordable housing, a matter referred to by the superior court and debated between the parties in their appellate papers.

[12] The Commissions findings recognized that Rent Board issues were beyond its purview, stating, Any conditions of approval attached to the building permit relating to rental rates, relocation, tenants right of return, and other arrangements made between the landlord and tenant would not be enforceable by the Planning Commission.