Rent board advances completeness-check plan for MNOI applications: affidavit, thresholds tied to CPI and rental-history cards proposed

Kristen, a Rent Board member, and Matt Lacks, a board member working on procedures, presented a draft completeness‑check for MNOI (net operating income) applications at a February workshop and asked the board for policy direction on affidavit language, documentation thresholds and workflow changes for staff review.

The nut of the discussion: board members and staff want to reduce incomplete or inconsistent submissions and speed case processing by clarifying what documentation is required up front. The proposals include adding an applicant affidavit, requiring clearer year‑by‑year historical NOI figures, using a percentage threshold tied to CPI to trigger required receipts, and providing a simple “rental history card” to show base rent, allowed increases and banked increases.

Kristen said the completeness-check is intended “to create a process where applicants using the MNOI form can be more complete, earlier on in their application,” so the board can spend less time requesting missing documents and more time on substantive hearings. The draft includes an affidavit (language drawn from external guidance) placed near the signature line that would make applicants affirm the accuracy of submitted data.

Board discussion focused on three linked issues: thresholds for when documentary proof is required, the statutory base year to use in MNOI calculations, and how much of the tax/expense detail to ask for routinely.

On thresholds, several board members supported tying documentary triggers to CPI-based percentage changes rather than an absolute dollar amount. As one board member put it, a percentage threshold “scales” with inflationary context and avoids repeatedly changing a fixed dollar cutoff. Matt Walker (presenter) and others suggested the registration form already calculates total CPI from the base year and that the board could use that same percentage to identify expense categories that rose faster than the CPI and therefore warrant supporting documentation.

Legal counsel Aga cautioned the board about changing the ordinance’s defined base year. “I tend to agree that I don't think you can unilaterally change the base year,” she told the board, noting the ordinance presumes a 2019 pre‑rent‑control base for determining a fair return but that the board can adopt rules about how to handle rebuttals to that presumption. The board therefore discussed two related approaches: (1) keep the statutory base year (2019) as the presumption while drafting rules that clarify when an alternate base year or additional evidence is allowable; or (2) rely on CPI‑based thresholds to minimize the number of cases requiring full MNOI rebuttal analyses.

Board members and staff discussed additional practical measures: (a) require applicants to provide historical NOI (revenue and expenses) for all years between the base year and current year (the ordinance already lists historical NOI among the acceptable documentation); (b) ask for a clear monthly income-by-unit table for base and current years so reviewers can verify gross rental income; (c) introduce a rental-history card sent to registrants at registration time showing banked increases and the calculated maximum allowable increase for the next year; and (d) where a property reports anomalous numbers (for example, large $0 counts for covered units or reported increases above the cap), prioritize those properties for Licensing & Housing Safety audit before a board hearing.

Several board members said that requiring certain receipts is appropriate for categories that commonly vary and that can be verified independently (property tax bills, utility invoices, contracts for professional services). Others urged caution about demanding every receipt for small-dollar items and recommended a threshold that triggers documentation for the categories with greatest impact.

On the question of whether the board could treat the affidavit as a substitute for receipts, members and counsel rejected that approach: the affidavit would reinforce the applicant’s burden of proof and allow stronger grounds to deny an application where the form and supporting evidence materially conflict, but it would not replace the need for documentary evidence in high‑impact categories.

Counsel advised that the board can and should work on rule text and an instruction set that make the form look and act like a rule rather than an optional worksheet; Aga offered to help draft language clarifying that the board retains discretion to request additional evidence beyond the form’s baseline and that the 2019 presumption can be rebutted only with substantial documentation.

Board directions and next steps agreed at the workshop included: staff and board members will (1) refine the draft affidavit and the MNOI workbook, (2) develop specific CPI‑linked threshold options for the board to consider, (3) crosswalk form categories with IRS/tax categories to simplify applicant preparation, and (4) return a revised draft rule and form for further review. Counsel indicated she will assist with drafting rule language to ensure the form’s instruction pages make clear which fields are required and which documentary triggers will apply.

No formal vote was taken at the workshop. The board signaled broad support for the completeness‑check approach, asked staff to produce a revised draft with proposed numeric threshold options and suggested sample language that could be used to notify registrants to preserve historical records going forward.

Ending: Staff will circulate a revised draft of the completeness-check form and proposed threshold language; counsel will help craft the rule text clarifying the affidavit and the board’s authority to require additional documentation when applicants’ submissions appear inconsistent with supporting documents.