Campos Wants Owners to Subsidize Evicted Tenants

Chart by Dorothy Atkins

Chart by Dorothy Atkins

The San Francisco Chronicle reports today that District 9 Supervisor David Campos will propose Tuesday that owners who evict tenants under the Ellis Act subsidize their rent for two years. Under the Ellis Act owners evict all of the tenants in a building and then often sell the building.

The proposal would impact evictions under the Ellis Act, a state law that allows property owners to kick out tenants if they want to take a building off the rental market.

Between March 2012 and February 2013, 116 households in San Francisco were evicted using the Ellis Act, a practice tenants rights groups say is being used by real estate speculators to clear buildings of mostly low-income families and residents so they can make more money when they sell those units.

“The main objective is to recognize that while landlords have the right under the Ellis Act to evict people, jurisdictions like San Francisco have not only a right but an obligation to mitigate the impacts of those evictions,” Campos said. “This is the best way to allow people evicted to stay in San Francisco.”

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13 Comments

  1. John

    Looks unconstitutional on the fact of it. Cities are not allowed to meddle with an owner’s ability to exit the rental business and so slapping what is effectively an “application fee” on the filing of an Ellis eviction looks like a fairly blatant violation of state law.

    This would also lead to endless debates about what a reasonable alternative would be to the home being lost. If you have a subsidized home in nob Hill and you are Ellis’ed, it’s not clear to me that you should be able to demand to stay in Nob Hill.

    Why doesn’t Campos invest effort into supporting the provision of rental homes instead of trying to attack those who provide them? All this will achieve is further deter a property owner from offering a unit up for rental, out of the fear of never getting it back again.

    AirBnB looks better and better in comparison.

  2. nutrisystem

    Thank David Campos for a step in the right direction.

    It’s a small step, but perhaps all that can be accomplished within the current Board of Supervisors.

    The enemies of working people will now have to expose themselves by standing up to oppose this proposal.

    • John

      How does providing home ownership opportunities for working people make someone an enemy of working people?

      • nutrisystem

        Million dollar condos are not “ownership opportunities” for working people.

        They are debt-burden opportunities for tech industry drones.

        • John

          Ellis evictions do not create million dollar condos. They create half million dollar TICs which are the most affordable component of SF’s owner occupied housing stock.

          TIC formations create affordable homes that are secure and safe from evictions.

          • TICs involve more difficult loans and a 20% downpayment, so unfortunately they are just as challenging to buy and not affordable. Also there are very few TICs for sale these days presumably because they are a bad deal for the seller.

          • John

            TIC’s aren’t ideal but they are becoming easier to manage all the time, just like co-ops work well in NYC. That said, I agree it would be better that they eventually convert to condos.

            If there aren’t many TIC’s on offer for sale right now, that is surely evidence that they are popular and not that people don’t want them.

  3. Frank

    If this proposal goes forward, there will be a stampede of Ellis evictions before it becomes law. And then, the courts will likely just strike it down.

    • John

      True, Frank, and in fact Ellis evictions accelerated this past summer when the short-sighted Supervisors made condo conversion more difficult.

      More generally, everything that is done to make landlording a more onerous and less profitable activity deters the business, effectively reducing the number of rental units available, increasing rents and evictions.

      After 35 years of micro-management, the rental property crisis in SF is worse than ever, and all they can do is more rearranging of the deckchairs on the Titanic. People like Campos never learn that they are the problem, not the solution.

      • Market Forces

        I broadly agree with your comments on this site, but have to ask the logic behind this last statement.

        How does an increase in landlording difficulty reduce the number of rental units available?

        My thought is that these newly burdened landlords simple sell the property and the resulting increase in supply lowers prices, thus allowing for easier entry into homeownership by new owner-occupiers.

        I would believe in the reduce rentals scenario only if the landlords keep the home off the market, however find this unlikely as the increased costs of landlording lowers ROI and thus the money will find more efficient means of return (sell the home for a lowered value to an owner-occupier and put the money into bitcoin, or whatever).

        No?

  4. That chart would be a lot more meaningful if it had more than two data points. Algebra 1 anyone?

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