Photo by Brant Ward, The Chronicle

The Board of Supervisors approved a proposal Tuesday by District Supervisor David Campos to require landlords who use the Ellis Act to evict tenants to “pay the difference between the tenant’s current rent and what they would have to pay for a similar apartment for two years,” reports the SF Chronicle. 

This follows last week’s vote to legalize some 30,000 to 50,000 landlord units and a vote in Sacramento on Tuesday that moves Ellis Act reform out of committee. The latter legislation, proposed by Senator Mark Leno, would prohibit landlords from using the 1985 Ellis Act until they own a property for at least five years. The act was designed to let long-term landlords exit the rental business, but reformers argue that it is now used by speculators.

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  1. This is just a good step in the right direction.

    It will give tenants a little more reassurance that the Ellis Act evictions might not make financial sense to the speculator landlords.

    Next step is to make SF exempt from the Ellis Act altogether. Coming soon.

  2. Congrats kids! Any of you that brought a TIC in the mission in the last few years, well you can count on more appreciation! This, and the condo ban last year are some great tailwinds for you budding real estate investment. Touché.

    1. Federal and state law, FURA and CURA have detailed procedures for determining comps and calculating compensation. If they modeled this on FURA/CURA like I suggested last year, then they should have a legally defensible process in place.

  3. This law is based on well established state and federal relocation asssistance law requiring private entitles to pay significant relocation compensation to those displaced due to any project that receives state or federal dollars.

    1. There is no receipt of federal or state dollars in an Ellis eviction, so that’s apples and oranges.

      If the government takes your home because they want to demolish it and build a new freeway then sure, you get compensation, because that is a taking.

      An Ellis eviction is not a government taking, and so the situation is completely different. In fact, Ellis upholds property rights and prevents a taking by the government.

      It’s the exact opposite of what you describe.

      1. We gave you a chance to overcome your idiocy but clearly your idiocy has won. Clearly as FURA/CURA does not discourage public projects and has held up to legal challenge, Campos’ legislation will likely not discourage Ellis Act evictions.

        1. Your analogy is false because an Ellis eviction isn’t a taking nor the result of eminent domain nor the result of any government action.

          Calling anyone who disagrees with you an “idiot” won’t win you many converts.

          1. We’ve given you a chance to overcome your idiocy but clearly your idiocy has won. The CURA/FURA does not require eminent domain to come into play. Any project that involves government funding is required to adhere to those laws. Since CURA/FURA does not discourage government projects, it can reasonably be concluded that it would not discourage Ellis Act evictions. Of course the courts will have the final say.

          2. An Ellis Act does not involve any kind of taking, nor does it require any federal or state funds. It’s not a government action at all.

            My argument does not depend on eminent domain. I just gave that as one example.

          3. No, my purpose is purely educational. I’m trying to get you to see why your logic is flawed.

            If your legal argument were correct then we would not even need a local law for relo payments. Anyone Ellised could simply sue for the amounts you cite, claiming that it is somehow a government action.

            The fact that, to my knowledge, no lawyer has ever wanted to mount such an argument makes a compelling case for your assumptions to be false.

            You are right about one thing though. A court will decide if the windfall relo payments constitute a taking or a violation of Ellis.

          4. There are relocation programs in place for Ellis evictees. This merely moves that program towards conformance with existing state and federal relocation assistance schedules.

            There is no tort basis for this that is why localities have had to legislate a remedy.

  4. As usual, this will create the “lottery effect” that we have come to love in this town when it comes to what masquerades as a housing policy.

    This is good news for the odd tenant who will now get a windfall payoff, assuming that can afford the lawyer he will need to argue the rent differential – itself a very murky and vague concept.

    And good news for the landlords who are lucky enough, or shrewd enough, to get good turnover from their units by fair means and foul.

    It’s bad news for any landlord who has delayed Ellising because he felt bad about it or cared for his tenants, and who now finds that he cannot afford to exit his business.

    And it’s bad news for any tenant looking for a rental home because every new tweak to the law like this hammers another nail into the viability of offering rental housing in this city.

    Meanwhile, new loopholes will appear. Buildings that changed hands more than five eyars ago will become more valuable than buildings that just sold. Where is the logic in that?

    Owners will sell, then Ellis, rather than just sell, accelerating the rate of Ellis evictions just like the condo ban last summer did.

    Purchases will be made “subject to Ellis”, piggybacking on the former owner’s ability to Ellis.

    And we’ll see more payoffs, more fake remodels, more “accidents” that require a building to be “temporarily” vacated, and so on.

    At some point this city will wake up and realize that the key to a vibrant rental sector is having motivated landlords willing to risk their capital to provide homes.

    1. This will end up in court as taking of property. The tighter they squeeze the more slips through their hands.

      1. Yes, I suspect so. The Ellis Act contains specific language that limits the ability of municipalities to control and prevent Ellis evictions.

        This is entirely reasonable given that the intent of the Ellis Act was to control such municipalities from excessive interference with basic, inviolate constitutional rights and protections, specifically property rights as here.

        So some baseline relo expenses are considered allowable. But having far higher relo for an Ellis eviction than for other no-fault evictions seems like a stretch and insubordinate to the intent of a state law. It’s essentially a “fee” or “fine” on any Ellis eviction.

        You are correct that, in the end, the city cannot endlessly micro-manage housing by passing ever more strict laws. The city should either back off and instead provide incentives to landlords. Or go the whole hog and buy buildings specifically to let at a subsidized rent at the taxpayers’ expense, assuming that the voters approve it.

        Outsourcing welfare to business folks was doomed from the start, not least because the average business person is a lot smarter than the average bureaucrat.