Ellis Act Marginalizes San Francisco Residents

On November 14th San Francisco City Hall heard testimonies from dozens of San Franciscans who were evicted from their homes during a hearing on the Ellis Act. Since the implementation of the the Ellis Act over twenty years ago, more than four thousand people have faced evictions. My friend received news in September that he had to vacate his studio apartment, he is one of many renters along the Market and 6th Street corridor evicted on the premise of the Ellis Act. His building on Market is one of the last remaining remnants of affordable housing in the city, particularly for low-income residents. Unfortunately, for many San Franciscans this story is becoming less uncommon. So what exactly is the Ellis Act, and why has it been so controversial?

The Ellis Act essentially undermines rent control and condominium laws in California by allowing property owners a loophole in evicting renters. The state act was created to supersede a 1984 California Supreme Court decision called Nash v. City of Santa Monica. The decision made it illegal for property owners to evict tenants on the basis of retirement without a permit by the city. The decision stated that permits would only be given if the property owner could not, “make a reasonable return on his or her investment.” The Ellis Act grants landlords the unconditional right to “go out of business” with only minor provisions. In San Francisco, the property owner is required to give an average renter a minimum of $5,105 dollars in relocation benefits and a maximum of $15,315 (this is the highest relocation fee in the state). In addition, the property owner must provide all renters proper notice and cannot lease out the property again for an extended amount of time. However, in a city where the median rent for a two-bedroom apartment is $3,800 a month and renters are expected to pay first and last month rent along with a deposit, $5,000 is not a fair trade-off for most low-income residents.

Instead of retiring altogether, some landlords are simply enacting the Ellis Act to kick out their current tenants and rent to individuals willing to pay a higher rate, or turn their buildings into tenancies-in-common (TIC) to make a quick profit. The San Francisco Tenants Right Union, even warns of some property owners sending “advisories” notices to tenants of a possible Ellis Eviction to bluff tenants into moving out– or simply buying them out. Such abuses of the Ellis Act have occurred, resulting in less affordable housing and the exodus of low-income residents in favor of wealthier ones. The two areas that have been affected the most by Ellis Acts evictions are the Mission and Castro district, where many are long-term elderly residents. During the November City Hall meeting, budget and legislative analyst Fred Brousseau presented a study that showed a nearly 145% increase in Ellis Act evictions in the last twelve months alone.

Currently, two policies in the works aim to restrict the surge in Ellis Act evictions. One, set forth by Ed Lee’s office, makes evictions more expensive in order to encourage landlords from pursuing them. Lee plans to raise the costs of permits and limit the sale and resale of buildings after an Ellis Act eviction. The second proposal by Supervisor David Campos would bar property owners from raising rent post-eviction and a moratorium on evictions. Campos also suggested an increase in the relocation fees for current tenants and tracking buyouts along with formal Ellis evictions. Campos’ idea is particularly compelling as it addresses the rising costs for renters in San Francisco.

While both city proposals have the potential for change, all past modifications to the enactment have failed. Proponents of the Ellis Act say it allows property owners an option to remove tenants who have lived in the same unit long-term and have now become an economic burden. However, the Nash v. City of Santa Monica decision already protected property owners’ investments. The idea that property owners can evict long-term renters to make a greater profit is problematic, and a renter should not be at fault for remaining in a unit. Property owners enter into a contract willingly with the renter when they move in, and new owners know they are legally responsible for renters upon sale. It is important for us to not only know our rights as renters but also protect long-term residents of the city, by supporting legislation that will create more inclusive housing for San Francisco citizens.

Bryce Chiodo is a senior international studies major.

8 thoughts on “Ellis Act Marginalizes San Francisco Residents

  1. The Ellis Act is not a loophole. It is State Law. When someone rents private property in San Francisco, they are not entitled to live in the unit for the rest of their lives, particularly at a discount.

  2. Fact Of Life, you failed to understand the issues raised above. 7060.2.(b) of the Ellis Act specifically states that if the Ellis Act is invoked to evict a tenant, and the unit that unit is offered for rent again withing two (2) years, the “owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages.” In other words, the Act is explicitly *NOT* meant to allow landlord to kick out long-term tenant in rent controlled units so that they can re-rent the unit at current market rates. However, this is what’s happening.

  3. The vast majority of properties where the owner exits the rental business via the Ellis Act are not re-rented. They become owner occupied.

  4. Fact Of Life, that’s not a true statement unless you have data to support it in San Francisco, which is the place being discussed. The fact of the matter is, most units in SF are being converted into TIC’s, but that is also dependent on a lottery system.

  5. All new rent control is BANNED in California. The Ellis act does not undermine rent control, rent control undermines the Ellis act.

  6. Landlords have the right to do as they please with their property. Ellis Act evictions support the rule of law. Tenants aren’t being penalized in any way. They are free to live anywhere else they can afford to live. There is no such thing as an unrestricted right to live on someone else’s private property. Progressive activists sound like conservatives by mindlessly opposing the good things gentrification does for San Francisco: http://alfidicapitalblog.blogspot.com/2013/11/san-franciscos-anti-progress-factions.html

  7. The vast majority do not become owner occupied by the original owner of the building (the previous landlords). Some landlords threaten Ellis Act evictions to get long-term rents out of units to rent at a higher price and many do evictions to sell and create tenancies-in-common.

    Ellis Act became a state law to create a loophole in a decision already made about retiring from the rental business, a law can still be a loophole. There is a huge ethical issue that must be considered when evicting long-term residents who won’t be able to find homes. elsewhere Just because its your “private” property doesnt mean it’s not morally questionable to evict someone. Most landlords are still making profits even with having a few units being occupied.

    Gentrification can be good if the ethical issues surrounding it are being addressed and properly cared for, this is not happening in SF. To say tenants aren’t being penalized or can live anywhere that is affordable is ignorant. When you’re a low-income family, packing up and “leaving” for a more affordable neighborhood or city is not easy or inexpensive. The city (and many residents) have done very little to create inclusive living spaces for those who are lower-income. Major infrastructure problems, lack of affordable housing are just a few issues. Ellis evictions are creating a greater burden for those who are not “rich enough” to live in the city now.

  8. The Board of Supervisors would prefer that SF residents remain tenants, and voters in their pockets, rather than property owners in their own right. There are people in San Francisco who spend little time in their apartments, they may even live in another County. They pay very little in rent and sometimes they even go about buying a rental building themselves in another County, where rent control does not exist. And you can believe that while they are all gung ho about rent control in San Francisco, they are dead set against it where they own their rental property.

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