When the Ellis Act was passed in 1985, its intent was to allow property owners to get out of the rental business by evicting tenants and selling the property. Civic leaders, activists and legislators say the law has been taken advantage of by what they call real estate “speculators.”
“The original spirit of California’s Ellis Act was to allow legitimate landlords a way out of the rental business,” Leno said in a statement, “but in recent years speculators have been buying up properties in San Francisco with no intention to become landlords but to instead use a loophole in the Ellis Act to evict longtime residents just to turn a profit.”
“Many of these renters are seniors, disabled people and low-income families with deep roots in their communities and no other local affordable-housing options available to them. Our bill gives San Francisco an opportunity to stop the bleeding and save the unique fabric of our city.”
Leno’s Senate Bill 1439, which was introduced Friday and would only impact The City, has several provisions that not only aim to close old loopholes, but also attempt to prevent new ones from being created:
- Landlords who want to invoke the Ellis Act would have to have owned the building for no fewer than five years.
- All previous owners of the property would have to be disclosed in a building where an Ellis Act eviction is taking place.
- Current landlords would be prohibited from conspiring to get around the law with prospective buyers.
Under the law, San Francisco would have the option to impose these new requirements but would not be required to do so.
Mayor Ed Lee, who had promised he would work to get legislation passed to stanch Ellis Act evictions, is a sponsor of the bill.
“We have some of the best tenant protections in the country, but unchecked real estate speculation threatens too many of our residents,” Lee said in a statement. “These speculators are turning a quick profit at the expense of longtime tenants and do nothing to add needed housing in our city. These are not the landlords the Ellis Act was designed to help, and this legislation gives San Francisco additional tools needed to protect valuable housing and prevent further Ellis Act speculator evictions, which has already displaced working families and longtime San Franciscans.”
Opponents of changes to the Ellis Act put up a new website last week called Protect the Ellis Act.
“We launched it last week knowing full well the legislative deadline is [Friday],” said Debra Carlton, a spokeswoman for the California Apartment Association.
The group wanted to give a voice to landlords, she said.
Landlords, according to Carlton, tell her group, “In some rent-controlled cities, it’s the only way we have to say enough is enough” when they are not able to make money off their investments.
Leno said the bill needs a simple majority to pass in the Legislature. If it does pass both the Assembly and Senate, it could go before Gov. Jerry Brown by September. If signed, it would take effect Jan. 1.
Meanwhile on Friday, Assemblyman Tom Ammiano, D-San Francisco, introduced his own bill targeting the Ellis Act. Assembly Bill 2405 would, among other things, allow municipalities to put a moratorium on Ellis Act evictions if local housing needs were not being met. Ammiano’s bill would apply statewide.
Ellis Act’s impact in S.F.
113: Properties where Ellis Act notices were served from 2012 to 2013
32: Landlords who invoked the Ellis Act within two years of purchasing rental units
16: Landlords who filed an Ellis Act eviction the same year as purchase
8: Landlords who filed an Ellis Act eviction within three months
6.6%: Percentage of all evictions from 2012 to 2013 where the Ellis Act was used to oust renters
Sources: San Francisco Rent Board, Assessor-Recorder’s Office