The Board of Supervisors last night passed some new legislation, originally proposed by David Campos, that's going to make evicting a tenant under the Ellis Act way more expensive than it previously was. Reacting to the wave of Ellis Act evictions that have happened in the last couple of years as landlords saw dollar signs in this crazy real estate market, Campos had earlier declared that the mandated $5,200 relocation payouts to tenants were not nearly high enough. The new legislation raises that number well into five figures, requiring landlords to pay the difference between a tenant’s current rent and what it would cost to rent a similar, market-rate apartment when evicting them using the Ellis Act.
As CBS reports, the city controller’s office has put that number at $44,800, by way of example, for a person who was paying $909 a month for a two-bedroom apartment in the Mission.
This is far higher than the originally proposed doubling of the relocation fee to $10,000, marking a victory for tenants' activists and a serious blow to real estate folk and landlords, who now face bigger obstacles in converting rental buildings to TICs and condos. They did, however, at the urging of Supervisors London Breed and Scott Wiener, include allowances for hardship exemptions, for elderly landlords with few liquid assets, for instance.
The new ordinance was passed by the Supervisors in a 9-2 vote and will still require a second vote as well as a sign-off by Mayor Lee, who has not said whether he supports it or not. Lee was, at least verbally, on board with Campos back in November.
The Ellis Act is enshrined in state law, and it was originally intended to allow landlords to "go out of business" by selling a rental property for condo conversion. It disallows the eviction of tenants for the purposes of raising rents, but it has been abused by real estate speculators, especially in San Francisco, who buy out longtime landlords, evict the tenants, and flip the buildings for profit as TICs. As the Chron reports, State Senator Mark Leno has a bill that's moving forward in the legislature that would further curtail Ellis Act abusers by requiring landlords to own a building for at least five years before evicting anyone.