It may not be dead yet, but Senator Mark Leno's bill in the California legislature, which would have required building owners to own a building for at least five years before invoking the Ellis Act, failed by a margin of one vote on Wednesday. Though the bill had plenty of high-profile support behind it, the powerful California Association of Realtors and the Chamber of Commerce were against it, and helped gather votes to kill it particularly from conservative districts in Southern California.
The Bay Area Council, Twitter, and Expedia had all voiced support for the bill, which mirrors local efforts by Supervisor David Campos to curtail the real estate speculation that has caused a dramatic uptick in the number of Ellis Act evictions over the last two years.
In their opposition letter to the bill, the Chamber of Commerce tried to create some false drama around the idea of small business owners being forced "to stay in business against his or her will, even when they are losing money." But of course we know that this is probably rarely the case, especially when landlords have owned a building less than five years. The trouble in terms of drumming up statewide support is that nowhere in the state has the Ellis Act been abused the way it has in the white-hot market of San Francisco, where rental units are regularly being flipped as TICs. (And nowhere else has the law, which was intended to allow mom-and-pop landlords to "go out of business" and sell off rental property as condos, been as controversial as it has here since it was enacted in 1986.)
The AP quoted one state senator from Pomona who voted against the bill, Sen. Norma Torres, who had little sympathy for San Francisco's current housing woes. She cited what was likely the realtors' argument that it was the city's own fault for not building enough affordable housing, and "asking private owners to foot the bill for something that they have neglected is inappropriate."
There still seems to be a small chance that Leno can flip one of the senators' votes by Friday, which is the deadline to move bills out of their house of origin, as the Chron reports.
Here in town, Supervisor David Campos' new Ellis Act ordinance which will require landlords to pay the difference between a tenant’s current rent and two years worth of rent for a similar, market-rate apartment to anyone they want to evict under the act takes effect June 1.
