Supervisor David Campos has come back to the Board with a new, dialed back version of the Ellis Act payout legislation that was previously passed and took effect last summer only to be declared illegal by a federal judge after serious pushback from one Nob Hill evictor in particular. Under the new proposed amendments to the law, as explained in a release from Campos' office, relocation assistance payments by landlords would be capped at $50,000; tenants would be required to use the money "on replacement housing, moving costs, or for other costs incurred to mitigate the negative impact on the tenant of eviction"; and there would be a clearer method, by the Controller, to determine what the market rate of an apartment in any given neighborhood is, to calculate the payment.
The original law still remains in play, and the City Attorney is appealing that October decision by the federal judge to the Ninth Circuit, for which arguments will begin on February 26. But now Campos says the new amendments should "address the Court’s concerns while simultaneously offering meaningful assistance to displaced tenants struggling to remain in San Francisco despite skyrocketing rental prices."
Furthermore, Campos adds, "I have tried to strike a balance to address the Court’s concerns while continuing to provide meaningful assistance to displaced residents. Our housing crisis is so serious, that we must use every strategy in the book to keep this City diverse, retain families, and preserve the character of our neighborhoods."
The legislation requires all landlords invoking the Ellis Act to evict tenants to pay them relocation allowances equivalent to the difference between their current rent and what it would cost to rent a similar, market-rate apartment for two years a calculation that in some cases could be well over $100,000. In his decision in U.S. District Court in October, Judge Charles Breyer wrote that the law, as passed in 2014, "requires an enormous payout untethered in both nature and amount to the social harm actually caused by the property owner’s action." He was sympathetic to landlords concerns of being gouged, saying, "A property owner did not cause the high market rent to which a tenant who chooses to stay in San Francisco might be exposed, nor cause the lower rent-controlled rate the tenant previously enjoyed."
Incidentally, $50,000 or thereabouts seemed to be a common going rate for landlord payouts in no-fault eviction/voluntary move-out situations last year, though the Tenants' Union had reports of payouts as high as $80,000 in the last five years.