2015 Promises to Be a Battleground Year for Ellis Act Evictions — The Bold Italic — San Francisco
As San Francisco neighborhoods continue to transform — in large part because of the tech boom — one instrument of that change faced increasingly successful opposition in 2014.
I’m talking about the Ellis Act, the piece of state legislation passed in the 1980s that’s intended to help landlords exit the rental market and use their property for some other purpose. And in some ways 2014 was a good year for tenants fearing Ellis evictions, with much to gain or lose in 2015.
According to city data, last year saw property owners submitting a total of 41 buildings, amounting to 140 units, for Ellis withdrawals. That’s down from 77 buildings (326 units) in 2013 — the largest spike in recent history. In 2012, SF also had a tough year, seeing 54 buildings (137 units) withdrawn, up from 29 buildings (88 units) in 2011.
In terms of 2014, Ellis evictions peaked in mid-January and dropped significantly after local politicians made noise about legislation aimed at curbing Ellis abuses and activists raised awareness, according to Erin McElroy, executive director of the Anti-Eviction Mapping Project. And after months of rumors — and falling Ellis evictions, as a result — the city supervisors announced Prop G in June, a ballot measure that proposed an incremental tax on properties bought and sold within five years.
“In some ways the slowing Ellis evictions show that the activism and attention pushed that tool farther down the list,” Tyler Macmillan, executive director of the Eviction Defense Collaborative, told me over the phone. “But even though it’s now a fourth or fifth [choice], landlords still have access to a variety of other nefarious means, such as phony owner move-in evictions. It’s part of the portfolio of options.”
In some ways the slowing Ellis evictions show that the activism and attention pushed that tool farther down the list. But landlords still have access to a variety of other nefarious means, such as phony owner move-in evictions. It’s part of the portfolio of options.
Despite Prop G’s failure in the November election, McElroy made the case that given the funding — $100,000 for support versus the $1.7 million from the real estate industry, and the results of 117,887 no votes to 100,776 yeses — the measure demonstrates that San Francisco was in favor of a policy to thwart speculators.
Janan New, executive director of the San Francisco Apartment Association, a landlord support and advocacy group, doesn’t agree. “I will let them take care of their egos [claiming victory],” she told me. “The Ellis Act is a counterbalance to rent control. It exists because of the restrictive nature of those laws in San Francisco. As long as there’s rent control, when landlords decide they no longer want to subsidize those [rent-controlled] units, they use Ellis.”
Although statistics are useful, it’s worth pointing out that city available Ellis stats don’t tell the whole story. As Macmillan said, Ellis-eviction threats are simply one of many options that landlords use to throw people out of their homes without a legal just cause.
“The numbers don’t reflect reality,” state senator Mark Leno, who represents San Francisco, told me from his office in Sacramento. “We don’t know how many families lost their homes because they were intimidated by a speculator, who threatened Ellis.”
And any deals made under the threat of an Ellis eviction — often because landlords are loath to stain a property’s title with such an eviction and are willing to pay tenants tens of thousands of dollars to avoid an Ellis — aren’t recorded by the San Francisco Rent Board.
That’s going to change this year, due to legislation sponsored by supervisor David Campos. He introduced the city law that requires some regulation and reporting of landlord buyouts of tenants. That’s important because at the moment there are conceivably hundreds of buyouts a year, and we don’t know what effect they’re having on our neighborhoods.
Another local effort has made headway as well but was blocked by a federal judge, leaving the city in limbo for the time being. Supervisor Campos introduced a tax increase on property owners hoping to Ellis-out long-standing tenants — bumping the now-required $5,261 up to an amount based on the difference between rent-controlled and market rates as well as other factors. Soon after it was made law, a landlord attempted to Ellis-out a tenant. Backed by the real estate industry, a mom-and-pop landlord challenged the ordinance, resulting in federal magistrate Charles Breyer striking down the law.
“The logic of that decision would have thrown out rent control,” said Randy Shaw, an attorney with the Tenderloin Housing Clinic, a tenants’ group that often litigates Ellis cases. “[Judge Breyer] basically used a standard that would not require regulation and not have landlords responsible for the market.”
It was a defeat, but not a total one. City attorney Dennis Herrera challenged Judge Breyer’s ruling with the Ninth Circuit Court of Appeals, a judgment that may come in early 2015. And with the Circuit Court’s panel of judges, the results are less predictable.
“I can attribute [the failure] to the enormous lobbying effort and misinformation campaign put forward by the realtors’ associations,” Leno said. “And I have proof to support that assertion.”
At the state level, where Ellis lives in law, Senator Leno, backed by mayor Ed Lee and several tech companies that are part of sf.citi, have been studying their options for Ellis reform this year. Their effort in 2014 to require property owners to own a building for five years before an Ellis didn’t succeed, defeated by the vigorous lobbying efforts of the state realtors’ associations (although the legislation altered the law only in San Francisco).
“I can attribute [the failure] to the enormous lobbying effort and misinformation campaign put forward by the realtors’ associations,” Leno said. “And I have proof to support that assertion.”
Senator Leno wouldn’t tell me much about his legislative agenda in 2015 during our telephone interview. He did say that he’s reviewing last year’s legislative history in partnership with Mayor Lee’s office and other supporters. “We’re looking at the kind of assurances I had to make to my senate colleagues to further and better differentiate between mom-and-pop landlords and speculators. Those finer details are still being considered,” he said.
New, of the San Francisco Apartment Association, told me that her organization is going to fight local and state efforts to significantly reform Ellis. “[Ellis] is not the problem,” she says. The real issue is the lack of housing production over the years, she said. And now that demand has skyrocketed because of new jobs in the city, we’re facing a crunch.
New said the association planned to do something about the crisis and pointed to an effort with supervisor Scott Weiner to allow landlords doing construction, such as earthquake retrofits, to build and attach new rent-controlled units onto their property. The law passed, and the involved parties are working out the details with the city government, New said.
It’s anyone’s guess if renters in San Francisco will get any relief from Ellis at the state level. The realtors’ associations are powerful. One legislative staffer familiar with the groups likened it to a grassroots organization: “They’re everywhere, but they have a shitload of cash.”
Overall, 2014 looked to be a mixed bag of successes and failures for renters. Some combination of legislative action, community activism, and focused media attention on Ellis speculators looks like it may have been responsible for the near 50% reduction in buildings withdrawn from the market. And Supervisor Campos’s legislation that requires property owners to file paperwork on each tenant-buyout package with the Rent Board will give us a clearer picture of the extent to which informal evictions are a concern.
But despite the claims of victory, the real estate lobby remains powerful both locally and in Sacramento. An attempt at state-level Ellis reform will surely face the same vigorous opposition this year as it did in 2014, which is not to say that it’s a futile effort, but that Leno and company will encounter entrenched resistance. Locally, as we can see from the current challenge to the increased Ellis payouts, the industry is willing to dig into its war chest, fighting in court and at the ballot box.
In the city we may soon know the results of the Ninth Circuit’s decision, one that has the potential for significant change. And we may well see another ballot measure, similar to Prop G, and further legislative efforts by our local elected officials. This year is shaping up to be an important year for the two thirds of the city that rent a home.
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