CAA chapter sues to protect property owner rights under Ellis Act

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A chapter of the California Apartment Association and two other groups have sued the city of San Francisco, claiming it passed legislation that violates building owners’ rights under the state’s Ellis Act.

The legislation, approved by the San Francisco Board of Supervisors and signed by Mayor Ed Lee, prohibits owners of multi-unit buildings from combining units in a building for 10 years following an Ellis Act eviction or for five years following an owner-move-in eviction.

The lawsuit, filed Tuesday, Jan. 28, says the state Ellis Act pre-empts the city legislation. The Ellis Act allows building owners to take a building off the rental market and convert those units to condominiums or single-family homes.

Under the law, building owners are already required to give occupants up to one-year advance notice and provide relocation fees of $5,105 per tenant, up to a maximum of $15,315, plus $3,403 additional for tenants who are senior or disabled.

Yet the San Francisco legislation targeted in the suit prevents families who own a building from creating a home that meets their needs.

For example, it keeps a family from combining two small units into a larger one to provide a home for a growing family. Couples with young children often find themselves in need of additional space they did not anticipate when they purchased a rental building, yet the legislation punishes them.

“Families are fleeing San Francisco due to a multitude of reasons that include a lack of adequate space for growing families that often include multiple generations,” said Janan New, Executive Director of the San Francisco Apartment Association, a chapter of CAA. “This legislation exacerbates that problem by punishing and limiting options for families who simply seek to create a home that meets the needs of their family.”

The other plaintiffs include the Coalition for Better Housing; and the San Francisco Association of REALTORS.

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  • We should put ALL rental units in San Francisco under rent control, not only building build before 1978,
    Also the residents benefiting from frozen rent’s should have they’r pay check frozen with the same yearly increase allowed under the rent control.
    Then people would understand life as a landlord with rent control. My repair and supply company they incease ther rate and charges as needed.

  • RE San Francisco in general
    I grew up in the East Bay and went to UC Berkeley
    There is no city more hostile to apartment owners in Calif-Not even Berkeley.
    Besides legal action to stand up for our rights, I would recommend that CAA hold no functions in SF and boycott the city and all its establishments, restaurants, sports events etc

  • The article states it well. We purchased a 4 one-bedroom unit building in 1996 when we had one child. In 2005, we attempted to merge two units to accommodate our then family of 5 with one on the way. We had a lot of community support – including folks at UCSF (it it a challenge keeping talented doctors with growing families in the city), to the NYT which had a timely article about Seattle and San Francisco – childless jewels. The planning board told gave us a 30 second hearing and told us we had outgrown our building and needed to move. We won on appeal, when even the planning department was questioning their own rules against mergers. The board of supervisors move feels reactionary and political, because of highly publicized evictions, but it is not based on smart long term city planning or the Ellis Act. The reality is that 75% of San Francisco housing stock is studio to two bedroom units – read not for families. With our merger, we are still living urban green, we manage our own building and are alway available to the tenants who are here.

  • Michele- I like the idea of limiting pay to the percentage allowed by the law.
    Being a rental brokerage, we see on a daily basis how rent control effectively removes properties from the rental inventory. Landlords are afraid that once they rent, they will never have the ability to live in it again or will end up being subsidizing a tenant..

  • For people who live outside the city.. Here are two recent rent control stories:

    1) In a 12 unit apartment building, in a hip area of the city lives a man who has been in the same 1 bedroom unit for over 20 years. He’s in his 40’s has a great paying job, making between 80-100K/year.

    His neighbor, in a similar unit pays $2700.00/month which is a little low for this neighborhood..He however only pay $800.00/month! His lease expired long ago, but per the city, he is allowed to stay on a month to month basis as the same rent..

    Now here is the best part… the apartment getting older and needs emergency piping repairs which made it necessary for him to move temp.. Per the city the owner has to pay $250.00 a day to put him in a hotel!!

    Is this fair? Does this encourage owners to proactively make repairs and upkeep on the property? Are rent control laws made to protect able body men,making 80K? I don’t think so.

    2) Building owners who own certain types of multi-unit buildings must seismically upgrade them. A huge expense. They law does allow the owner to pass this expense to the tenants.. Sounds good? Well the exception is for people who based on an income formula will be exempt.. So at a recent San Francisco Apartment Association Meeting an owner presents this scenario.. He owner a large building, where everyone is lower income.. He is by law required to upgrade the building, but he cannot pass the costs to his tenants AND most likely will need to pay to relocate them while the work is being done AND he cannot increase their rent as its a rent controlled building AND he can’t tell all the tenants to leave..

    What is this guy going to do? Is it fair to ask someone like this to shoulder such financial responsibility and not allow him to decide the best way to manage the situation?