California state Sen. Mark Leno tables Ellis Act reform bill

SACRAMENTO — State Sen. Mark Leno will forgo efforts this year to take on “greedy speculators” who he says are gobbling up San Francisco’s limited rent-controlled housing supply.

Leno, D-San Francisco, said Tuesday that he was forced to table a bill that would have severely restricted a new landlord’s ability to evict tenants under the Ellis Act after he could not assemble enough votes to get it out of a policy committee before a legislative deadline.

The 1986 Ellis Act lets landlords who want to get out of the rental business evict tenants without cause. But it has also been used by real-estate investors who buy rent-controlled properties and evict tenants so they can flip a property for profit.

SB364 would have required landlords in San Francisco to own a building for five years before evicting tenants under the Ellis Act, in an attempt to reduce the number of serial speculators in the city. Leno, who partnered with Mayor Ed Lee on the bill, said he will take up the bill again in January. Opponents argued that SB364 would lead to landlords using the Ellis Act to evict tenants before selling a property.

“We continue to tell the truth of the suffering in San Francisco happening today by a small group of clearly greedy speculators, and our job as legislators is to craft policies that benefit the greater good, not the profits of a few,” Leno said Tuesday.

The bill brought hundreds of San Franciscans to the state Capitol, mostly in opposition. Leno said he was frustrated by the misinformation given to many of the Chinese-speaking opponents bused in by real-estate interests.

Leno expressed the same frustrations last year when a similar bill failed. This year’s bill fell one vote short in the Senate housing committee, which is where SB364 will be taken up in January. Leno’s efforts follow a recent city report showing a nearly 50 percent drop in Ellis Act evictions in San Francisco in the past 12 months compared with the previous year.

Walt Baczkowski, chief executive officer of the San Francisco Association of Realtors, which opposed the bill, said he’s happy Leno is taking time to “improve his legislation.”

“Everyone is aware that our housing market faces many challenges, and needs a well-thought-out solution,” Baczkowski said in a statement. “We hope to work together with Sen. Leno over the next two years to achieve a comprehensive and effective solution.”

Melody Gutierrez is a San Francisco Chronicle staff writer. E-mail: mgutierrez@sfchronicle.com Twitter: @MelodyGutierrez