Oakland landlords lose courtroom battle, after paying $6,500 to move back into their house

OAKLAND — A pair of landlords forced to cough up more than $6,500 to move back into a house they own lost their courtroom battle against the city, ending — for now — the fight over Oakland’s controversial relocation payment ordinance.

A federal judge dismissed the lawsuit, which challenged Oakland’s right to demand that landlords pay their tenants thousands of dollars in relocation assistance for owner move-in evictions. The ruling leaves intact an ordinance advocates say helps protect displaced tenants from becoming homeless in a cut-throat rental market, but which landlords say puts an unfair burden on homeowners. The ordinance is similar to rules in other Bay Area cities, including Berkeley, San Francisco and Palo Alto.

The plaintiffs plan to appeal the ruling.

“I think we have a very good shot,” said Sacramento-based property rights attorney Meriem Hubbard, who represents the homeowners. “I think our arguments are correct…The first round is over and we’re getting up to the appellate court, which is where we want to be.”

Oakland City Attorney Barbara Parker was not immediately available for comment.

The case was filed in November by Lyndsey Ballinger and her wife, Sharon Ballinger. The women, both of whom were on active duty in the Air Force, lived in a three-bedroom home they owned in Oakland until 2015, when the Air Force transferred them to the Washington, D.C. area. The Ballingers rented out the Oakland house while they were away, intending to return when their assignments were completed. In March of last year, they gave their tenants notice to vacate and made plans to move back.

While the Ballingers were away, the Oakland City Council passed the relocation payment ordinance. The new rule, which went into effect in January 2018, requires landlords to pay if they are seeking to evict a tenant and either move into the unit themselves or move in a family member. That meant the Ballingers had to pay their tenants $6,582.40 in relocation assistance before they could take back possession of their home — a condition that didn’t exist when they made the original rental agreement, and one that put them under a considerable financial burden, the couple argued.

In Oakland, landlords must pay tenants $7,116.22 for a studio or one-bedroom unit, $8,758.43 for a two-bedroom unit and $10,811.20 for a unit with three or more bedrooms. But since the Ballingers’ tenants lived in the house for less than two years, their relocation payment was smaller. The city adjusts the payments for inflation every year. Tenants who are elderly, disabled and low-income, as well as those with minor children, are entitled to larger payments.

The ordinance covers renter-occupied single-family homes, condos and multi-family apartment buildings built before 1996.

The Ballingers claimed the ordinance constituted an illegal taking of private property under the Fifth Amendment.

But U.S. District Judge Haywood Gilliam Jr. disagreed, and on Friday granted the city’s motion to dismiss the case without giving the plaintiffs the option to amend their claims and try again in lower court.

“The Court finds that the Ballingers have failed to plead a cognizable legal theory on any of their constitutional challenges to the Ordinance and thus grants the motion to dismiss,” the judge wrote. “Of course, in granting this motion, the Court does not opine on the wisdom or the effectiveness of the Ordinance in alleviating what is undoubtedly a housing crisis in the Bay Area.”

The Fifth Amendment, which the Ballingers evoked in their lawsuit, forbids the government from taking private property for public use without just compensation. But the judge found several problems with the Ballingers’ case, including: there’s no precedent supporting their argument that forcing someone to pay money is the same thing as illegally seizing their property. If the court were to adopt the Ballingers’ argument, the judge continued, it would be impossible for state and local governments to regulate housing conditions. The government would have to pay compensation to every landlord or tenant who lost money because of a housing policy.

The Ballingers also attacked the basis of the ordinance, arguing it’s arbitrary and fails to advance any legitimate government interest.

The judge disagreed with that argument as well.

“The City Council’s legislative purpose, to promote community stability and help tenants avoid displacement and high moving costs, was a legitimate one,” Gilliam wrote.

But the Ballingers won’t give up.

Since she filed the lawsuit, Lyndsey Ballinger said several Oakland landlords who are struggling with the same issue have reached out to offer support.

“Our case, I think, is a good example of how a well-intended policy can put a squeeze on the middle class,” she said.

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