Landlords challenge S.F.'s new law on evictions

A woman sat in front of a large chart showing the numbers of evictions because of the Ellis Act since 1997 Wednesday September 25, 2013 in San Francisco. A woman sat in front of a large chart showing the numbers of evictions because of the Ellis Act since 1997 Wednesday September 25, 2013 in San Francisco. Photo: Brant Ward, The Chronicle Photo: Brant Ward, The Chronicle Image 1 of / 9 Caption Close Landlords challenge S.F.'s new law on evictions 1 / 9 Back to Gallery

(07-24) 10:25 PDT SAN FRANCISCO -- Landlords are challenging San Francisco's latest move to discourage evictions from rent-controlled apartments, an ordinance requiring them to pay displaced tenants the difference between their current rent and the amount needed to rent a similar unit at market rates for two years.

In a suit to be filed Thursday in federal court, property owners and the San Francisco Apartment Association, which represents landlords, say the city's law is an unconstitutional interference with property rights and an unreasonable burden on a landlord's right under the state's Ellis Act to get out of the rental business.

'Permanent landlords'

"The city is essentially forcing people to become permanent landlords by making it wildly expensive to withdraw a unit from the rental market and take possession of their own property," said attorney J. David Breemer of the Pacific Legal Foundation, which represents the landlords. "This law amounts to out-and-out confiscation."

Supervisor David Campos, who sponsored the ordinance, said he was confident it would be upheld as a reasonable "relocation payment for the purpose of helping people stay in the city." And a tenants-rights advocate said the suit was designed to benefit speculators.

"It's really speculators who are doing these Ellis Act evictions, investors who are buying these properties to evict (tenants) so they can flip it and make a profit," said Tommi Avicolli Mecca of the San Francisco Housing Rights Committee.

While tenants are protected by local rent-control laws and normally can be evicted only for misconduct, the 1984 Ellis Act allows landlords to evict all their tenants in order to remove a building from the rental market.

Impact of evictions

Ellis Act evictions have their greatest impact on displaced renters in cities like San Francisco because of soaring rents. The city has unsuccessfully lobbied state lawmakers to allow evictions only by those who have owned buildings for at least five years, and has also sought to discourage evictions by requiring payments to tenants.

A 2005 ordinance, upheld by the courts, entitled each tenant to $4,500 in relocation fees plus inflation adjustments, with additional amounts for the elderly and disabled.

Campos' ordinance, which took effect last month, raised the compensation to the difference between the current rent and two years of market-rate rents for a comparable unit, as determined by the city controller's office. Landlords can seek to reduce their payments if they would suffer "undue financial hardship."

The goal is to give a displaced renter "at least a fighting chance to stay in town," a legitimate purpose under past court rulings, Campos said Wednesday.

But the landlords said the payments are excessive and offer a windfall to tenants, who can use them for any purpose they wish.

$118,000 payout

Lawyers said their lead plaintiffs, husband and wife Daniel and Maria Levin, would have to pay nearly $118,000 to remove the downstairs tenant from their two-unit building at 471-73 Lombard St. and make room for family and friends to stay there.

"The private benefit accruing to tenants (from those payments) far outweighs any conceivable incidental public benefit," the landlords' attorneys said.