Ousting tenants made costlier by City
The California Legislature is considering a bill to close loopholes in the Ellis Act. S.B. 1439, authored by State Senator Mark Leno, which would require a five-year moratorium on Ellis Act evictions to prevent speculator-driven activity that has affected San Francisco.
The bill passed the State Senate by a 21 to 13 vote on May 29, with a commitment from the senator to work on amendments. Those amendments will address the difference between small family property holdings and holdings by businesses “that are abusing the intent of the Ellis Act,” a press release from the senator’s office says. This summer, policy committees in the California Assembly will take up the bill.
“Mark Leno’s bill to require someone to own a place for five years before reselling it begins to attack the problem of speculation,” said Tommi Avicolli-Mecca, a San Francisco housing advocate with the Housing Rights Committee of San Francisco. “Hopefully, it will pass and have some effect before it’s too late.”
On his .gov website, Leno cites the results of a study by a San Francisco-based group, Tenants Together, to underpin the importance of passing S.B. 1439.
The report is the product of a collaboration between Tenants Together and the Anti-Eviction Mapping Project. A San Francisco based group, the Mapping Project, has led efforts to create visualizations of evictions in San Francisco.
In addition to assisting with research and data analysis, the Mapping Project created a unique online portal for the report that includes interactive visualizations. Titled “The Speculator Loophole: Ellis Act Evictions in San Francisco,” the report is available online at www.TenantsTogether.org/ellisreport.
The timeline of evictions reveals the dominance of speculators in the market. Data show that 51 percent of the Ellis Act evictions are done by owners within the first year of their ownership, and 78 percent by owners within their first five years of ownership.
“This data underscores the importance of passing Senator Leno’s legislation,” said San Francisco’s District 8 Supervisor Scott Wiener.
Ellis Act Evictions Get More Expensive
You’ve lived in the same apartment for 15 years, your rent is low, your landlord is cool and the neighborhood is on the up and up. Then suddenly, poof, the building is sold to a group of owners with a business name and the next thing you know there’s an Ellis Act eviction notice on your door.
Sound familiar? While the familiarity of this predicament has become almost pedestrian in San Francisco’s most gentrified neighborhoods, the cost of doing business in such a fashion has recently risen.
But the process became more expensive for landlords in the city looking to oust longtime tenants. The Board of Supervisors voted 9-2 on April 8 to force landlords invoking the Ellis Act to effectively boost compensation to longtime tenants on rent control.
If a landlord uses the Ellis Act, the evicted tenant will receive the greater of two payments from the landlord. Either, the tenant will get the City’s existing rent relocation payment, “or the difference between the tenant’s current rent and the prevailing rent for a comparable apartment in San Francisco over a two year period,” the law says.
landlords can obtain a different payment obligation, however. If they can show the prescribed obligation would cause “undue financial hardship” or if they can show that the City’s calculation doesn’t reflect the market rate for a comparable unit, the landlord’s payment can be changed.
“We must keep people stable in their housing during this time of explosive housing prices,” said Wiener, who voted for a law to up the payouts. “If people do lose their housing, we need to give them a fighting chance to stay in our community.”
“I think the new law is good because it gives displaced tenants a better chance to stay in the city,” Mecca said. “The previous amount was outdated, given the city’s high rents, the highest in the country – and rising all the time. What could one do with $5,200? Even with the household maximum of $15,795, it’s not possible to relocate, considering that it’s going to cost more to put down first, last month and security deposit on a new place.”
How much will it help? “Time will tell,” Mecca said. “I wish it were higher, but I understand that the City attorney’s office thought the law was more defensible at this level of relocation.
“I always think we should push the envelope as far as we can and see what happens. The more money, the better cushion people have. The reality is that for the speculators and investors doing the evictions and threats of evictions, this is part of the cost of doing business. Considering the profits they make, they can absorb it easily,” Mecca said. “The most important thing, I think, is to stop the speculators and the investors from continuing to evict or harass or buy out people.”
From Castro Courier, June 2014
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