Tenants Winning Big

Landlords Now Required to Subsidize Future Rents of Evicted Tenants

David Campos’s proposed legislation that would require landlords evicting tenants through the oft-abused Ellis Act to subsidize their rent for two years passed yesterday at the Board of Supervisors.  CBS 5 reports:

According to the city controller’s office, a person who paid $909 a month for a two-bedroom apartment in the Mission would get a relocation payment over $44,000. The previous limit for Ellis Act evictions was $5,200.

“The reality is that in this rental market, that money will not be sufficient to help someone stay in San Francisco,” Campos said.

The legislation stipulates that the evicting landlord must pay the difference between the tenant’s current rent and the market rate for a similar unit, with the goal of giving displaced tenants a two year buffer to find financially stable housing in our tight market.

Shockingly enough, the measure passed 9-2, with noted pro-development supervisor Scott Wiener even supporting the legislation.  This gives the bill a veto-proof majority when it hits Mayor Ed Lee’s desk.

Meanwhile, Senator Mark Leno is pushing forward a bill in Sacramento that would curb serial evict-and-flip landlords.  The bill, which recently cleared the Transportation and Housing Committee, would allow San Francisco to bar property owners from using the Ellis Act to “go out of business” until they have owned the building for at least five years.

Comments (29)

A band-aid when what this city needs is open-heart surgery.  

What about those of us who have been in San Francisco for years and are paying high rent but haven’t been evicted?  Where are the subsidies for us?

Of course, we get no subsidy while tech company whiz kids are making hundreds of thousands of dollars per year and changing the face of the city that real San Franciscans fell in love with years ago.  


so if you haven’t been evicted, what exactly are you requesting a subsidy for? what makes you a real San Franciscan? are you native? were your parents?

There is no such thing as a “native” .. People who claim to be “natives” are annoying (and generally trashy).

“while tech company whiz kids are making hundreds of thousands of dollars per year”

HUNDREDS of thousands? Doubt it. Most entry-level tech-bros make less than six figures. Surely some make the big bucks, but they are not the norm. 

Yep, that’s a good point actually.

Rent control is a silly rule that does nothing to help those who pay high rent and can’t afford them. Subsidies would be the way to go. Replace rent control with a means-tested subsidy paid from taxing rental income. That would be nice. 

But rent control protects (quoting from R. Devine, Who Benefits from Rent Controls? (Oakland: Center for Community Change, 1986): 

predominately white, well-educated, young professionally employed and affluent,” and that rent control had substantially increased the disposable income of these tenants while “exacerbating” the problems of low-income families.

And they control SF politics, not the residents of color, so good luck getting your subsidies. 

Hear, hear!  Why should someone live in a nicer apartment than me just because they make more money than me? 

“Why should someone live in a nicer apartment than me just because they make more money than me?”

it’s so hard to tell nowadays, I have to ask: is this satire?

Dear lord I hope so. Please tell me someone that lives believes that.

Imagine this: there are new real San Francisans now, and they aren’t you. 

You are sounding like one of those conservative hicks talking about “Real Americans” when you say “real San Franciscans”. 

I’ve been living in SF for 30 years and I work in tech also. Am I a real San Franciscan?

Hey, why not increase it to 5 or 10 years? Handouts for all!This car

You honestly think it’s a handout if it’s coming from an investor who has just evicted you using the Ellis Act? Hmm. As your gif depicts, you fire off words like they’re meaningless.

if you really find relocation costs to be a big inconvenience in the most profitable housing market in the country, then get out of the SF real estate market. there are plenty of people who will happily take your place. 

“ This gives the bill a veto-proof majority when it hits Mayor Ed Lee’s desk.”

Thank you for that part. I’ve read this story on numerous sites, but they all seemed to be celebrating prematurely despite the caveat that Lee hadn’t even said whether or not he would sign it. This clarifies things for me. Many thanks!

I have not read the legislation (can’t seem to find it on my internet, little help?), but as I mentioned months ago when this first came up, I have trouble understanding how they will implement it. Will a new bureaucracy have to be set up to determine market rates and “similarity?” How carefully will neighborhood differences be parsed? A Mission 2-bed and a Sunnyside 2-bed are pretty different. Then there’s the matter of amenities. Washer-dryer? Parking? South-facing? Will this be a determination based on fact-finding after a hearing, or some sort of categorical assessment? What will the appeals process be? It seems logistically burdensome, for the City, most of all, but also for landlords and tenants. 

Yes, this is going to become a major bureaucratic shitshow. Also rental property owners have been surprisingly quiet, expect them to challenge this law in court.

It’s a deterrent, not a new beaurocracy.

I wish I had something clever or snarky to say, but I’ve been on both sides of this coin and it really kinda sucks either way. But hey, we got them government boys busy don’t we….like that will ever EVER somehow convince people to pay less for SF real estate. Sigh. Boom time y’all!

Why the dig at Scott Wiener? On housing, he’s actually the only supervisor who makes sense. Of course he would vote for this: if speculator Ellis act, they should pay for the relocation. The fact that he also wants to encourage more building is build not on a dogmatic pro-development stance, but on the fact that, you know, 75,000 more people live in the city and no housing has been built to accomodate them…

Oh right, who needs common sense when they can be rightous. 

Won’t fix everything, but this is definitely a good and necessary step.

If I were a landloard in SF the only thing this would make me want to do is SELL! SELL! SELL!

Is this new legislation helping anything?

Like so many of these laws, it will help by accelerating the conversion of rentals to ownership. Unfortunately the relocation fees will just be added to the selling price and make the TICs even more expensive.

Has UP become a new destination for anti-government SFGate commenters?

More shortsighted, populist legislation which doesn’t address the reason landlord are Ellis acting in the first place. Much like last years TIC legislation which was enacted by Supervisors who wanted to appear tough on landlords, this law will further accelerate Ellis Acts because now landlords of buildings will have to preemptively empty their buildings before putting them on the market to maintain the building’s value.  

But then, as long as their electorate keep blaming each other for the city’s problems, it keeps our Supes out of the hot seat. 

The truth of the matter is this: up to now, an owner who wanted to flip would sit down with the tenants and discuss what it would take to get them out. They would say: “you know, I could refuse any deal, you would Ellis Act, I would come up with some impairment and stay in one year and at the end you give me $8,000. Or I could move in a couple month, and then I have to pay the difference between my rent and market rent. So give me an incentive to move.” The owner would then say: how about I pay you 2 years of rent difference, that is $50k, deal? Deal. Tenant gets a significant buy-out, owner doesn’t Ellis, win/win. 

Now: tenant says: I’m getting $50k no matter what, give me a $100k. Landlord says: sorry, buddy, but that $100k is more than the loss in value I take from Ellis acting your 1BR, so I’m just going to Ellis act and I won’t feel bad about it, because you still get $50k.

So it’s good for the tenants who would get Ellis Acted no matter what (those with scumbag owners who think $8,000 is too much for them), but bad for everybody else.

(it seems that a lot of the owners who Ellis act are recidivists, which means Ellis act is not such a deterrent, and that the cost of the 5y rental prohibition doesn’t stop buyers. So get ready for many more!)

BREAKING NEWS: We’re not actually having an Ellis Act-driven epidemic!

Anyone who becomes a landlord in SF knows what they’re in for, so I can’t feel to sorry for landlords. But if I ever hear housing activists bemoaning the shrinking supply of rental housing units in the city, there will be nothing to do but laugh at them, because no sensible person would want to become a landlord when the city has essentially decreed it to be a lifetime commitment.

Okay, I’m a SF landlord. A nice one. I always follow the law. I love my two buildings and I love my tenants and I got into this in order to restore and save two old Victorians. But I gotta ask, at what point will the Board of Supervisors stop extorting money from landlords to solve a housing problem that cannot be solved by stupidly extorting money?

All this does is turn over even MORE of the local rental inventory to big time hustlers who can afford this insanity, and who are jerks who commit the sin of Ellis Act, and it ends up preventing more honest small time landlords like myself–individuals whose only goal is to fix up a property, have tenants, follow the laws, and end up with something like a small retirment after 30 years. It’s dumb and just bad governing at its worst.

Let’s get rid of rent control for anybody in this City who doesn’t need it or qualify for it. The idea that I am subsidizing somebody earning $900,000 per year is just nuts. Let’s strengthen rent control for working families and for people who have lived in their homes for at least five years. Let’s subsidize their rents from a City Tax that all residents pay, so it’s fairer.

Let’s tax flippers out of business, and tax large real estate investment companies fairly every year and put that money in a fund to subsidize rents for working people, like a Section 8 thing that is expanded for people who have families and earn less than $75,000 per year. Like Obamacare’s expansion of Medicaid. Let’s get rid of rent control for all old buildings built before 1950 so that Victorians can be restored sold off to owners so people can just own the darned things anyway, which is all buyers want anyway, and put stiff rent controls on all newer buildings after the first five years, so that rents are low for buildings that nobody wants to buy anyway. And investors will still get a good return after building a buiding. 

Do something, anything, to stop builders from building condos, and get them to build rental housing instead. Change the codes so it’s easier and makes a better long term investment.

Let’s give long term tenants interest free loans so they can buy out their landlords, so they don’t have to move and leave the City. Win win. Make all Ellis Act evictors offer the tenants a buy out for the unit. Often the rent is so high, it’s about the same as owning anyway.

We could do a lot of this with a City wide tax. Like NYC. It’s about time we did this, because there is way too much money in this town, and if we taxed a little of it (like 1% of all income over $100,000) you’d have a large pool of money that could actually do some good but only to the people who deserve it.

I’m just grasping at anything here. The fact is, we need new ideas, and more rental property in the city–that’s the only way to get rents down to a more reasonable level. The idea that someone who buys a property can’t move in without being extorting for $50,000 is ludicrous.  A law like this is just going to make things worse and not help anybody except the lotto winning tenant who gets $50,000 ($50K!! Jesus) to simply move. It’s ridiculous.

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