Legislation Aims to Restore "Original Intent" of Ellis Act

By Bay City News
|  Monday, Feb 24, 2014  |  Updated 7:16 PM PDT
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In front of an apartment building in San Francisco's Chinatown Monday morning, state Sen. Mark Leno announced legislation to help tenants who are being evicted out of homes through what he and others called loopholes in the state's Ellis Act. Joe Rosato Jr. reports.

In front of an apartment building in San Francisco's Chinatown Monday morning, state Sen. Mark Leno announced legislation to help tenants who are being evicted out of homes through what he and others called loopholes in the state's Ellis Act. Joe Rosato Jr. reports.

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In front of an apartment building in San Francisco's Chinatown Monday morning, state Sen. Mark Leno announced legislation to help tenants who are being evicted out of homes through what he and others called loopholes in the state's Ellis Act.

The Ellis Act was enacted in the mid-1980s to allow longtime landlords to leave the rental business. However, the act has been "abused" in San Francisco in recent years, according to Leno, D-San Francisco.

Speculators are buying properties and posing as new landlords, then evicting the tenants within a matter of months to "flip" the building and convert it into a high-cost home or luxury condominiums, the senator said.

On Wetmore Street, a small side street off of Clay Street, Mayor Ed Lee stood with Leno, Assemblyman Phil Ting, D-San Francisco, city supervisors David Chiu, David Campos, Scott Wiener and Norman Yee, and other tenant advocacy group leaders in support of the state bill introduced Friday.

The legislation proposes prohibiting property owners from using the Ellis Act to evict tenants for five years after purchasing a building and limits repeat use of the Ellis Act to evict tenants from multiple homes and carries fines and penalties for violating those restrictions.

According to Leno, more than 300 San Francisco homes have been taken off the rental market through the Ellis Act in the past year.

He called this a "unique problem" for San Francisco, which is experiencing a boom in its economy.
Tenants at the three-unit apartment on Wetmore Street, where Monday 's event was held, said they had lived at the building for many years before they were told to move. One elderly resident, Piuying Yee, has been at the apartment since 1964 while another couple has lived there for 18 years.

Last year, those tenants were served an eviction notice under the Ellis Act when the longtime landlord sold the property to a development firm.

The tenants are fighting the eviction but continue to live in a sort of housing limbo, uncertain if they can stay or should look for new housing.

Leno said his legislation aims to "protect the existing affordable housing stock" during what he called a "housing crisis" in the city.

He said his bill "restores the original intent of the Ellis Act" to help landlords.

Mayor Lee called the speculative purchases one of the "excessivenesses that occur in this economy" and resolved to curb the practice, as well as fund and build more affordable housing in the city.

Assemblyman Ting vowed to support closing the loopholes to protect tenants.

The Ellis Act "was never meant to be used to throw families on the street to make a few more bucks," he said.

Ting noted that longtime elderly and disabled residents and many immigrant families are often affected and they "have a right to be here."

He said Leno's bill is "one of the many things we have to do to tackle the affordability crisis."
A group of protesters lined the street Monday morning demanding that the lawmakers keep the Ellis Act unchanged.

Supervisor Chiu, while acknowledging the protesters, said the reforms in the legislation, including the five-year waiting period, are "not unreasonable."

Supervisor Campos agreed and said that there has been a surge of Ellis Act evictions displacing longtime renters in his district, which includes the Mission District.

He said the demonstrators, made up of a group of local property owners, should support the bill, which cuts back on people's ability to "speculate and make a quick buck."

Noni Richen, president of the Small Property Owners of San Francisco Institute and a landlord of several city apartments for many years, said the Ellis Act should stay the way it is.

Richen said the changes would make it difficult for landlords to get out of the real estate business, which has become too expensive for many owners.

She said the real issue isn't evictions but rather the "rising and rising costs" for landowners who have to foot the bill on rent-controlled units and will miss opportunities to sell buildings to developers or other property owners.

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