Dan Walters

Opinion: Rental law likely to be a big issue

The Ellis Act has been California law for nearly 30 years, a major milestone in the recurrent political conflict over landlord-tenant relations – and changing it likely will be an issue when the Legislature reconvenes in December.

The law, passed in 1985 and named for Jim Ellis, the San Diego state senator who carried it, overturned a decision by the state Supreme Court, then headed by Chief Justice Rose Bird.

The court upheld a Santa Monica city ordinance requiring landlords to get permission from a city board before demolishing rental units.

The Ellis Act specifically allows evictions when landlords “go out of business,” thus allowing their units to be razed or converted into condominiums. And a decade later, it was expanded to allow rents to be raised on vacant units, regardless of local rent control laws.

Renter advocacy groups have long chafed at the law, but the heat was turned up when San Francisco’s landlords, responding to high demand for housing by affluent high-tech workers, began evicting renters to cash in on the soaring condominium market.

San Francisco tried to counter Ellis Act provisions with local ordinances imposing additional conditions on landlords, and local legislators introduced two bills to change the law itself.

Both anti-Ellis Act efforts met fierce opposition from property rights and landlord groups, and to date, both have failed.

Sen. Mark Leno and Assemblyman Tom Ammiano, both San Francisco Democrats, introduced Ellis Act amendment measures. Ammiano’s didn’t get out of the Assembly. Leno’s made it out of the Senate on its second try, only to die in the Assembly.

The Leno bill, aimed at speculators who buy apartment houses and then immediately evict tenants for condo conversions, would have barred such flips in the first five years of ownership.

Stymied in the Legislature, San Francisco’s Ellis Act critics turned back to a city ordinance saying that landlords would have to compensate evicted tenants by paying the differences between their current rents and the costs of renting replacement housing for two years – $100,000 or more in most cases.

Landlords filed suit, and in late October, a federal judge declared that the ordinance is an unconstitutional violation of property rights because it forces property owners to compensate for housing market forces over which they have no control.

The decision is likely to be appealed, and tenant advocates, who have support in San Francisco’s city government, are likely to renew their pitch to the Legislature for changing the Ellis Act.

Superficially, one might think that a Legislature dominated by liberal Democrats would be receptive to their pleas. But even the most liberal legislators must contend with well-organized landlords, especially small operators whose apartment houses are their pensions.

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.