For years, San Francisco politicians have tried and failed to reform the Ellis Act, a state law that has been one of the major drivers of evictions in The City.
Now, Assemblymember Alex Lee of the South Bay is picking up the reins, and he’s hopeful that this time around, his colleagues in the Legislature will view Ellis Act evictions in the context of a homelessness crisis that recently has spread beyond California’s big cities. Limiting these evictions, Lee argues, will help preserve cheap apartments and prevent low-income tenants from falling into homelessness.
“Homelessness is a problem that every jurisdiction and community struggles with,” Lee said. “Protecting affordable units and protecting vulnerable tenants is the easiest first step to preventing growing homelessness.”
The Ellis Act, passed in 1985, allows landlords to evict tenants to “go out of the rental business,” and sell their rental property as condominiums. It’s currently one of the few paths landlords can take for no-fault evictions of rent-control tenants in cities like San Francisco. After an Ellis Act eviction, former tenants face the daunting prospect of finding a new apartment within their price range, and the rental market loses affordable, rent-control units.
Lee’s bill, AB 854, would prevent property owners from filing an Ellis Act eviction within five years of purchasing a property in cities that currently have rent control. It would also put in place new regulations to prevent landlords from using the Ellis Act multiple times at multiple properties.
The objective, Lee says, is to preserve the “true intention” of the law by providing an exit route for long-time, mom-and-pop landlords while cracking down on “serial evictors and property speculators.”
One in three recent Ellis Act evictions in California is done by a serial evictor who has ostensibly gone out of the rental business multiple times in order to evict tenants from multiple buildings, Lee says. More than three-quarters of Ellis Act evictions are done by landlords who have owned their property for fewer than five years.
Historically, the Ellis Act has had a significant impact on the state’s housing landscape. The law has resulted in 27,000 evictions in Los Angeles since 2001 and 5,400 in San Francisco since 1994, according to the Anti-Eviction Mapping Project. The Ellis Act is typically used on smaller buildings, which can be more easily converted into condos.
In San Francisco, the total number of evictions, and to a lesser extent the number of Ellis Act evictions, was on a downward trend even before the pandemic. In 2015 there were 2,300 evictions and 154 Ellis Act evictions in The City, according to San Francisco Rent Board data. In 2020, there were just over 700 evictions and 73 Ellis Act evictions.
After stalling last year, AB 854 passed out of an Assembly committee Wednesday, but there’s still a long road ahead. It needs to clear one more committee next week before heading to the full Assembly, where it must pass by the end of the month. After that, it needs to pass the state Senate and receive Gov. Gavin Newsom’s signature.
Ellis Act reform has proved difficult due to opposition from landlords, who represent a powerful interest group in Sacramento. In a statement of opposition, California Apartment Association spokesperson Debra Carlton said the Ellis Act provides an important safety valve for small landlords who can no longer afford to maintain their property. She added that the law has enough guardrails, including rules requiring 365-day notice and buyouts for tenants, as well as regulations preventing properties using the Ellis Act from being offered on the rental market.
“Don’t harm those small property owners who have struggled through the pandemic and will face a bank takeover or default in taxes if you limit their option to sell,” Carlton said.
The bill “still respects the long term rights of landlords,” Lee said in response. “We’re saying the Ellis Act is for mom-and-pop landlords who in good faith want to get out of there, not for bad-faith property speculators.”
While Lee hails from San Jose, AB 854 still has strong San Francisco backing. It is co-sponsored by the Tenderloin Housing Clinic, and co-authored by Assemblymembers Phil Ting and David Chiu, who just departed the Assembly to become San Francisco’s City Attorney.
The bill largely follows the template set out by San Francisco’s then-state Senator Mark Leno, who put forward an Ellis Act reform bill in 2014. That bill, co-sponsored by Mayor Ed Lee, also would have banned Ellis Act evictions within five years of purchasing a property, but would have only applied in San Francisco. It passed the Senate only to fall short in the Assembly.
Also in 2014, Tom Ammiano, San Francisco’s representative in the Assembly, put forward a bill that would have allowed cities to enact moratoria on Ellis Act evictions. It died in committee. There have since been several more unsuccessful attempts to amend the law.