A recently-enacted law in The City that requires landlords to pay up to $50,000 in relocation fees to evicted tenants has been struck down in San Francisco Superior Court.
Judge Ronald E. Quidachay on Friday ruled against the ordinance, which was enacted May 15 but applied retroactively to June 1, 2014, to tenants whose units were removed from the rental market under California’s Ellis Act, in which a landlord can evict tenants from rent-controlled housing in order to exit the rental business.
Ellis Act evictions have been widely blamed for contributing to The City’s housing crisis, but in his ruling Quidachay called the ordinance unreasonable and unenforceable.
“As these payments have no relationship to the adverse impact caused by a landlord’s decision to exit the rental market, and because they call for a more than 300 percent increase over the prior lawful relocation assistance scheme, they are not ‘reasonable’,” the judge wrote.
San Francisco attorney Andrew Zacks, who represents the group of local property owners that filed the lawsuit, noted that Ellis Act evictions are not the sole cause of the housing crisis.
“It’s such a small part of the problem we’re dealing with; it’s become a symbol in San Francisco,” Zacks said of Ellis Act evictions. “The real problem is we don’t have enough housing.”
The ordinance entitles each tenant displaced by an Ellis Act eviction to the existing, inflation-adjusted relocation payment of $5,555.21 up to $16,665.59 per unit, plus an additional $3,703.46 for each elderly or disabled tenant. Alternatively, the tenant instead could be entitled to the difference between the tenant’s current rent and the market-rate rent for a comparable apartment for two years. Relocation payments would be capped at $50,000.
“Most of the landlords who are dealing with this problem have been subsidizing their tenants for years already,” Zacks said. “It’s not the individual property owner’s responsibility to house their tenant.”
Zacks added the ordinance, which had been unanimously approved by the Board of Supervisors, follows a previous attempt by city officials to require property owners to subsidize tenants’ rent for two years, for an unlimited amount of money. That ordinance was also struck down in court.
But Supervisor David Campos, who co-authored the most recent ordinance, said the case will be appealed as part of The City’s effort to better protect tenants amid the housing climate.
“This is a pretty reasonable and measured response to our housing crisis,” Campos said of the ordinance. “In the midst of the worst housing crisis in the history of The City, it is appropriate for The City to put forward reasonable measures that try to help people have a fighting chance to stay in San Francisco.”