Landlords Sue SF Over Plan To Increase Relocation Payments For Displaced Tenants

Property owners, landlord groups and their attorney announced a lawsuit this morning against a new San Francisco law that bumps up relocation assistance payments owed to tenants evicted under the state’s Ellis Act.

California’s 1985 Ellis Act allows landlords to remove rental units from the market and evict the tenants who occupied them. It also allows cities to take measures to mitigate the impact on tenants.

This spring, the San Francisco Board of Supervisors approved a revised ordinance authored by Supervisor David Campos to increase the payments landlords must provide to tenants evicted under the state law.

The new measure, which went into effect June 1, requires landlords to pay an amount equal to the difference between the tenant’s current rent and the cost of comparable housing in the city for two years.

Campos created the legislation to address issues with property owners using the Ellis Act to evict rent-controlled tenants from their homes to repurpose the building as condominiums or sell the building for a profit.

The lawsuit filed today in federal court claims that the new law “flagrantly violates” constitutional property rights, said Pacific Legal Foundation attorney J. David Breemer, who is representing the plaintiffs.

Breemer and the lawsuit’s plaintiffs spoke at a news conference outside the Phillip Burton Federal Building in San Francisco this morning after filing the suit.

Plaintiffs Daniel and Maria Levin, who own a two-unit building in the 400 block of Lombard Street and live in the top unit, said at the news conference that the law requires them to pay $118,000 to a downstairs tenant so they can remodel the building and use both units for themselves.

Daniel Levin said the couple are small business owners who have worked in San Francisco for 20 years and “we simply can’t afford the huge sum the city demands we pay. We would like to occupy the whole house.”

Maria Levin said the couple wants to get out of the rental business but city politicians are “using us as pawns” in their attempt to keep units on the rental market.

Another landlord plaintiff, Park Lane Associates, says the law will force it to pay $1.45 million to the occupants of 15 currently rented units before it can convert a 33-unit building to a tenancy-in-common property.

Breemer argued that the relocation assistance money can go toward any use, not just toward a new lease or moving and property expenses.

“The money doesn’t have to go to toward rent…it can be spent any way,” he said.

He said the law is forcing landlords to stay in the rental business, a violation of the Ellis Act.

“They are being forced to serve as landlords because these sums are unaffordable,” he said.

Other plaintiffs in the case are the San Francisco Apartment Association and Coalition for Better Housing.

SFAA executive director Janan New said homeowners, such as the Levins, should not be blamed for the housing crisis in San Francisco.

“It’s the government’s responsibility to solve the housing crisis that they themselves have created,” New said.

Coalition for Better Housing president David Gruber said the new legislation is being misinterpreted. He said he favors the previous system that set a fixed amount landlords owed to evicted tenants to help with relocation.

Until the new law passed, landlords were required to pay tenants between $5,265 and $15,795.

Campos, the law’s author, said the law was “legally sound.”

“It’s a very measured ordinance that follows the very clear guidance that we had received from courts, that we are able to have relocation costs for the purpose of helping people who are evicted stay in San Francisco,” he said.

“We certainly expected to be sued but we also expect to win in court,” Campos said.

The lawsuit seeks a court declaration that the measure is unconstitutional and an injunction barring the city from enforcing it.

Sasha Lekach and Julia Cheever, Bay City News

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  • Zephyros California

    Awww… boo hoo for the poor plaintiffs who own a building worth MILLIONS and have to pay REASONABLE relocation fees to the folks they’re kicking out who have been there for years and whose lives are being totally disrupted and possibly ruined because housing is so out of control they may not be able to stay in San Francisco and have no idea what they’re going to do…. and all so the owners can have twice as much space for their ski equipment and a new wine cellar. Sorry people but your situation is the MASSIVE exception. This law is being used and abused massively so that property owners stand to make MILLIONS more when they sell. Yeah, I think these people can easily afford, and SHOULD pay up the butt, the new relocation fees for turning their tenants lives into a living hell. Your property right should STOP when you’re affecting peoples livelihoods and potentially causing many of them to actually be homeless.

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    • Jake Stein

      The landlord owns the building. The tenant agrees to pay rent and not own the building or take a financial interest in it. What part of that do you or Campos not get? The landlord has rights and the more people like Campos trample on those rights, the more landlords will rebel and vacate their properties or jack their rents up to the sky once vacated. You have no clue as to what it is to own rental property and the amount of money it takes to run it. With idiotic laws such as rent control and forcing landlords to comply with moving costs not only ruins the rental market, it decimates any future housing owned privately to where you have government housing and you know how scummy that becomes. That is where your leaders in SF are driving you. FYI, I also believe if Campos and others believe so strongly in these moving costs, let Campos put his money where his mouth is and pay up out of his own pocket and help these renters. You will see he doesn’t believe that strongly in it when it comes to his own financial well being.

  • Zephyros California

    Also… I should have made clear: the plaintiffs claim that they have to pay ONE person $118,000 is an absolute lie and virtually impossible. And yes I know first hand about this because my scumbag landlords are ATTEMPTING to Ellis Act me right now and I’ve been in contact with David Campos’ office when they were writing this law. The new law requires landlords to pay the difference between what you’re paying now and what your apartment will fetch if it’s vacant…. x24 (months). I’ve lived in my place for 19 years, I have a huge flat and the rent would almost triple if I moved out… and I’m only slated to get $27,000. If this one person is getting $118,000 that means the difference between what their unit would go for on the open market and what they’re paying now is $5,000. Unless this person lived in the unit for 60 years and pays $100 in rent, this amount is absolutely impossible. And of course they’d twist the truth and lie about it to try and win. Typical scumbags.

    • Jake Stein

      Why are your landlords scumbags if they are exercising their rights as a property owner? Sounds like a lot of jealously and envy of those that have, as usual so you want to see them punished and you have a socialist in the name of Campos to rally around. You are ” only slated to get $27,000″. Do you realize that if such an insanity in babying tenants in this way catches on you can kiss the rental market goodbye as no sane landlord will rent their residential property out anymore. Stupid left wingers and their backwards anti capitalistic ways, they actually cause the very problem and then try to solve it. It’s people like Campos that will drive rents into the stratosphere and cause rental housing shortages, not the contrary. LOL

    • Victor Cachat

      Wah!
      Look at where your lefty politicians and their wacko ideas got you.
      Housing was affordable before leftism took that area over.

  • njudah

    There’s a lot of stupidity going around on all sides. The way to fix or change or repeal the Ellis Act is at the state level. Period. These kinds of weird laws make people feel good during Assembly races when people like Campos are running on the public dime and need “feel good” things to put on junk mail, but even if it passes the courts will likely toss it out.

    That said , there are some really bad landlords inSF who do incredibly stupid shit that ruin it for honest ones, same with tenants. Personally I wish we could put all the asshat tenants and landlords together let them fight it out , hunger games style, and the rest of us can live in peace and sans bullshit.

  • https://twitter.com/peternocturnal peternatural

    How can the new law “flagrantly violate” property rights, when all it does is update the price of evicting a tenant? $15,000 is fine, but $25,000 is a flagrant violation of fundamental rights? WTF?

    • Victor Cachat

      You have no right to stay in someone else’s property when they want to end the contract.
      None.
      Your supposed “rights” only exist in the fevered minds of leftist politicians.
      And they certainly don’t owe you a single dime when they say “bye bye!” (except for the security deposit).

  • Victor Cachat

    So, you get penalized for charging low rents?
    For allowing tenants to stay a long time?
    Here’s a thought: Boost the rent every freaking chance you get and take every d*mn unit off the market as soon as someone voluntarily leaves.
    In the end, there will be no rental units.

  • Nathan

    I don’t think the entire system of ownership is right so you may not want to read any further. I understand that the Levin’s “want’ to have more space but there are other humans that are living in that space that would not be able to find another space in the city. That’s where it ends for me. we are all here living together and the idea that the Levins or any “owner” for that matter believe that its alright to force people out simply because they “want more space” is wrong. So yes make them pay for that horrid privilege of forcing fellow humans to seek shelter elsewhere.Small price to pay.