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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