While San Francisco’s previously adopted law which required landlords who invoke the Ellis Act to pay evicted tenants an upfront sum equal to the difference between their current rent and a similar market-rate unit over the course of two years was ruled unconstitutional, Supervisors Campos, Kim and Avalos have drafted a similar sounding ordinance, but with a couple of important distinctions.
As proposed, the ordinance would still require that landlords pay their evicted tenants an upfront payout equal to the difference between the rent paid by an evicted tenant and the market rent for a similar unit over the course of two years, but the relocation payment would be capped at $50,000 per unit.
In addition, tenants would be required to submit a sworn statement of their intent to use their relocation payments solely for housing or other relocation costs; would be required to keep proof of their relocation expenditures (which would include higher monthly rent payments); and would be required to reimburse their landlords for any portion of their relocation payment which was not used on housing or relocation costs within three years of being evicted.
As we noted the last time around, while California’s Ellis Act allows landlords to withdraw their properties from the rental market, for whatever reason, it also provides local governments with the power “to mitigate any adverse impacts on persons displaced by reason of the withdrawal.”
The previously adopted law failed by overreaching and positioning itself as an act “to combat displacement.” From the ruling which struck it down:
San Francisco’s housing shortage and the high market rates that result are significant problems of public concern, and the City legislature’s attempts to ameliorate them are laudable. “[B]ut there are outer limits to how this may be done. A strong public desire to improve the public condition [will not] warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.”
By specifically focusing on relocation expenses, expenses which are currently capped at $15,795 per unit (plus $3,510 per disabled or elderly tenant) and haven’t escalated with the city’s rapid rise in rents, the newly drafted law to mitigate the adverse impacts of being displaced will be much more difficult to defeat if it’s adopted by San Francisco’s Board of Supervisors and the Mayor.