For the third time, Senator Mark Leno’s proposed legislation to curb speculative Ellis Act evictions in San Francisco appears headed for defeat, as the Senate’s Housing Committee rejected Senate Bill 364 yesterday in a 6-5 first vote.

As we wrote when SB364 was introduced earlier this year:

Having fallen one vote short last year, and failed in 2007, Senator Mark Leno has once again introduced legislation to curb speculative Ellis Act evictions in San Francisco.

Mirroring Leno’s previously proposed Senate Bill 1439, which was approved by the Senate but rejected by the Assembly Housing Committee, Senate Bill 364 would prohibit new property owners from invoking the Ellis Act to evict tenants for at least five years from the date the owner acquired the property and prevent landlords from acting as serial Ellis Act-ors.

As plugged-in people know, a similar bill which was proposed back in 2007 never emerged from the Senate Floor.

No word on Leno’s strategy for passing the bill this time around.

Leno will have a second chance to persuade the Senate’s Housing Committee to allow SB364 to move forward to the Assembly.  But once again, still no word on Leno’s strategy for passing the bill this time around.

30 thoughts on “Ellis Act Legislation, And Rejection, Déjà Vu”
  1. Reading this as Beck’s “Loser” is playing in the background…taa nana nanaaaa…

    And my time is a piece of wax
    Falling’ on a termite
    Who’s choking’ on the splinters

    heh heh 🙂

  2. This is really a solution in search of a problem. Chron piece noted that Ellis evictions are down 50% in the last year (from an already low number) – only 113 in the last 12 months in a city of 800,000. This is a big waste of time – all politics and no substance.

  3. Severely below-market tenants have to accept that their privately subsidized housing is not secure – and never will be. Hopefully they have saved money for alternative housing when inevitable change comes their way.

  4. If this thing somehow someway passed, what’s to stop a seller from Ellising the building before putting it on the market? Or buyer putting a clause in the contract to have the building delivered vacant and can even pay for the seller’s cost to conduct Ellis before transferring the property?

    1. I imagine some sellers would be reluctant to do this. They’re probably more susceptible to social pressures than investors. Others might be estates, foreclosures, etc.

  5. locally renters outnumber owners. too many people feel left behind by this economy. politicians pander. don’t expect “the ideas” behind “this fix” to go away.

    this lot of politicians just doesn’t understand how collective decisions, or efforts, have made things so much worse – so they have no qualms about trying to “fix” things further.

    if Leno can buy votes through water politics or other backroom promises, this goes to the courts.

  6. SF city leaders created $3400 / 1bedrm. If u limit/restrict/delay development for years and years and years…this is what happens…so those complaining about Ellis Act…sue the City (and u will fail as well) for putting u at risk!!!

  7. One thing that would slow Ellis evictions would be to allow rent increases = 100% of inflation – instead of the current limit of 60% of the CPI. The current system virtually guarantees huge pressure to evict.

    1. But inflation is national and is far from reflecting the reality of SF.

      Rent control is simply anachronistic in the 20th century and creates the high prices that trigger Ellis evictions!

    2. San Jose rent control allows increases of 8% per year, which prevents tenants from some abusive acts and wild swings, while also preventing the rent from getting too distorted from the market rate over time. San Francisco rent control was at least somewhat similar until 1992, where the minimum allowable increase was 4%. But now that rent increases are limited to just a fraction of inflation, the landlords get increasingly squeezed as their costs increase while the amount they can charge barely budges.

  8. I hope my letters to the Senators helped. Why should hard working people who have scrimped & saved be subjected to this bill.

    This bill is bad for everyone who doesn’t feel they are entitled to be subsidized.

    This is America, thankfully the rest of California will kill this at the State level, or yes as one reader mentioned it will get through out in court. (Just like all all Campos’s other ridiculos proposals).

    So long Leno, and Campos is out next.

  9. If Leno fails as he deserves, it is time for landlords to flex their muscle. Elis them all I say! Let’s make SF a city for the super rich where millionaires live in 4 unit mansions.

    1. By the way, why not Ellis? It creates a feedback loop of demand. It is like free $. If the gang of 4 create laws to promote gentrification, go along and pick up that cash.

  10. Question: How does Leno and Ammiano get voted into office? Because of their platforms? Or because they are gay? I am curious if it is the latter, would Peter Thiel win if he ran for office?

    I only mention this because I found David Chiu’s political ads which targeted the Chinese votes to be hilarious — nothing about the issues, just solely focused on the fact he went to Harvard. With Jane Kim, she is photographed wearing a red dress in blanket mailers wishing Chinese voters a happy Chinese New Year.

    1. If issues are often double-edged, require critical thinking, and making tough decisions, then I am with the voters: show me the fluffy stuff and entertain me. Have the Supervisor candidates put on red-dresses, sport leather chaps, behead papier-mache “bad guys”.

  11. I raised my tenants’ rent by 35% over the past two years in response to a strong rental market in this area (Peninsula). The added cashflow allowed me to refinance, pull out cash and buy another rental property thereby growing my empire. If we had rent control down here this growth in my rental income would never have been possible. The entire concept of rent control is an abhorrent communist plot to take wealth from those who deserve it and give it to tenants who do not deserve anything.

    1. Good for you. My family did the same thing in the 1970’s in SF. It is much harder to replicate their business plan nowadays but not completely impossible. Gotta make most with the hand you’re dealt. My favorite line ( Lisa Vanderpump from Real Housewives of Beverly Hills): throw me to the wolves but I come back leading the pack.

    2. good for you, not so good for your tenants. This is why rent control is popular – in a hot market tenants have no protection from getting priced out. Same thing for Prop 13 – rapidly accelerating property values are great for sellers but not for folks on fixed income facing rising taxes. Even if both represent “bad” economics, they will gain wide political support. Every landlord that takes advantage of the hot market to raise their rents 8x inflation drives another renter to support rent control.

      1. Yes, this, of course, was the driving force behind implementing rent control in the first place (in fact, that was relatively benign by comparison as inflation was driving up rents rather than landlord profiting).

      2. All very true. As a landlord myself (albeit a small time landlord), I can see that there are legitimate aspects to the rent control such as limiting annual increases (not to 60% of CPI, however) that can create some stability for tenants. However, the current antagonism between landlords and tenants does nothing to allow for a reasonable compromise to address some of the more punitive aspects of the ordinance. The distrust and outright hatred between the more extreme elements on both sides is pretty distasteful and only further polarizes the population.

  12. Well in fairness to myself, I did not raise rents as much as the market would bear; my rents are still about 10% below market simply because I do not want to spend what it would take to catch up on all the deferred maintenance on my rental properties if my current tenants were to leave. So tenants still have a small amount of economic power, mostly on marginal issues like this. They pay steadily and on time and never complain which are also points in their favor and so they earned themselves a small break on the rent at least for another year.

    In another property right now I am doing a full remodel on a nice house in a prime school district with the intent of attracting a well-heeled family that cares about their kids education, their living conditions and has $5000/mo to spend on a 3-bedroom house. So I am spending $100k in that case to both rectify 60 years of neglect and also get the right kind of people living in my houses. Supply and demand is a two-way street. Except of course in San Francisco …

    1. Wow, $100K on a remodel for a rental. Unfathomable in SF. If you sold the house in the prime school district, how much would you gain? Then again if you did sell, it would be difficult to find another investment vehicle which yields the same returns.

      1. I would net about $350k on the sale in the current market. But I think I will get a lot more after a 10-year hold. Time will tell if I am right 🙂

        1. You’re too modest. Prices will appreciate in 10 yrs. $100K sounds like a lot but you can recoup the costs in less than two years assuming $60K in annual rents + you enjoy the added equity. Good deal.

  13. I certainly don’t know all the details, but shouldn’t the dividing line btwn having to pay someone to leave & not having to pay be in what you’re doing with the property? EG: buying a house in which to raise your family (except of course no one here would support that bc SF is crammed with kid-haters) and already spending every cent you’ve managed to save for 10+ years bc you’re in a bidding war against an all-cash techie vs. said techie or other buyer just buying a business venture, to act as a landlord. In the former instance, you probably don’t have a spare $30-$50K, whereas in the latter instance, nor only do you probably have it (as a speculator), but you can recoup it in your rental rates.

  14. SF Housing – the rich get richer – the poor get a free/cheap ride -and ZERO for the middle class who are not grandfathered into some sort of special protection category by the well meaning but disconnected from reality politicians.

    Thanks to these policies we have become on of the LEAST equal cities in the country.

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