Category Archives: Ellis Act

Ellis Protesters Succeed in “Bank Shaming”

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SocketSite reports that First Republic Bank will no longer knowingly finance “displacement mortgages“. The bank announced that their loan application will now question whether the prospective borrower plans to invoke the Ellis Act to terminate tenancies in the building.

This news follows a protest at the bank’s headquarters in San Francisco this afternoon, where supporters gathered around the remaining occupants of a Coleridge Street property that was withdrawn from the rental market earlier this year, to chastise the bank for writing loans for buildings – like the one on Coleridge Street – that have been Ellis’ed.

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Ellis Act Gets Attention of U.S. Representative Waters

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Congresswoman Maxine Waters, who represents California’s 43rd District, has called for an end to the Ellis Act on a statewide level.

In her letter to the President pro Tempore and Speaker of the California State Senate, she urges that, during California’s worst housing crisis in history, the Ellis Act is being used by real estate speculators for mass evictions of mostly elderly tenants, instead of for small time landlords who simply seek to retire from the rental business. Waters’ district is located in Los Angeles County, where, she notes, there were 725 Ellis Act evictions in 2014 alone (compared to, for instance, 113 in San Francisco that year).

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City “Complying” with New Ellis Act Enhanced Relocation Assistance Law

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Under the new enhanced Ellis Act relocation assistance payment law passed by the Board of Supervisors last month, a landlord seeking to withdraw rental units from the rental market must pay up to $50,000, per rental unit, based on the “market rate differential” that the displaced tenant faces on the open rental market.

To determine this number, the new law requires the City Controller to provide market rate data for studios, one-bedrooms, two-bedrooms and three-bedroom apartments. This number, minus the tenant’s rent, times 24 months is the new “relocation payment”.

A previous attempt by the Board of Supervisors to require that landlord’s pay two years worth of rent subsidy was overturned last October in Levin v. CCSF. In an apparent effort to address the concerns of Judge Breyer, the Board of Supervisors capped the new relocation payment (which, under the previous version, could have easily been six-figures) at $50,000, and they require that a tenant provide their landlord with a signed declaration where they promise to use the funds for housing after they’re displaced.

The new law came online on June 14, 2015, and it required the Controller and the Rent Board to produce market data and the Declaration form, respectively, by June 19, 2015. While the Rent Board’s official position at the beginning of last week is that the City was not required to comply with the law, pending its appeal of Levin v. CCSF, it released this statement on Friday, in time to provide the necessary documents and data.

However, they are offered “for informational purposes only”. While there wasn’t a Schoolhouse Rock episode specifically about what happens when your city legislature passes a sequel to a law under review by the 9th Circuit, the subtext here seems to be that a landlord should comply anyway, unless and until the new law is also successfully challenged in the judicial branch.

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San Francisco’s Proposition G: “Anti-Speculator” Transfer Tax on Multi-Unit Property

San Francisco’s Proposition G would impose a five-year descending transfer tax rate on multi-unit residential property in an effort to deter speculation. Tenants cannot be evicted merely because building is sold, so the aim of this measure is to stop the use of the Ellis Act to terminate tenancies and sell owner-occupied Tenancy-in-Common units. Proposition G follows San Francisco’s recent effort to frustrate use of the Ellis Act by significantly increasing the statutory relocation assistance payment. San Francisco has also attempted to undermine TIC sales directly by eliminating contractual exclusive rights of occupancy.

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