Category Archives: San Francisco

SFGate: Artist Gets Eviction Notice in the Wake of Ghost Ship Tragedy

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It is not uncommon tenants of non-residential rental spaces to actually be living in the unit. These occurrences can range from the innocent (landlord doesn’t realize they never obtained a certificate of final completion on the new construction) to the handshake deal (tenant renting a logically divisible portion of a single family home with its own sink and stove) to the aggressive, unapproved highest use of a property.

In the wake of the tragic Ghost Ship fire, Bay Area landlords are cracking down on unpermitted use. The SF Chronicle reports on a use of a warehouse as an apartment/dance studio, and a landlord’s efforts to terminate the tenancy and end the unpermitted use.

In this particular case, the landlord is relying on a 30-day notice of termination. Generally, an established residential tenancy requires a 60-day notice, and, in San Francisco, also requires “just cause” (for instance, that the landlord is taking it off of the residential rental market or has permits to demolish the space).

It has been evident for some time that an unpermitted space may still be subject to residential rent control ordinances if it is rented to a residential tenant for residential use. A recent Appellate Division case out of Los Angeles has also clarified that a landlord may not enforce conventional lease obligations – like paying rent – against a residential tenant in an unpermitted unit, because the contract is considered void.

It is very likely that a court would consider the residential use of this dance studio sufficient to earn the hallmarks of residential tenancies in San Francisco – namely, that they require just cause to terminate. (It would follow that, under state law, 60 rather than 30 days’ notice to vacate for residential tenancies would be required.) The landlord may need conditional use to remove the “unauthorized unit” or have to invoke the Ellis Act to remove the building from the residential rental market.

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San Francisco Legislative Update (2016): Landlord Discrimination in Internet Service Providers Prohibited

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The San Francisco Board of Supervisors unanimously passed Ordinance 250-16, prohibiting ISP monopolies in “multiple occupancy buildings” (meaning more than four residential units), in what the SF Chronicle believes to be the first of its kind enacted by a U.S. city.

Ordinance 250-16 adds article 52 to the SF Police Code and mandates such bold edicts as “No property owner shall interfere with the right of an occupant to obtain communications services from the communications services provider of the occupant’s choice”.

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SFAA v. CCSF – First District Court of Appeals Affirms Challenge to San Francisco Planning Code Ellis Act Discrimination

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“[R]ather than regulating the particulars of a landlord’s proposed merger (or demolition or conversion) of a residential unit, section 317(e)(4) prohibits a landlord withdrawing a residential unit from the rental market from merging the unit with another unit for 10 years. In doing so, section 317(e)(4) imposes a penalty on the very class entitled to protection under the Ellis Act – to wit, landowners seeking to exit the residential rental business. As such, under the legal authority cited above, section 317(e)(4) is indeed invalid.”

Division Three of the First District Court of Appeal affirmed the San Francisco Superior Court’s determination that San Francisco may not deny applications to merge dwelling units, under Planning Code section 317(e)(4), by property owners who have invoked the Ellis Act.

In San Francisco Apartment Association v. City and County of San Francisco, the SFAA challenged San Francisco Ordinance 287-13, which regulated the merger (i.e., joining) of two existing dwelling units, and which specifically prohibited approval for such merger when there had been a non-fault eviction within the ten years prior to the application (or an owner/relative move-in eviction within five years).

The then-existing version of San Francisco Planning Code Section 317(e)(4) provided that, “The Planning Commission shall not approve an application for merger if any tenant has been evicted pursuant to Administrative Code Sections 37.9(a)(9) through 37.9(a)(14) where the tenant was served with a notice of eviction after December 10, 2013 if the notice was served within ten (10) years prior to filing the application for merger.”

The challenge focused exclusively on the Ellis Act (as opposed to other non-fault evictions under the Rent Ordinance) because the Ellis Act is a state (not local) law (Cal. Gov., §§7060, et seq.) that “‘completely occupies the field of substantive eviction controls over landlords’ desiring to exit the residential rental market.”

Courts have traditionally viewed substantive eviction controls as the purview of local governments, while viewing state law (e.g., the unlawful detainer statutes) as occupying the field of procedural rules for evictions. This ruling illustrates the Ellis Act as an exception.

Division Three noted that, “the issue is whether the Ordinance enters into the field of ‘substantive eviction controls over landlords’ that has been reserved for the State”, essentially scrutinizing the impact of local laws imposing a penalty on the exercise of this particular type of eviction. In other words, cities can otherwise enumerate the allowable bases to terminate residential tenancies, but they must include the Ellis Act and they may not discriminate against it.

This decision potentially opens the door to challenges to a variety of Ellis Act “penalties”, including the recent “Accessory Dwelling Unit” ordinance, which allows property owners to create dwelling units out of unused space in existing properties… unless they’ve invoked the Ellis Act within the last ten years.

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San Francisco Legislative Update (2016): Accessory Dwelling Unit Ordinance Finds Additional Housing Stock in Existing Space

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San Francisco’s new “Accessory Dwelling Unit” law – adopted in Ordinance 162-16 – is another effort in the City’s broader plan of trying to squeeze additional dwelling units out of existing inventory. Accessory Dwelling Units (also known as “ADUs”, “Secondary Units” or “In-Law Units”) are defined as dwelling units entirely within the existing built “envelope” of an existing building. (In other words, with the exception of allowing small height increases when ADUs are built in conjunction with seismic retrofit work, the addition cannot increase the size/height of a building.)

The Planning Code distinguishes between buildings with four or fewer existing dwelling units and those with more than four. For the former, one ADU is permitted, while there is no limit for the latter, so long as the additions conform with the ADU rules. These rules include the following:

• An Accessory Dwelling Unit cannot be constructed using space from an existing dwelling unit. They also cannot be merged with another dwelling unit;
• They cannot be created in certain Neighborhood Commercial Districts;
• They cannot be used for Airbnb/short term residential rentals;
• They cannot be converted to condominiums;
• While ADUs are necessarily “new construction”, they are exempted from vacancy control prohibitions under Costa-Hawkins, and this is the case whether or not the building in which the ADU is located is also “new construction”;

ADUs are, however, prohibited where the property owner has performed an owner/relative move-in eviction within five years or any other non-fault eviction – like the Ellis Act – within ten.

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Airbnb Sues San Francisco over Recent Revision to “Airbnb Law”

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Airbnb has filed a lawsuit against San Francisco in Federal District Court, seeking to invalidate the recent expansion of enforcement tools to regulate short-term residential rental listings. Ordinance 104-16 now requires hosting platforms to verify that a residential unit is on the City registry prior to listing and to requires them to respond to requests for information from the City. Violations can lead to civil penalties of $1,000 per day, as well as certain criminal penalties.

Airbnb alleges that the new ordinance violates its rights under the Communications Decency Act, which “expressly preempts state and local laws that treat a website ‘as the publisher or speaker of any information provided by another information content provider’,” urging that, “instead of targeting speech, the City instead could simply enforce its existing short-term rental law directly against hosts who violate it”.

However, Airbnb also alleges that the new law violates its rights under the First Amendment, insisting that it is “a content-based restriction on advertising rental listings, which is speech”. Whether or not the new ordinance will survive judicial review as a constitutional economic regulation, it does seem inconsistent to advance a First Amendment argument while also disclaiming that listings are speech. And, in any event, simply verifying that a host has complied with the “Airbnb law” and obtained a listing number does not quite make the list of onerous restraints on speech. The Federal District Court also recently upheld the City’s buyout legislation, requiring a landlord to disclose certain rights to tenants concerning “buyout agreements” (offering money for the vacating of a rental unit) prior to having the discussion, against a constitutional challenge for restrictions on speech.

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City Attorney Sues SF Academy of Art for “Widespread, Longstanding and Blatant Disregard” for the Planning Code

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City Attorney Dennis Herrera is suing the San Francisco Academy of Art for what the City describes as “widespread, longstanding, and blatant disregard for the San Francisco Planning Code”. The complaint charges the Academy with having “cavalierly changed the use of over 22 buildings in San Francisco in violation of the Planning Code” by “acquir[ing] buildings that are zoned and permitted for use as apartments and other residential purposes, only to convert them unlawfully to student dorms, depriving San Francisco of critical housing stock, especially affordable housing”.

One possible upside of dormitory use for one of the City’s largest property owners is the exemption under the Rent Ordinance for otherwise covered rental units operated as dormitories by an “institution of higher education”.

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San Francisco Legislative Update (2016): New Defense to Owner Move-In Evictions for Students and Educators

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San Francisco has passed a much publicized amendment to the owner move-in provisions of the San Francisco Rent Ordinance to provide a defense for students and educators, in an effort to mitigate disruption during the school year.

The new language broadens the protection to include educators, as well as children, making it a defense to an eviction that a notice of termination of tenancy expires during a school year.

This defense now also extends to “educators” so long as the “tenant” with a family relationship to the educator has resided in the unit for 12 months. Presumably tenant attorneys will now expand their practice to include family law for last-minute marriages.

Ordinance 55-16 extends the defense to four other bases for non-fault evictions (including for demolition/removal of a unit, conducting capital improvement/ substantial rehabilitation work). This new exception does not apply when the landlord seeks to perform seismic work, under Building Code Chapter 34B, showing that the Board of Supervisors is aware some things are more important than the San Francisco housing crisis.

Finally, Ordinance 55-16 eliminates the former “trump card” where the landlord seeking to move in also has a child who will reside in the unit. Perhaps the move into a new home would also disrupt the studies of the landlord’s kid.

Despite some reports, this does not affect Ellis Act terminations.

You can read the full text of Ordinance 55-16 here.

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SAN FRANCISCO LEGISLATIVE UPDATE (2016): Conditional Use Approval Required for Removal of Authorized and Unauthorized Units

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San Francisco now requires conditional use approval (via hearing by the Planning Commission) for the removal of both authorized and “unauthorized” (i.e., unpermitted) residential units, under Section 317 of the Planning Code.

Ordinance 33-16, modifying Section 317 of the Planning Code, follows (and repeals) Ordinance 23-16, requiring conditional use authorization for removal of authorized and unauthorized units in the C-3 (Downtown Commercial) District.

If this description sounds an awful lot like a tenant’s use of a rental unit dictates its status as rent controlled housing, that might not be far off. (Seemingly, this would lead to the same result as in the 2014 appellate decision, Burien, LLC v. Wiley, notwithstanding a landlord’s innocence as to the illegal use.)

You can read the full text of Ordinance 23-16 here and Ordinance 33-16 here.

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