Multiple owners of a multi-unit, tenant-occupied building will sometimes invoke the Ellis Act in order to terminate tenancies so that each owner can live in a particular unit in the building. While each owner would own a percentage of the entire parcel/building, each will enter a contract (known as a “TIC” or “tenancy-in-common” agreement), which will allow them to designate a specified unit to a particular owner.
In 2001, San Francisco sought to prohibit this practice by adopting Ordinance 161-01, amending the Subdivision Code to eliminate “exclusive rights to occupancy” (i.e., designating that a particular owner was allowed to use a particular unit) and requiring that TIC agreements be recorded for purposes of enforcement/regulation. The logic of the amendment was that, if multiple owners cannot exclude other owners from their own units, the TIC rights would essentially be valueless, and maintaining buildings as rental units would be the preferred use.
Then Mayor Willie Brown vetoed Ordinance 161-01, citing concerns as to its validity and wisdom, but the Board of Supervisors overrode his veto. TIC owners challenged Ordinance 161-01, alleging that it violated the Ellis Act, as well as their rights to privacy.
The First District Court of Appeals affirmed, in the published decision Tom v. City & County of San Francisco (2004) 120 Cal. App. 4th 674, finding a protected “autonomy privacy” interest in “choosing the persons with whom a person will reside, and in excluding others from one’s private residence”. Meanwhile, it found that the City’s choice to preclude homeowners from going out of the landlord business under the Ellis Act was not a sufficient countervailing interest justifying such an extreme privacy violation.