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In a major step forward for Ellis Act reform, Senator Leno's bill to stop unfair Ellis Act evictions in San Francisco passed the Senate Transportation and Housing Committee today. SB 1439 closes a loophole in the Ellis Act that allows speculators to buy rent-controlled buildings and immediately begin the process of evicting long-term renters. The bill is co-sponsored by San Francisco Mayor Edwin Lee and Tenants Together, and is supported by numerous local businesses, labor groups, elected officials, senior organizations, and tenant advocates.
Tenants from San Francisco rallied on the steps of the Capitol before the hearing and packed the hearing room. Numerous community organizations including Chinatown Community Development Corporation, Community Tenant Association, Mission Economic Development Corporation, Housing Rights Committee of San Francisco, Bill Sorro Housing Program, and Asian Americans Advancing Justice were present to support the bill at the hearing.
"California's Ellis Act was specifically designed to allow legitimate landlords a way out of the rental business, but in San Francisco this state law is being abused by speculators who never intend to be landlords," said Senator Leno, D-San Francisco. "As a result, longtime tenants, many of them seniors, disabled people and low-income families, are being uprooted from their homes and communities. The five-year holding period in my bill would prevent these devastating evictions from forever changing the face of our diverse city."
SB 1439 authorizes San Francisco to prohibit new property owners from invoking the Ellis Act to evict tenants for five years after the acquisition of a property. The bill also prohibits property owners that exit the rental housing business through the Ellis Act from later using the Act on new properties they acquire.
"Senator Leno's bill gives us the critical tools we need to stop unchecked real estate speculators from taking advantage of longtime San Francisco renters," said San Francisco Mayor Ed Lee. "Together, we have built a large coalition of tenants, labor and business leaders to fight this battle in Sacramento to keep working families and longtime San Franciscans in their homes."
A new report from Tenants Together, California's statewide organization for renters' rights, reveals that most Ellis Act evictions in San Francisco have been initiated by investors, not landlords. "Our research leaves no doubt that speculators are abusing the Ellis Act in San Francisco," said Dean Preston, Executive Director of Tenants Together. Tenants Together's report, The Speculator Loophole: Ellis Act Evictions in San Francisco, released last week, is available online at www.tenantstogether.org/ellisreport.
Ellis Act evictions have surged in San Francisco, with hundreds of households being displaced last year. Enacted as state law in 1985, the Ellis Act was intended to allow long-term landlords to retire from the rental business. However, the Act has become a favorite tool for speculators that buy buildings, evict all tenants, and then convert the buildings to tenancy-in-common (TIC) units for resale on the market. These evictions disproportionately displace disabled and senior tenants. 71% of buildings targeted for Ellis eviction have disabled or senior tenants.
Senate Bill 1439 passed the committee with a 6-4 vote. It will be heard next in the Senate Judiciary Committee.