02/26/2014
Someone created a sidewalk stamp outside the S.F. building where Tom Rapp received an Ellis Act eviction notice. Photo: Liz Hafalia, The Chronicle
San Francisco's housing crunch has reached Sacramento.
Faced with a surge in evictions and stratospheric prices for homes and apartments, two San Francisco lawmakers are now pushing separate bills in an effort to amend the state law that property owners used to evict hundreds of households in the city over the last year, often to put the apartments up for sale.
State Sen. Mark Leno, D-San Francisco, is introducing a bill Monday at the request of Mayor Ed Lee that is designed to prevent speculators from buying up apartment buildings, kicking out the tenants, and flipping the units for sale.
Leno's bill, which would apply only to San Francisco, would force buyers to own a building for at least five years before they evict tenants using the Ellis Act, a state law that allows an owner to kick out renters if he or she takes the building off the rental market.
The law was originally intended to allow owners to exit the rental business rather than be forced to remain a landlord. But what Leno describes as a "loophole" in the law is now being exploited by cash-hungry buyers who were never in the rental business to begin with.
"In recent years, speculators have been buying up properties in San Francisco with no intention to become landlords but to instead use a loophole in the Ellis Act to evict longtime residents just to turn a profit," Leno said in a statement. "Many of these renters are seniors, disabled people and low-income families with deep roots in their communities and no other local affordable housing options available to them. Our bill gives San Francisco an opportunity to stop the bleeding and save the unique fabric of our city."
Bill to allow moratoriums
State Assemblyman Tom Ammiano, D-San Francisco, on Friday introduced a bill that would allow local jurisdictions - through the Board of Supervisors or a public vote - to enact a moratorium on Ellis Act evictions when the housing supply can't keep pace with demand. Ammiano's bill, AB2405, would also hide no-fault evictions from tenant records or credit checks.
"Experience shows you can't build your way out of an affordable housing crisis," Ammiano said. "We have to do what we can to preserve what affordable housing we have. This is one piece of that effort."
San Francisco's housing situation, which Lee described in his State of the City address last month as a "genuine crisis," has mobilized elected officials across the city's Democratic-dominated political spectrum, although their approach has been different.
Lee, among other things, has called for 30,000 units of housing to be built or refurbished in the city by 2020. It's unclear whether that will have a meaningful impact on rents, which are the highest in the nation, or home prices in a city where the median price for a two-bedroom home is around $970,000.
Preserving the existing rental housing stock where units in older, multiunit buildings are protected by rent control, which regulates rent increases and keeps them well below market rate after a few years, is also a priority of Lee, Leno, Ammiano and others.
The city's rent-control housing supply has decreased by 1,017 units in the last two fiscal years for various reasons, including apartments converted for sale, taken off the rental market by the owner or replaced with new construction not subject to rent control, according to a report by the city controller in December. Tenant advocates and some analysts said the report was undercounting the units lost.
In the meantime, development has been stagnant for years, in large part due to the economic recession, but also political opposition to taller, denser development in they city.
What kind of traction Leno's and Ammiano's bills will be able to generate in Sacramento remains to be seen.
Pitched battle expected
The concerns about Ellis Act evictions are largely confined to San Francisco, and real estate interests and property owner groups are expected to wage a pitched battle.
"Small property owners shouldn't be held responsible for the government's failure on housing," said Janan New, executive director of the San Francisco Apartment Association, a landlord trade group. "The overarching concerns is that this administration and our two state elected leaders have is continual punishment of small homeowners."
Some previous attempts to amend the Ellis Act, including a similar bill authored by Leno that would have required five-year ownership before allowing evictions, have failed in the legislature.
Supporters of the current bills say this time around the atmosphere is much more acute.
"We in San Francisco are at the peak of a housing crisis that is years in the making," Lee said in an e-mailed statement. "Reform will open up new opportunities to build housing so our residents and our families can stay in the city. We must take these steps now, and in the coming weeks in Sacramento, to keep residents in their homes and protect them predatory evictions by real-estate speculators."
Real problem missed
Blaming speculators, though, misses the real problems with housing in San Francisco, where landlords can't charge market-rate rent on many units and middle-class residents have few avenues for affordable home ownership, New said.
"The true story of the Ellis Act is a story about government over regulation and owners that have been capped at a 1 percent rent increase since the early 1990s," New said. "They can't keep up with inflation."
Tenant advocates, city supervisors and others have lamented that San Francisco loses part of its charm and characters when artists and other creative types are forced out because they can't afford to live here anymore.
But removing rent-controlled units from the market and converting them for sale as condominiums or tenancies in common, a similar type of ownership, doesn't remove housing from the city, New said.
"We're not losing any housing stock. The buildings aren't going away. They're just converted for people who want to buy homes," New said. "It's the middle class, that's who buys these buildings. It's people who have children and want to stay here. And they have no homeownership opportunity. We're not building any homes for them to buy."
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