The Ellis Act is a California state law that grants landlords the unconditional right to evict their tenants in order to exit the rental housing business.[1] While on paper, the Ellis Act nobly protects the proprietary rights of landlords, in action, its unjust enforcement and devastating effects on tenants have made the law controversial. In this paper, I will discuss the disparity between the Ellis Act on the books—its history, content, and implementation—and in action—its procedures, enforcement, and court challenges. I will then examine the views of its supporters and opponents. Finally, I will provide an evaluation of the law and ideas for reform.
The Ellis Act was passed in 1986 in response to the California Supreme Court’s decision in Nash v. City of Santa Monica (1984).[2] In this case, Jerome Nash contested a city ordinance that required landlords to obtain a permit to remove their property from the rental market. This ordinance stipulated that landlords could only obtain such a permit if they met strict conditions.[3] For example, landlords had to prove that tenants of low or moderate income did not occupy the units and that by taking the units off the rental market, the city’s housing supply would not be negatively affected.[4] While Nash prevailed in trial court and on appeal, the California Supreme Court dismissed his case, ruling that the ordinance only placed minimal limitations on landlords’ rights and that its goals of protecting tenants and preserving the city’s rental housing supply were important public objectives.[5] In response to the Court’s decision, Senator Jim Ellis introduced the Ellis Act to the California legislature, which adopted it in 1986.[6]
The Ellis Act stipulates that public entities cannot compel owners of residential properties to offer, or continue to offer, their properties for rent or lease.[7] If landlords wish to exit the rental housing market, they must file a notice of intent to withdraw accommodations with a public entity and remove all their units from the rental market and evict all their tenants, without singling out any one unit or tenant. Landlords who re-rent their property within ten years of withdrawing it from the rental housing market are subject to a number of provisions. For example, they are liable to displaced tenants for damages caused by the eviction and must first offer these units to the tenants that they displaced.[8]
Public entities and landlords implement the Ellis Act. When withdrawing from the rental market, landlords must implement the procedures it sets forth. For example, they must file a notice of intent to withdraw their property and notify their tenants within the strict time frame that it specifies. Public entities implement the Act in response to its use by landlords. For example, if a landlord re-rents their property within ten years of withdrawing it, public entities can institute a civil proceeding against them for damages related to the displacement of tenants.[9] Thus, while the Ellis Act grants landlords the right to exit the rental housing market, it restricts their discretion in doing so. Conversely, it forbids public entities from controlling landlords’ use of their property, but grants them discretion in policing landlords’ use of the law.
While the Ellis Act essentially guarantees landlords the right to exit the rental housing market, local law influences procedure so that enforcement varies by locality. For the purpose of this paper, I will focus on the implementation procedure of the Ellis Act in San Francisco, which has established a step-by-step guide for enforcement.[10] First, landlords must file a Notice of Intent to Withdraw Residential Units from the Rental Market with the SF Rent Board 120 days before the date of withdrawal. Second, within fifteen days of filing, they must inform their tenants that they have filed, serve notices of termination of tenancy, and let them know their rights, such as to relocation assistance. (Elderly or disabled tenants, who have lived in the unit for at least a year, may give notice to the landlord within sixty days of their entitlement to an extension of the withdrawal date to a year. Landlords must give notice of these claims to the Rent Board within thirty days.) Third, within ninety days of filing, the landlord must give written notice to the Rent Board and their tenants about disputes with tenants’ claims to extension and approved extensions. Fourth, the landlord must record a Memorandum that summarizes the Notice of Intent with the County Recorder. Fifth, 120 days after filing, all tenants, except those whose extensions were approved, must quit the premises and all units must be withdrawn. Finally, within thirty days of the date of withdrawal, the Rent Board must record a Notice of Constraints, which imposes a five-year period of vacancy control, with the County Recorder. Landlords, who want to re-rent their property within ten years of withdrawing it must first offer their units to the tenants they evicted and for the first five years of re-renting, landlords can only charge the rent-controlled rent.
While there have been scores of court cases and loads of legislation that have challenged the implementation of the Ellis Act in San Francisco, few have succeeded. In February 2006, in Pieri v. CCSF, the Court of Appeals reversed the trial court’s ruling that an amendment that increased tenant relocation payments to $4,500 with a maximum payment of $13,500 per unit was invalid.[11] In June 2014, this ordinance was amended to expand tenant relocation payments by requiring landlords to pay the greater of the relocation payments, or the “Rental Payment Differential”—the difference between the unit’s rental rate at the time a landlord files a Notice of Intent and the market rate for a comparable unit.[12] However, in October 2014 in Levin v. CCSF, the U.S. District Court found this amendment unconstitutional and a separate state court challenge, Jacoby v. CCSF, backed this ruling.[13] The City is currently appealing this decision. Additionally, as of October 2016, the City is appealing the Superior Court’s ruling in SFAA v. CCSF that invalidated an amendment, which provided protection from no-fault evictions, including those under the Ellis Act, for students and educators.[14]
In action, the Ellis Act has been criticized for its biased enforcement, as it disproportionately affects low-income, minority, and disabled renters and the communities that they inhabit. A 2013 Policy Analysis Report by the SF Board of Supervisors found that in 2012, among four major community organizations that serve evicted tenants, including many impacted by the Ellis Act, almost half lived in poverty, about 45% were African American or Latino, and around 42% had disabilities.[15] By comparison, the 2010 U.S. Census found that at that time in San Francisco, 12% of people lived in poverty, about 21% were African American or Latino, and only 6% had disabilities.[16] Similarly, the neighborhood with the greatest number of Ellis Act evictions from 2000-2013 was the inner Mission, which has historically housed minority populations, especially Latino Americans, of low income.[17] The report also found a positive correlation between Ellis Act evictions and property values, suggesting landlords use the Act to “cash out” during lucrative housing market periods and bypass rent control.[18] Consequently, the supply of rental and affordable housing has dropped dramatically, leading to income inequality and a decrease in the city’s minority and low-income populations.[19]
Due to its disparate effects on landlords and tenants, the Ellis Act is equally the object of praise and criticism. Property owners, especially landlords, are its greatest proponents. They argue that the Act protects the inalienable rights of private property owners, that evictions under the Ellis Act are legitimate, and that tenants enjoy “sufficient protections.”[20] For example, the California and San Francisco Apartment Associations argue that the Act provides substantial relocation payments and often saves landlords from bankruptcy.[21] Conversely, the Act’s opponents, who tend to be tenants, argue that it violates tenants’ rights, disproportionately affects disadvantaged residents, and is abused by landlords. In their view, the Act enables wealthy property owners to become “speculators who profit from flipping rent-controlled housing units on the backs of vulnerable residents.”[22] The Anti-Eviction Mapping Project, which collects data on Ellis Act evictions in the Bay Area, gathers narratives of displaced tenants that reveal the commonality of disadvantaged backgrounds and shared sentiments of landlord discrimination and greed.[23]
If the Ellis Act’s goal is to protect landlords’ property rights, it is very effective. However, its effectiveness is undercut by its biased effects on tenants, who are disproportionately of minority and disadvantaged backgrounds and are forced out of the city or into homelessness, and its socioeconomic effects, including decreases in the affordable housing supply, increases in income inequality, and changes to the city’s native population. While some may argue that the Ellis Act nobly upholds the property rights of landlords, increases property values, and promotes economic development, I argue that these positive and important effects are undermined by its negative impact on tenants and contributions to gentrification.
It’s difficult to suggest reforms to the Ellis Act that equally ensure landlords’ and tenants’ rights. I suggest the assessment of the ability of tenants to afford housing in the area should they be evicted by the Ellis Act, as such tenants are often long-time renters protected by rent control. This requires the creation of a variable, which accounts for age, disability, annual income, current rent, and the market rental rate. In conjunction with this reform, I recommend a cap on the number of Ellis Act evictions in areas that are disproportionately impacted to discourage landlords from “cashing out” and to give priority to those landlords, who simply want to exit the rental market. Finally, relocation payments and assistance to tenants should be enhanced in areas like San Francisco, where rent has skyrocketed and the supply of affordable housing has plummeted.
The Ellis Act demonstrates the disparity between the law on the books and in action. While it is commendable for its protection of landlords’ rights, its deplorable effects on tenants, biased patterns of enforcement, and greater socioeconomic impact undermine its noble intent and reveal a desperate need for reform.
Footnotes
[1] The Ellis Act of 1986 (California Government Code 7060-7060.7)
[2] Green, Matthew. 8 November 2013. KQED. “Meet the Ellis Act, the Law Driving Many San Francisco Evictions.”
[3] SCOCAL, Nash v. City of Santa Monica, 37 Cal.3d 97.
[4] Green, Matthew. 8 November 2013. KQED. “Meet the Ellis Act, the Law Driving Many San Francisco Evictions.”
[5] SCOCAL, Nash v. City of Santa Monica, 37 Cal.3d 97.
[6] Green, Matthew. 8 November 2013. KQED. “Meet the Ellis Act, the Law Driving Many San Francisco Evictions.”
[7] The Ellis Act of 1986 (California Government Code 7060-7060.7)
[8] The Ellis Act of 1986 (California Government Code 7060-7060.7)
[9] Ibid.
[10] City and County of San Francisco Rent Board. Topic No.205: Evictions Pursuant to the Ellis Act.
[11] City and County of San Francisco Rent Board. “Court of Appeal Upholds Ellis Relocation Payments to All Tenants.”
[12] City and County of San Francisco Rent Board. “New Ordinance Amendment Re Increased Ellis Relocation Payments to Tenants.”
[13] City and County of San Francisco Rent Board. “Federal District Court Strikes Ordinance Amendment Re-Increased Relocation Payments to Tenants in Ellis Evictions.”
[14] City and County of San Francisco Rent Board. “City Appeals Superior Court Order Enjoining Enforcement of Ord Amendment Re-Increased Eviction Protections for School Employees & Families with Children During the School.”
[15] City and County of San Francisco Board of Supervisors. 30 October 2013. Policy Analysis Report.
[16] U.S. Census Bureau, 2010
[17] City and County of San Francisco Board of Supervisors. 30 October 2013. Policy Analysis Report.
[18] City and County of San Francisco Board of Supervisors. 30 October 2013. Policy Analysis Report.
[19] Cosco, Joey. 22 July 2014. Business Insider. “A 30-Year-Old Law Is Creating a Crisis in San Francisco.”
[20] Datar, Saurabh. 12 July 2016. SFGate. “Tenants in San Francisco’s Mission, Sunset Neighborhoods Get Most Eviction Notices.”
[21] Preserve the Ellis Act. “Protect the Ellis Act.”
[22] Gutierrez, Melody. 15 April 2015. SFGate. “Bill to Restrict Ellis Act Evictions in S.F. Hangs by a Thread.”
[23] Hotchkiss, Sarah. 29 June 2016. KQED. “’We Have A Right to Live Here’: Stories from San Francisco’s Evicted.”
Works Cited
Cosco, Joey. 22 July 2014. Business Insider. “A 30-Year-Old Law Is Creating a Crisis in San Francisco.” Retrieved from: http://www.businessinsider.com/ellis-act-ruining-san-francisco-2014-7
City and County of San Francisco Rent Board. June 2006. Topic No.205: Evictions Pursuant to the Ellis Act. Retrieved from: http://sfrb.org/topic-no-205-evictions-pursuant-ellis-act
City and County of San Francisco Rent Board. “Court of Appeal Upholds Ellis Relocation Payments to All Tenants.” Retrieved from: http://sfrb.org/court-appeal-upholds-ellis-relocation-payments-all-tenants
City and County of San Francisco Rent Board. 1 June 2014. “New Ordinance Amendment Re Increased Ellis Relocation Payments to Tenants.” Retrieved from: http://sfrb.org/new-ordinance-amendment-re-increased-ellis-relocation-payments-tenants-6114
City and County of San Francisco Rent Board. “Federal District Court Strikes Ordinance Amendment Re-Increased Relocation Payments to Tenants in Ellis Evictions.” Retrieved from: http://sfrb.org/federal-district-court-strikes-ordinance-amendment-re-increased-relocation-payments-tenants-ellis
City and County of San Francisco Rent Board. 16 October 2016. “City Appeals Superior Court Order Enjoining Enforcement of Ord Amendment Re-Increased Eviction Protections for School Employees & Families with Children During the School Year.” Retrieved from: http://sfrb.org/article/city-appeals-superior-court-order-enjoining-enforcement-ord-amendment-re-increased-eviction
City and County of San Francisco Board of Supervisors. 30 October 2013. Policy Analysis Report. Retrieved from: http://sfbos.org/sites/default/files/FileCenter/Documents/47040-BLA%20Displacement%20103013.pdf
Datar, Saurabh. 12 July 2016. SFGate. “Tenants in San Francisco’s Mission, Sunset Neighborhoods Get Most Eviction Notices.” Retrieved from: http://www.sfgate.com/news/article/Tenants-in-San-Francisco-s-Mission-Sunset-8352957.php
The Ellis Act of 1986 (California Government Code 7060-7060.7). Retrieved from: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=07001-08000&file=7060-7060.7
Green, Matthew. 8 November 2013. KQED. “Meet the Ellis Act, the Law Driving Many San Francisco Evictions.” Retrieved from: https://ww2.kqed.org/news/2013/11/07/117540/Priced-Out-Ellis-Act-San-Francisco-eviction/
Gutierrez, Melody. 15 April 2015. SFGate. “Bill to Restrict Ellis Act Evictions in S.F. Hangs by a Thread.” Retrieved from: http://www.sfgate.com/news/article/Bill-to-restrict-Ellis-Act-evictions-in-SF-hangs-6200271.php
Hotchkiss, Sarah. 29 June 2016. KQED. ‘”We Have A Right to Live Here’: Stories of San Francisco’s Evicted. Retrieved from: https://ww2.kqed.org/arts/2016/06/29/we-have-a-right-to-live-here-personal-stories-from-san-franciscos-evicted/
Preserve the Ellis Act. “Protect the Ellis Act.” Retrieved from: http://www.preservetheellisact.org/
SCOCAL, Nash v. City of Santa Monica, 37 Cal.3d 97. Retrieved from: http://scocal.stanford.edu/opinion/nash-v-city-santa-monica-28399
U.S. Census Bureau, 2010. Retrieved from: http://www.census.gov/quickfacts/table/AGE115210/06075
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