Rental Owners’ Rights Under Fire
This week, landlords and real estate agents joined forces to challenge a San Francisco law that would strip the rights of rental property owners.
The San Francisco Apartment Association, Coalition for Better Housing and the San Francisco Association of REALTORS® filed the suit challenging the legality of recently-enacted laws known as the Avalos Ellis Act and Merger Prohibition Legislation.
This legislation prohibits owners of multi-unit buildings from combining units in a building for ten years following an Ellis Act eviction – a law that allows owners to take rentals out of service — or for five years following an owner-move in eviction.
According to the SFAA, on a practical level, the legislation prevents families who own a building from creating a home that meets their needs. For example, the legislation prevents a family from combining two small units into a larger one to provide a home for a growing family. Couples with young children often find themselves in need of additional space they did not anticipate when they purchased a rental building, yet SFAA claims that the legislation punishes them.
Only 2 percent of new housing built in San Francisco since 2001 are single-family homes that provide adequate space for families, often with multiple generations living together, according to SFAA. The group attributes the lack of adequate housing to meet the needs of families has contributed San Francisco losing 5,278 people younger than 18 between 2000 and 2010, according to the census.
Others agree. “The San Francisco Association of REALTORS® supports the rights of private property owners for the free use of their property as their needs suit them. This legislation only exacerbates the problems families face in finding adequate housing and drives out the families that have created the diversity we want and celebrate in our city,” said Walt Baczkowski, CEO of the San Francisco Association of Realtors.
Because so few single family homes are being constructed, families rely on improving buildings they own, including tenancies in common to add living space. This legislation prohibits them from creating the home they need in a building they own.
“Families are fleeing San Francisco due to a multitude of reasons that include a lack of adequate space for growing families that often include multiple generations. This legislation exacerbates that problem by punishing and limiting options for families who simply seek to create a home that meets the needs of their family,” stated Janan New, Executive Director of the San Francisco Apartment Association. “This legislation punishes hard working families, while doing little to protect renters.”
The lawsuit claims that the legislation is pre-empted by the Ellis Act, which allows building owners to take a building off the rental market and convert those units to condominiums or single-family homes. Building owners already are required to give occupants up to one year advance notice and provide relocation fees of $5,210 per tenant, up to a maximum of $15,632, plus $3,473 additional for tenants who are senior or disabled.
“My clients are seeking relief from this just-passed legislation which unfairly takes away the right of individuals and families who simply want to create a home for themselves and their family in a building they own,” stated Jim Parrinello, attorney for the plaintiffs.