BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1439|
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THIRD READING
Bill No: SB 1439
Author: Leno (D)
Amended: 5/13/14
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-4, 4/8/14
AYES: DeSaulnier, Beall, Lara, Liu, Pavley, Roth
NOES: Gaines, Cannella, Galgiani, Wyland
NO VOTE RECORDED: Hueso
SENATE JUDICIARY COMMITTEE : 5-2, 5/6/14
AYES: Jackson, Corbett, Lara, Leno, Monning
NOES: Anderson, Vidak
SENATE FLOOR : 18-19, 5/28/14 (FAIL)
AYES: Beall, Block, Corbett, De Le�n, DeSaulnier, Evans,
Hancock, Jackson, Lara, Leno, Lieu, Liu, Mitchell, Monning,
Padilla, Pavley, Steinberg, Wolk
NOES: Anderson, Berryhill, Cannella, Correa, Fuller, Gaines,
Galgiani, Hernandez, Hill, Hueso, Huff, Knight, Morrell,
Nielsen, Roth, Torres, Vidak, Walters, Wyland
NO VOTE RECORDED: Calderon, Wright, Yee
SUBJECT : Ellis Act
SOURCE : City and County of San Francisco
Tenants Together
DIGEST : This bill allows the City and County of San Francisco
to enact law or regulations to prohibit a rental housing owner
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from removing a building from the market pursuant to the Ellis
Act (Act) unless all owners in the property have held their
ownership interest for at least five years.
ANALYSIS : The Act prohibits a local government from
compelling the owner of a residential rental property, except
for a residential hotel, to continue offering the property as
rental housing. The Act further maintains the authority of the
local government to regulate the subdivision or subsequent use
of the property and to mitigate any adverse impact on displaced
tenants. The Act applies only when an owner seeks to remove all
units within a building or all units on a property with a
building containing three or fewer units, from the market and
has real effect only in cities or counties with rent control and
just cause eviction ordinances. San Francisco has both rent
control and just cause eviction ordinances.
In rent control jurisdictions, the Act provides that the local
government may require the owner to give notice before
withdrawing the building from the market. If so, the owner may
withdraw the units 120 days after the notice is delivered,
except that the Act extends the notice period to one year for
tenants who are disabled or over 62 and who have lived in the
unit for at least one year. In addition, owners who seek to
re-rent the units within two years after withdrawal are liable
to displaced tenants for actual and exemplary damages and
required to offer the units to displaced tenants under the old
rent-controlled lease terms. The city or county may
additionally require an owner for up to 10 years to offer
re-rented units to tenants displace by the withdrawal. If the
owner demolishes the old units and constructs new rental units
on the same property within five years of withdrawal, a city or
county may subject the new units to its rent control ordinance.
This bill allows the City and County of San Francisco to adopt
an ordinance, resolution, or regulation to:
1. Require an owner submitting the Act notice to identify each
person or entity with an ownership interest in the building,
including persons with an ownership interest in a corporate
entity. This information shall be available for public
inspection.
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2. Prohibit an owner from submitting a notice to withdraw a
building pursuant to the Act unless all the owners of the
property have been owners for at least five continuous years.
If the owner is a corporate entity, all persons or entities
with an ownership interest must have held that interest for
five continuous years.
3. Prohibit an owner of a building, for which the Act notice has
been submitted, from withdrawing any other property that
he/she acquired after submitting the notice for the initial
property for 10 years from the filling of the first notice.
4. Prohibit an owner from acting in concert directly or
indirectly with a co-owner, successive owner, prospective
owner, or other person to circumvent the above two
prohibitions.
5. Provide that a violator of any of these provisions is liable
to the tenant for actual damages, special damages of at least
$2,000 for each violation, and reasonable attorney fees and
court costs determined by the court.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 5/13/14)
City and County of San Francisco (co-source)
Tenants Together (co-source)
Accela
Advent
Affordable Housing Alliance
AfterCollege, Inc.
Airseed
Alliance for a Better District 6
Anti-Eviction Mapping Project
Apcera
AppMesh Inc.
Asian Americans Advancing Justice - Asian Law Caucus
Asian Pacific Islander Legal Outreach
Asian Southeast Asian Society International Policy Institute
Asian Students Promoting Immigrants Rights through Education
Automatic Labs Inc.
Babelverse, Inc.
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Bay Area Council
Bernal Heights Neighborhood Center
Bill Sorro Housing Program
Box
Brian Webster and Associates
Calle 24 Merchants and Neighborhood Association
California Alliance for Retired Americans
California Association of Code Officers
California Labor Federation
California Music and Culture Association
California Rural Legal Assistance Foundation
California State Association of Counties
Californians for Disability Rights
Causa Justa::Just Cause
Causes
Central City Democrats
Central Mission Neighborhood Organization
Chicano Latino Caucus of the California Democratic Party
Chinatown Community Development Center
Chinese Chamber of Commerce
Christ Our Redeemer AME Church of Irvine
Cloudera
Community Housing Partnership
Community Tenants Association
Couchsurfing
Crate Labs, Inc.
Credit Karma
Crowdtilt
Data Elite
Deloitte
Ecumenical Center for Black Church Studies
EchoUser
Episcopal Community Services of San Francisco
Events by Collette
Eviction Defense Collaborative
Eviction Free San Francisco
Expedia, Inc.
Exygy
Eyegroove
Fido Labs
ForageSF
Generator Lab
Getable, Inc.
Github
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HandUp PBC
Homeownership San Francisco
Housing California
Housing Rights Committee of San Francisco
iCloud
Inside
Jawbone
Jesse Miranda Center for Hispanic Leadership
Keen IO
Kite Solutions, Inc.
Lit Motors
Los Angeles Latino Chamber of Commerce
Lower 24th Street, Merchants & Neighbors Association
Manilatown Heritage Foundation
McElroy, Most Reverend Robert W., Auxiliary Bishop of San
Francisco
Mesosphere Inc.
Mission Cultural Center for Latino Arts
Mission Economic Development Agency
Nashville West Studios
National Asian American Coalition
National Housing Law Project
Neighborland
Newsle, Inc.
Non-Profit Housing Association of Northern California
North Beach Tenants Committee
North of Market Business Association
Optimizely
Organizer
Path
Peers
Peerspace
PLAE, Inc.
Project Homeless Connect
QuickPay
RivalMe Inc.
Salesforce
San Francisco Board of Supervisors
San Francisco Building and Construction Trades Council
San Francisco Immigrant Legal & Education Network
San Francisco Citizens Initiative for Technology and Innovation
(sf.citi)
San Francisco Community Land Trust
San Francisco Housing Development Corporation
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San Francisco Interfaith Council
San Francisco Labor Council
San Francisco Latino Democratic Club
San Francisco SRO Collaborative
SEIU Local 1021
Senior and Disability Action
Silicon Valley Bank
Social Bet, Inc.
Splice Vine
Square Trade
StartUpers
State Building and Construction Trades Council
St. Anthony Foundation
SV ANGEL
Tagged
Tenant Associations Coalitions of San Francisco
Tenderloin Housing Clinic
Tennis Round, Inc.
TinyCo
TMG Partners
TRAIL
Treasure Island Homeless Development Initiative
Twilio
Twitter
United Farm Workers
Urban Counties Caucus
WebTalk
West Bay Housing Corporation
Western Center on Law and Poverty
Xoom Corp.
YELP
YouBetMe
Zackees, Inc.
Zynga
OPPOSITION : (Verified 5/13/14)
Apartment Association, California Southern Cities
Apartment Association of Orange County
California Apartment Association
California Association of Realtors
California Chamber of Commerce
Civil Justice Association of California
East Bay Rental Housing Association
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NorCal Rental Property Association
San Diego Apartment Association
San Francisco Association of Realtors
ARGUMENTS IN SUPPORT : According to the author:
Ellis Act evictions have tripled in San Francisco in the
last year. More than 300 units were taken off the rental
market. But that figure understates the impact of the
Act. Many evictions occur off the books. Ellis Act
threats lead many tenants to vacate without paperwork
actually being filed. Neighboring tenants live in fear
that the evictions occurring around them will soon happen
to them. Fifty percent of the evictions in 2013 were done
by owners who had owned the property for less than one
year before invoking the Act, the majority occurring
during the first six months of ownership. These are not
the landlords the Act was designed to help.
The spirit of the Act was to allow property owners a way
out of the rental business, not to give windfall profits
to speculators willing to exploit the Act by entering the
rental business just to exit it. This misuse of the Act
does damage to renters and their communities. Cities are
already empowered by the Act to adopt specified rules to
mitigate the impact of eviction and prevent re-rental in
violation of the Act. This bill will allow San Francisco
to respond to the conditions it is currently experiencing
by authorizing the city to enact additional measures to
stop misuses of the Act by speculators.
ARGUMENTS IN OPPOSITION : The California Association of
Realtors writes in opposition that this bill "prohibits an owner
from applying the Ellis Act to more than one rental property.
This would require an owner to remain in a money-losing
investment for perpetuity and serves to discourage new
investment in such housing."
The California Chamber of Commerce writes in opposition, "SB
1439 makes it substantially more difficult to exit the rental
market and, in doing so, imposes two serious burdens on rental
property owners. First, rental property owners may no longer be
able to sell a property even if they are losing money monthly.
Importantly, there is no other industry in the United States
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where a local government can force a small business owner to
stay in business against his or her will, even when they are
losing money. Second, SB 1439 would prevent families who own
small rental buildings from, for example, combining two or three
small units into a larger one to provide an adequate home for a
growing family. In San
Francisco, the Ellis Act is often the only way for small
property owners to move into their own units."
JA:dk 5/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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