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Legislature Can End Ellis Act Crisis in 2021

The pandemic has not stopped Ellis Act evictions. Speculators continue to buy buildings, file Ellis Act notices to “go out of the rental housing business” the next day, and then move to evict all of the tenants.

“Progressive” California allows this outrage. It enables profit-driven, Donald Trump-like real estate speculators to displace longterm tenants and eliminate rent-controlled housing. Hundreds of thousands of tenants whose buildings are for sale go to sleep at night worrying that the Ellis Act will preempt their just cause eviction protections.

It’s sad but true. And we should ask: Why do our state legislators tolerate this outrage? How many more longterm and vulnerable tenants must lose their homes before our legislature acts?

My answer: 2021 must be the year for enacting Ellis Act reform.

A Statewide Problem

I’ve been troubled by this legislative inaction since former State Senator Mark Leno’s (D-SF) Ellis Act reform bill narrowly failed in 2014 (it restricted the ability to use the Ellis Act to property owners who have owned the property for at least 5 years). Leno’s bill passed the State Senate but was defeated in committee by two Southern California Democrats. Leno came back with the bill in 2015 but it was during the same session and was quickly defeated

There has since been no effort to reform the Ellis Act to stop speculator evictions. This despite the Act’s causing daily insecurity among hundreds of thousands of tenants whose local rent control laws are designed to protect.

Having been involved in every successful effort to reform the Ellis Act since its enactment, I believe 2021 offers our best opportunity in years. Here’s why.

First, Ellis Act evictions have spread from San Francisco across the state.

Los Angeles now has a serious Ellis eviction crisis. The city’s Coalition for Economic Survival found nearly 27,000 Ellis Act evictions since 2001 with the numbers sharply rising in the past four years. In 2017 alone the city lost 1824 rent-controlled units.

This steep rise means that Los Angeles legislators and the city’s mayor and county Board of Supervisors have far more reason to strongly back Ellis Act reform than they did in 2014. Just last week the LA-based City Watch called for “Restricting the Ellis Act in Los Angeles to reduce evictions and the demolition of existing affordable apartments.” The Los Angeles tenant movement is stronger today than in 2014 and the city’s state legislators are more concerned about securing tenant votes.

L.A.’s Coalition for Economic Survival found nearly 27,000 Ellis Act evictions since 2001 with the numbers sharply rising

Oakland does not yet have a major Ellis Act problem but now that it has stronger rent control and eviction protections it’s only a matter of time. Berkeley saw an Ellis Act eviction in a 13-unit building in 2019. Tenants in newly rent-controlled cities like Culver City are also at risk. Sacramento also has a rent control law that could open tenants to speculator evictions under Ellis.

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Oakland and Berkeley have multiple state legislators who have been in the vanguard of struggles for affordable housing. We need their leadership to pass Ellis Act reform.

Ellis Serves No Policy Goal

Second, what distinguishes the Ellis Act from Costa-Hawkins and other landlord-backed laws is that its current operation is completely contrary to the legislative intent. The 1986 bill passed in response to a California Supreme Court ruling that rejected landlord claims that local “just cause” eviction laws forced owners into “involuntary servitude” by requiring they remain landlords. This obscene argument ignored the landlord’s ability of to sell buildings they no longer wish to own. But legislators felt compelled to affirm what they described as landlord’s civil right to leave the rental housing business by evicting their tenants and leaving buildings vacant.

Jim Ellis, author of the Act, famously said that he did not expect it to be used much because he didn’t see landlords wanting to sit on vacant buildings. I followed the bill’s progress and nobody, and I mean nobody, foresaw it being used to convert apartments to tenancies-in-common (TICs). To protect rental housing the Ellis Act expressly prohibits its use to create condominiums—-but because the TIC industry did not exist, that form of ownership was not expressly prohibited.

The courts should have ruled that by restricting condo conversions under the Ellis Act the legislature obviously intended to protect rental housing. It would have found TIC’s also violated the Act, thus eliminating the overwhelming motive for speculators to use the Ellis Act.

But anti-rent control judges saw in the Act’s lack of express ban on TIC’s that somehow the legislature intended the Ellis Act to be used to create them. They rewrote the Ellis Act to cause harms never contemplated by the original bill.

If Not Now, When?

I wrote about San Francisco’s many high-profile Ellis Act evictions in the first chapter of Generation Priced Out. Those targeted were tenants who lived in their homes for fifty years, those diagnosed with AIDS, and those living in gentrified neighborhoods like North Beach. This misuse of the Ellis Act began in the late 1990’s and has not abated.

Attorneys at the Tenderloin Housing Clinic, which I head, have provided most of the legal representation for tenants facing Ellis evictions. I have had a firsthand view of the human cruelty the Ellis Act imposes on vulnerable tenants. I have seen the seniors facing the loss of their homes of fifty plus years, the families forced to leave the city and the many working tenants with no chance to afford a post-eviction apartment in their longtime neighborhood.

Why does California not fight to stop this? This gets to my third big reason why 2021 is ripe for passing reform legislation: what are legislators waiting for?

California passed major housing bills in 2017 and 2019 and did little in 2018 and 2020. See a pattern here?

San Francisco’s John Burton helped us win two major Ellis Act reforms that addressed bad land use decisions involving the Ellis Act. He also won longer notice provisions for senior and disabled tenants, which has been a big help. Mark Leno stepped up to serve his San Francisco constituents in leading the successful effort in 2003 to exempt San Francisco’s SRO hotels from the Ellis Act. Had that reform not passed, the city’s subsequent real estate boom would have likely seen thousands of SRO units lost, with residents ending up in shelters or the streets. Leno then joined then-San Francisco Mayor Lee in doing everything they could do pass the 2014 bill, only to come up short.

Tenants at risk of Ellis Act evictions need a new champion. But state legislators need to hear from constituents that they care about Ellis Act reform.

randy shaw

Randy Shaw

I strongly urge readers to contact legislators you think would be willing to take on this fight. I foresee a major grassroots campaign to ensure passage of the Act, an effort that was lacking in 2014 and likely would have swayed those two Assembly votes that killed the bill.

If the nation can fire Trump, California can stop cruel speculator evictions under the Ellis Act.

Randy Shaw
Beyond Chron