Proposed Bill to Limit California Ellis Act Has New Life

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    NEWSLETTERS

    An amendment to California's Ellis Act that was shot down by the state Senate has new life. Mark Matthews reports. (Published Friday, May 30, 2014)

    An amendment to California's Ellis Act that was shot down by the state Senate has new life.

    The proposed bill, which would protect long-term residents from being evicted by landlords, was making its way through the Capitol Thursday night. The amendment is tied to a major political battle over the Ellis Act, which allows landlords in California to evict tenants under certain circumstances.

    Under the act, landlords are able to get out of the rental business by evicting their long-term tenants and selling the apartment building.

    Rent-controlled apartment buildings are being purchased at a discount because the price of the building is based on the current rents. The new owner is unable to raise the rents, but can evict residents by stating their wish to get out of the landlord business and sell the buildings.

    It's a loophole real estate speculators are jumping on in a hot market like San Francisco.

    As a result, residents like 65-year-old Patricia Kerman are facing notices to move out. The San Francisco resident has until August to find a new place to call home.

    "That's the thing that really terrifies me because I really don't know," Kerman said of her future home. "I really don't know."

    Kerman lives on $900 a month and can't afford to stay in the city once she is forced to move out. She said she'll likely move to the East Bay or down the Peninsula.

    Officials said there are hundreds of people a year in the exact same position Kerman is in, which has placed heavy pressure on the rental markets in the Bay Area.

    State Sen. Mark Leno, D-San Francisco, wants to restrict the use of the Ellis Act with a proposed bill.

    "All the bill does is it gives authority to the leadership of San Francisco to be able to require a property owner own the property for minimally five years before using the Ellis Act," Leno said. "Which means to evict all tenants we want to differentiate between landlords and speculators."

    Leno's bill was shot down Wednesday, but on Thursday he was able to get senators to change their votes by offering a number of amendments to bring the bill back to life.

    The five-year ownership requirements stay in the proposed bill, but mom-and-pop apartment owners would be exempted. The bill would also only apply to companies or individuals that own multiple buildings and there would be a cap on the number of units that would be exempt.

    In addition, the bill would allow companies to use the Ellis Act only one time.