Stakes are significant not just for tenants facing Ellis Act evictions, but ‘for many laws that protect land use and our environment,’ City Attorney says
City Attorney Dennis Herrera today announced that his office will appeal a decision by a federal judge invalidating recent amendments to a city ordinance that sought to mitigate the daunting financial harms facing San Franciscans who are evicted under the state Ellis Act. U.S. District Court Judge Charles R. Breyer’s 24-page ruling issued late yesterday largely sided with arguments made by the Pacific Legal Foundation that the city’s tenant relocation law is an unconstitutional taking because it requires mitigation payments “untethered in both nature and amount to the social harm actually caused by the property owner’s action.” Judge Breyer’s order enjoins the City from enforcing the ordinance after Friday, Oct. 24.
“There should be no doubt that when a landlord evicts a rent-controlled tenant, the immense rent increase the tenant faces is the direct result of the landlord’s decision to evict,” Herrera said. “The district court’s decision is contrary to cases interpreting the U.S. Constitution. San Francisco is facing a housing affordability crisis that’s historically unprecedented, and our tenant relocation law serves a legitimate and lawful public purpose in helping tenants to adjust to the loss of rent control and mitigating the harms of displacement.”
Herrera also noted that the stakes in defending San Francisco’s tenant relocation assistance law are enormous, and not just for tenants.
“This decision places a new and significant obstacle in front of cities defending development fees and other development approval conditions: they must now show not only that a property owner’s actions cause social harm, but also that the owner’s actions are the only cause of that harm. If this decision stands, the consequences could be dire for many laws that protect land use and our environment. My hope is that the Ninth Circuit will recognize the potentially far-reaching consequences here and decline to up-end takings law in this way.”
The ordinance, whose primary sponsor was Supervisor David Campos, provides that when landlords make use of the Ellis Act to withdraw their residential units from the rental market, they must compensate the renters they evict with the difference between the tenant’s current rent and two years of rent at a comparable unit in San Francisco, as determined by the City Controller. If the difference were less than the per-tenant payment required under the city’s prior tenant relocation assistance law, then the higher payment would apply. The ordinance additionally sought to create two administrative appeals processes to protect small property owners from undue burdens. One avenue of appeal would enable property owners using the Ellis Act to challenge the Controller’s rent differential calculation; another would allow landlords to petition for relief from tenant relocation assistance payments when they can show evidence of financial hardship. Landlords would be free to pursue both appeals.
The Pacific Legal Foundation is a familiar legal foe to the San Francisco City Attorney’s Office, having brought many federal constitutional takings challenges to the city’s affordable housing policies. PLF spent twelve years suing San Francisco over its Hotel Conversion Ordinance, a 1981 law that prohibits owners of single room occupancy hotels, or SROs, from converting residential units into lodging for tourists unless steps are taken to address diminished housing stock. Herrera’s office finally won the case in a unanimous U.S. Supreme Court decision involving PLF’s bid to re-litigate in federal court issues it had already lost in California’s state courts. The case, San Remo Hotel v. City and County of San Francisco, was decided on June 20, 2005.
The case is: Levin et al. v. City and County of San Francisco, U.S. District Court for the Northern District of California, San Francisco Division, filed July 24, 2014, case no. 150085.
PDF of the Tenant Relocation Assistance Appeal Announcement Presskit (Oct. 22, 2014)