Effective January 20, 2020, eviction controls under the San Francisco Rent Stabilization and Arbitration Ordinance (Administrative Code Chapter 37) (the “Rent Ordinance”) apply to any residential units constructed after June 13, 1979, and any residential units that have undergone substantial rehabilitation.

The rent limitations and the eviction controls enumerated in the Rent Ordinance previously applied only to apartment buildings with a certificate of occupancy issued before June 13, 1979.  Under San Francisco Ordinance No. 296-19 (the “Haney Amendment”), the “just cause” eviction provisions in the Rent Ordinance now apply to all apartment buildings.

Part of the rationale for the Haney Amendment is to reconcile the eviction controls in the Rent Ordinance with the California Tenant Protection Act, which established statewide rent caps and eviction controls for most residential properties built before 2005. The Tenant Protection Act does not supersede local rent control or eviction protections, so long as the local ordinance is more protective. (For more information about the details of the intricacies of the Tenant Protection Act, see our previous update.)

The Haney Amendment found that the Rent Ordinance is more protective than the Tenant Protection Act because it provides more limited reasons for evicting tenants as well as higher relocation assistance and other tenant protections.  Under the Haney Amendment, landlords will now be required to pay relocation fees due under the Rent Ordinance, follow the buyout procedures specified under the Rent Ordinance, and comply with the Rent Ordinance regulations on capital improvements. Except for the rent limitations prescribed under the Rent Ordinance, all provisions of the Rent Ordinance now apply to apartment buildings built after 1979.
Continue Reading San Francisco Expands Just Cause Eviction Protections

The Ninth Circuit held that the City of Carson’s mobile home rent control board’s decision not to factor in debt service increases in its adjustment of a rental rate for a mobile home park did not result in a regulatory taking of the mobile home park owner’s property. Colony Cove Props., LLC v. City of Carson, 888 F.3d 445 (9th Cir. 2018)

The plaintiff purchased a $23 million rent-controlled mobile home park in the City of Carson, $18 million of which was financed through a loan.  When the plaintiff acquired the property, the City Rent Review Board’s application review guidelines required the Board to consider certain expenses submitted by property owners against the property’s income to determine what rents would give the owner a fair return on their investment. At the time the plaintiff purchased the property, these expenses included debt service, which are interest payments made on a loan to purchase the rent-controlled property.  Subsequently, the City revised its guidelines for considering rent increases and the City’s new rent control formula no longer factored in debt service expenses.

The plaintiff twice petitioned the city’s Rent Review Board for a several hundred-dollar rent adjustment, per space. Applying the new guidelines, the City only granted a rent increase of $36.74.  The plaintiff sued the City, contending the Board’s decision was an unconstitutional taking. The jury awarded the plaintiff over $3 million in damages and the City appealed the decision.
Continue Reading Ninth Circuit Holds that Rent Control Board’s Denial of a Mobile Home Owner’s Request for Rent Increase Is Not an Unconstitutional Taking 

Once again, the City and County of San Francisco has been found to have exceeded the limits of its authority under the Ellis Act in its efforts to deter conversion of residential rental units. Small Property Owners of San Francisco Institute v. City and County of San Francisco, 22 Cal. App. 5th 77 (2018).

The Ellis Act prohibits local governments from “compel[ling] the owner of any residential real property to offer, or to continue to offer accommodations in the property for rent or lease.” (Gov’t Code § 7060(a).)  Courts have held that the Ellis Act completely occupies the field of substantive eviction controls over landlords who withdraw units from the market and prohibits local ordinances that penalize the exercise of rights established by the statute.

The ordinance challenged in this case modified the City’s Planning Code to permit enlargement, alteration or reconstruction of nonconforming residential units in zoning districts where residential use was principally permitted, but imposed a 10-year waiting period for units that had been the subject of a “no fault” eviction. Small Property Owners of San Francisco Institute (“SPOSFI”) sued, claiming that the imposition of a 10-year waiting period penalized the exercise of the right to exit the rental business and therefore conflicted with and was preempted by the Ellis Act.
Continue Reading Another San Francisco Ordinance Falls To The Ellis Act

The Court of Appeal ruled that the Ellis Act preempted measures mandating relocation assistance payments of “the difference between the tenant’s current rent and the prevailing rent for a comparable apartment in San Francisco over a two-year period” because such mitigation constituted a prohibitive price for landlords to exit the rental business. Coyne v. City