Ellis Act crisis

Pub date May 1, 2007
SectionNews & OpinionSectionOpinion

OPINION Between 2004 and 2005, Chetcuti and Associates, a Walnut Creek real estate development company, bought eight Mission District apartment buildings. Within the first few weeks of ownership, the company served all the tenants in four buildings with Ellis Act eviction notices. In the next two months, three of the other buildings were Ellised. The company held on to the eighth building for a year before it gave those tenants Ellis notices.

The same is true throughout the city: John Hickey Brokerage, another out-of-town real estate company, gave Lola McKay (who died in 2000 while fighting her Ellis eviction) a notice within weeks after buying the building and then did the same to tenants in a North Beach apartment building – evicting those tenants just five days after a purchase deal closed.

In fact, more than half of all Ellis Act evictions in San Francisco are done by real estate speculators who have owned their buildings for less than six months. Almost one quarter are done by speculators who have owned the building for less than a month (and many of those are done in the first hours or days of ownership).

The buildings are then often sold as tenancies in common – essentially, as condos for people much wealthier than the ones who were evicted.

Rampant real estate speculation is bad enough on its own. What makes it worse is that this pattern is also an abuse of everything the Ellis Act was intended to be: a way for long-term landlords to be able to get out of the rental business and retire. When the Ellis Act was passed in 1985, its proponents said its purpose was to allow a landlord "to go out of business when he or she is convinced that they are no longer willing to devote the time, accept the frustration, expose themselves to the liability and other factors of continuing to be a landlord."

Apparently, companies such as Chetcuti and Associates and John Hickey Brokerage decided within days and weeks that they just couldn’t devote the time to or accept the frustration of being a landlord anymore and were compelled to evict the tenants. And that’s the case for hundreds of other real estate investors, many of whom are getting tired of being landlords within days of buying rental property.

Senate Bill 464 – which the State Senate will vote on any day now – would rectify this abuse and return the Ellis Act to its original intent. This bill simply says that a landlord must own property for at least five years before using the Ellis Act to evict tenants. It’s simple and fair, and it hurts only real estate speculators.

The vote is expected to be close – and unbelievably, the bill may not pass because a senator from San Francisco, Leland Yee, has indicated he may oppose it. No other city in California has been hit harder by the Ellis Act than San Francisco – yet our very own senator may kill this bill.

Thousands of residents here have been evicted under the Ellis Act, most of them senior or disabled. Ellis evictions are a crisis in San Francisco and are destroying lives and neighborhoods and communities.

Please call (415-557-7857) or fax (415-557-7864) Sen. Yee to ask him to support SB 464. *

Ted Gullicksen

Ted Gullicksen is executive director of the San Francisco Tenants Union.