Ellis Act reform starts Tuesday in Sacto

They have long past passed the point of tenant “protections” and entered the realm of tenant property confiscations.

Costa-Hawkins.

You may not trust state law but it trumps city law. And is generally more moderate and reasonable.

Not Ellis, not Costa. What CA law was that?

And anyway, I don’t trust state law; it can be changed much easier than imagined – though not as easy as an SF ord.

Because Peskin is clueless and probably doesn’t realize that it is state law that prevents that.

Originally (1979) it was the local rent ordinance that exempted post-1979 homes, for obvious reasons. But then in 1986 a state law was passed that prevented cities from later bringing those new homes under rent control.

So why does Peskin make regulating post-79 units a key of his campaign?

The ENP has been a success, so that is probably a bad example.

The way this should work is what happened with live-work lofts, where the city went to developers and asked “What do we have to do to ensure that you will build?” They suggested lofts so we built them, and they now house thousands.

The idea that it is a city policy to stop developers building homes is recent, questionable, and most voters appear not to support that kind of NIMBYism

CCHO and MEDA both supported Eastern Neighborhoods because both collect Eastern Neighborhoods community benefit checks. Their resistance is all for show.

Update: this bill failed in committee. Ayes: Allen, Beall, Leyva, McGuire, Wieckowski; Noes: Bates, Cannella, Gaines, Galgiani, Mendoza, Roth.

So called “impact fees” (AKA extortion fees) deter the building of homes which makes SF housing more expensive.

As usual, the law of unintended consequences wins again

Another example. stop Ellis and I’m willing to bet that the rate of fires in old buildings increases

Rent control is not a solution to the problem. Its a symptom of the problem. The ONLY way to solve the housing shortage problem in a permanent sustainable manner is to build more housing. LOTS more housing. But if you advocate for that you cross swords with the Sierra Club, and Aaron Peskin and MEDA and ChooChoo and they’ll take away your membership in the Progressive of the Month Club….so people don’t bother, preferring instead to tilt at Ellis Act windmills.

Turnover is slower in controlled units because tenants are given an artificial and arbitrary incentive to hog and hoard their homes. Any city without a healthy vacancy rate is going to have high rents.

But it will change, Ellis or not. The average SF tenancy even with rent control is about seven years. Most people don’t think the pinnacle of personal achievement is squatting in the same rental unit for a lifetime.

No new controlled units are being created and every year a few thousand go away for one reason or another.

As some point there won’t be enough beneficiaries of rent control to rig elections any more, and then either rent control will go away or it will melt away.

Well it clearly hasn’t worked since SF has the highest rents in the nation. If rent control hasn’t fixed that in 35 years, why would anyone think the result will be any different in the future?

Turnover in rent controlled apartments is much lower in the city than turnover for rentals statewide. The 2013 number was around 15%, versus 25% statewide in comparable units.

Lest that seem high, it isn’t: viz http://www.naahq.org/sites/default/files/documents/CEL-Multifamily-Turnover-Trends-2013_0.pdf

One thing the ACS isn’t is panel data; you can’t check to see if it’s the same almost-market-rate subset of units turning over.

developers do pay impact fees…currently about $100,000 per unit in San Francisco. Just another reason housing is unaffordable in the Bay Area. When you make home builders the responsible entity to pay for schools, police, fire, roads, libraries, parks etc. homes become very expensive indeed.

Thanks very much. I’ll take a closer look when I have more time.

If ⅔ of the new move-ins are in pre-’79 units, it still looks like the tenants of some 10% of rent-controlled units move out every year. That seems very odd. Either people move elsewhere nearby, guaranteeing themselves much higher rents (unlikely), or they start families and want to move to larger quarters (not that many), or they die (not that many), or they are surreptitiously forced to move (but how? That many?)

Grab the microdata files off the Census site, http://www2.census.gov/ 2013 ACS microdata in csv format for the California housing sample, for instance, lives in a compressed file at http://www2.census.gov/acs2013_1yr/pums/csv_hca.zip [zip]

Fire up R and the following will give you a San Francisco sample and crosstab mover status with housing type:

CA13H <- read.csv('ss13hca.csv', quote = "", stringsAsFactors = FALSE)
# 2013 SF PUMAs are 7501 - 7507
SF13H 7500 & PUMA < 7600)
# renters have TEN code 3
SF13Hr 5 built 1980 or later, BLD 5 | BLD < 4, weight = WGTP))


You’ll get a table with 41,061 MV code 1 — moved into this house or apartment within 12 months or less.

The economy moves faster than housing and infrastructure, both on the way up and the way down. The Bay Area has been short on housing for forty years. There is no excuse for its not having done much about it.

How about asking for new developments to pay impact fees to absorb growth and be a contribution to a solution? OK, back to crazy town.

Glad to see at least one person suggest it might be time for review and revision of SF Rent Control

I’m trying to find that data, but having no luck. What’s the name of the dataset? Because 40k units/year, or over 10%/yr turnaround, is surprisingly high.
“The best rent control is abundance”—sure, but it’s a lot easier and quicker for companies to offer jobs to 10,000 people in the Bay Area than it is to build housing for 10,000 people. Controlling growth is much more effective, but much more difficult.

Exactly! the joke is on ChooChoo and MEDA and their ilk. The more they fight new housing, the richer the landed classes become.

I get numbers from the ACS. I’ve been looking at 2013, the most recent microdata release, and 2006, a bottom in the rental market. The numbers vary a little, but not the broad strokes.

Just under three in four SF units is pre-’79 and not SFH. New tenancies in 2006 look the same, but in 2013 the new tenant mix in pre-’79, non-SFH was below two in three.

Property owners stop looking for loopholes when they have to compete for tenants. The best rent control is abundance.

Like I said, it’s not much of an issue outside SF where, in general, there are other methods for owners to get back their buildings and/or exit the rental business..

99% of the land area of California does not have rent control and therefore has no reason to care either way about Ellis.

The real problem is that if somehow Ellis evictions were no longer possible, then landlords would be more reluctant to re-rent when they get a vacancy, because they would know they might never get their unit back. Result? – less vacancies and higher rents.

Disagree:

1) http://la.curbed.com/archives/2015/03/ellis_act_rent_control_evictions_santa_monica.php

2)http://www.smgov.net/uploadedFiles/Departments/Rent_Control/Reports/Annual_Reports/Annual_Report_2014.pdf

3)http://articles.latimes.com/2014/apr/13/business/la-fi-no-fault-evictions-20140413

But it’s all good for us property investors, who thrive and profit from artificial shortages caused by such laws. RE investors love NIMBYs and regressives

Far more tenants are evicted for avoidable matters like non-payment of rent or breaches of the lease.

Ellis is a footnote really. If Ellis evictions were not possible, landlords will keep more units off the market, or let them short-term, or convert to TIC.

Many tenant protections end up hurting tenants

Not really. It’s not such a “crisis” state-wide. it’s really only a SF issue – few Ellis evictions happen elsewhere.

Yes, it’s weird the way the tenant lobby obsesses about Ellis. It’s not even one of the top three types of eviction.

But it is good for landlords that this absorbs so much of their energy, rather than working for something that might really help tenants.

Costa-Hawkins benefits all property owners in the state, and not just SF landlords, so changing that is a non-starter.

A lot of people cannot see (or refuse to see) the woods for the trees. Ellis Act reform is meaningless in the grand scheme, but it makes some people feel good about themselves to try. We need more housing, A LOT more housing, but that makes people uncomfortable to advocate for…so let’s play in the nice comfortable margins instead.

I wish I could be in Sacramento to witness this hilarity!

So, Mission Activist types, you want a pass on the Ellis Act?

Yes

You also want a moratorium to stop all new housing construction?

Yes

BWAAAAAHAHAHAHAHA… get back on your bus and return to crazy town.

Thanks, I was too lazy to look it up. Does the city keep track of this?
Do you know how many of these units are rent-controlled?
The new amendment looks good, but what I meant was that past numbers only show the tip of the iceberg. Time will tell if it will push more landlords to Ellising outright, or if other loopholes and workarounds will be found.

In the grand scheme of things that helps tenants, new and old, amending the Ellis Act seems very low on the list of worthwhile policy changes. I suppose, to the extent that it socializes profits currently accruing to the W.B. Coyles of this world among merely rich strivers, it is a slight improvement on the status quo. Very slight.

The best rent control is abundance. Adding more units to the controlled stock without any other changes, in particular without significant transit improvements and regionally coordinated, competent and extremely aggressive public building, just tightens the market further and makes market rents more onerous for the new tenants.

In round numbers, there are 40,000 new residential tenancies in San Francisco per year.

The recently effective amendment [PDF] to the Rent Ordinance should effectively end high pressure buyouts.

The housing crisis has expanded the political base, geographically and economically, that might change the legislative calculus on Elllis amendments favorably.

I’m sure if they manage to overturn or weaken Ellis, they’ll go after Costa-Hawkins next.

It would be better to compare this number to the overall yearly unit turnaround. I don’t have this number myself.
Also, don’t forget that behind this number hide many owner buy-outs done under threat of Ellis eviction, along the lines of “we’d rather pay you to move out than pay a lawyer to evict you, and you’ll be out in the end anyhow.” Without Ellis, these kinds of forced evictions would not be possible.

Costa Hawkins prevents regulating any units exempt when it passed.

I agree. I think it is past time for some type of rent control or other regulation of the rental market for non-rent controlled units, combined with equal efforts to build more units.

Tim, please let your readers know that one of the two democrats who voted NO was replaced by a Republican. I don’t remember who the other ousted Democrat was… maybe someone else can chime in. I think a Republican would vote for more property rights and be against SB364.

Valid point

While everyone’s heart here is in the right place, this legislation and demonstration looks to be a waste of political energy. In the fiscal year ending in February, there were 113 Ellis withdrawals in San Francisco. Meanwhile, at any given time, almost two of three tenancies here is either non-rent controlled or started four or fewer years ago.

140,000-plus tenancies pay market or near-market rent. Spending time and effort to slow 113 evictions while doing little for these 140,000 seems like a mistake.