Posted on 10/26/2014 6:46:21 AM PDT by Kaslin
San Francisco is a cauldron of rights, unless you own a home.
Buy a property here and you might as well paint a target on your back. That's what Dan and Maria Levin discovered after they bought a two-unit North Beach home in 2008. They moved in to the upstairs one-bedroom apartment and told the downstairs tenant that they eventually planned to use the downstairs apartment for friends and family. (The state Ellis Act allows property owners to evict tenants without cause if they plan to take the property off the rental market.)
Five years later, the Levins served a notice of termination of tenancy and paid their tenant $2,600 -- the first half of a city-mandated relocation payment, with the second half due when the tenant moved out 120 days later. The tenant claimed a disability, which entitled her to a one-year extension and an extra $3,500.
Dan Levin told me the couple knew the rules and expected to pay off the tenant. They were OK with that. But the couple didn't expect what happened next.
In the spring, by a 9-2 vote, the San Francisco Board of Supervisors adopted an ordinance that "enhanced" the amount landlords would have to pay so it would compensate tenants for renting a comparable place for two years at market rates. Mayor Ed Lee didn't sign it, but with a veto-proof majority, it went into effect in June, even for cases already in the works. Factor in city rent control and the new ordinance can mean a big chunk of change. Suddenly, the Levins had to pay their tenant $118,000 to leave.
On Tuesday, U.S. District Judge Charles Breyer, a Bill Clinton appointee, found the ordinance unconstitutional. Breyer wrote that city law "requires an enormous payout untethered in both nature and amount to the social harm actually caused by the property owner's action." That is, the city wrongly is asking a handful of landowners to shoulder an unfair burden of the cost of an on-fire housing market.
No lie. The new San Francisco ordinance makes getting evicted akin to winning the lottery. There's nothing to stop the recipient from using the windfall funds for recreation -- or as a down payment on a property in a city that recognizes property rights. And without any needs test, Breyer wrote, "the ironic result" of the law is that "those tenants who can afford to pay the highest current monthly rents are entitled to a correspondingly higher payout amount." Two tenants who moved in to another building in 1997 and paid $8,500 per month in rent are now entitled to a payout of more than $220,000.
And then there's the fact that these huge new fees apply essentially retroactively. "I have talked to many people about this law, especially non-lawyers, from all sides of the spectrum, and I haven't found one that thinks it's reasonable," said J. David Breemer, an attorney for the Pacific Legal Foundation, which is representing the Levins pro bono.
Supervisor David Campos, who sponsored the ordinance, disagrees -- and he's a Harvard Law School grad. When you consider "what landlords are making in this market," he said, the ordinance "makes sense. I believe that it's reasonable." Evicted tenants will have to spend money on housing elsewhere. To Campos, the issue is "not just how much money (the Levins are) paying but also how much money are they making in the sale of the property." Except they aren't planning to sell the property now.
The Levins' relocation payment, Campos added, presents a "most extreme case." Better to look at "a typical case." OK. The city controller's office computed a payout of $45,000 for a $900-per-month apartment. That's a lot of money to pay someone to move.
Breyer doesn't disagree that San Francisco has a housing problem. He just doesn't think it's fair to make the Levins pay six figures to atone for a market that is unaffordable for a host of reasons not of their making.
City Attorney Dennis Herrera will appeal Breyer's decision. Campos argues that the ordinance is not retroactive, as it applies only to uncompleted and future evictions. Breemer would counter that the ordinance upset the "legitimate expectations" of property owners by levying an "exorbitant" cost without proper notice.
It came like a bomb you couldn't hear until after it landed.
I asked Levin about his politics. "I'm a lifelong Democrat myself," he told me. "My wife is, too. We vote that way." It bothers the couple that there's no means-testing for tenants, that people with six-figure incomes enjoy a windfall that small-property owners can ill afford.
City Hall drove these Democrats into the loving arms of the usually conservative property rights crowd. Levin told me he doesn't think it's political; it's "a constitutional issue." Don't be so naive. In San Francisco, everything is political, especially the U.S. Constitution.
What a waste of such a beautiful place
Neutron bomb and start all over
I find this alone to be insane. Much less the rest of it.
Pure evil.
Pretty soon there will be no rental properties in pervtown
I have no sympathy for this couple. This is what they voted for!
With rules like that, there will be no rental properties at all. How does this help the poorer residents long term? Oh, there won’t be any.
Excellent point
I have only visited once and , despite it’s natural beauty, it left me with a depressed sort of feeling. Also the feeling of needing a long, hot shower.
Stick a penny in the fuse box and burn it down
“With rules like that...”
Bingo. The article doesn’t take
an economist’s stance. Tenant
“protections” are the disincentives
for landlords that create lower
supply and higher rental prices.
Pols know that and use it to make
themselves the perpetual saviors of
“the little guy.” The US constitution
was written to allow only property
owners the right to vote for a reason:
“the little guy” can’t figure out why
he’s being had.
It might be that the only way out of this is eviction by oxidation, where the newly bare lot will be worth more than the lot plus house with the very expensive renter.
“”On Tuesday, U.S. District Judge Charles Breyer, a Bill Clinton appointee, found the ordinance unconstitutional””
Is it unconstitutional or not? It is written as tho’ the law is being enforced regardless of the court action and opinion! I don’t get it.
“”I have only visited once and , despite it’s natural beauty, it left me with a depressed sort of feeling””
I lived in Sacramento for years and always looked forward to trips to “the city.” There was an atmosphere there unlike no other city I’ve ever visited. Just seeing and traveling over the bridges was thrilling to me.
did you like the Folsom Street Festivals?
Who knows anymore? It’s hard to get actual answers from “journalists” or columnists any more.
exactly
We were 24 and actually contemplating moving there. We left the east coast and set out for greener pastures. I looked at my boyfriend (now my husband) and said, "I can't live here--let's go back to the Southwest". We decided on Albuquerque, did that for two years and then Phoenix for the next 17--give or take for a few stints here and there.
Until I found out they were dems I was going to suggest they speak to one of Oakland’s motorcycle enthusiasts clubs. I understand they can provide personal on-site relocation counseling while providing compelling evidence of the joys of moving and the avoidance of orthopedic adjustments in situ.
All for a nominal cost far less than city imposed costs.
A tenant is not a parasite. They are paying and you have a contract with them. In this case, the city used the law to retroactively change the contract, which is unjust. But I’ve been a tenant before, and I wasn’t sponging off of anyone. Nor could I be evicted immediately on the owners whim - both the law and our contract prevented that.
We have friends who bought a four unit apartment house on Telegraph Hill that was fully rented when they purchased it (probably 15 years ago). For the first year or more, when they came to town (their primary residence was out of state) all they could do was stay in a hotel and have lunch on the rooftop garden of their property. Then the city came in and required earthquake retrofitting (which required that they “relocate” the first and second floor tenants at their expense while the work was being done). They managed to “payoff” the second floor tenant so they would agree not to come back. So now, after a couple of years, they could actually stay in their own building. But they wanted to occupy the penthouse, which was at the time occupied by a 60 plus year old single accountant (this is important because the rules are more stringent for people over 60 is SF). After five years, somehow their third floor tenant moved out and they were able to “move up,” but the penthouse seemed elusive. But finally luck hit, the penthouse occupant got himself a girlfriend ( I guess there is sex after 60) who lived out in the Valley and he left. So it took them ten years to get to live in the top floor unit of their own building. Their only other option at the time of purchase would have been to kick everyone out ( with suitable cash for leaving) and agree to not rent any part of the building for ten years.
What’s really funny is that they are a childless couple who are both very liberal RATS, so it’s been interesting to see how laws that seemingly they support (but for thee not for me though) work against them. The other issue is SF’s rent control statutes only allow landlords to raise rents no more than 60% of the actual increase in the COL each year, which results in landlords not having the means to maintain their properties. Go figure.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.