Speculators who evict tenants under the Ellis Act in San Francisco are seeing staggering profits, and paying only a tiny fraction of that money to help the victims relocate, a new city study shows.

In some cases, the value of Ellised properties have increase by more than 400 percent, and the average profit from selling the vacated units is $429,000, the report by the city’s Budget and Legislative Analyst shows.

Only 5.2 percent of that money goes to relocation fees and expenses to displaced tenants, the data, which covers the past ten years, shows.

The report shows the need to significantly increase the modest relocation fees that landlords have to pay tenants who are evicted under the Ellis Act, Sup. Myrna Melgar, who asked for the report, told me.

“That’s what we’re looking at,” she said.

The Ellis Act, one of the most abused state tenant laws, allows landlords to throw all of their renters out in the name of “going out of business.” Then they can sell the vacant buildings as tenancies in common, the rough equivalent of condos.

Most of these evictions don’t involve longtime landlords who are tired of managing rental property. In the vast majority of San Francisco cases, speculators buy apartment buildings with longtime tenants under rent control, cite the Ellis Act to evict everyone, then flip the building for a quick profit.

Under current local law, the evictors are required to pay $7,419 to each tenant, up to a maximum of $22,257 for a household. That, the report says, is just 5.2 percent of the profit that the typical speculator makes on the deal.

More: The relocation costs aren’t even enough to cover first-and-last month’s rent on a new apartment:

The required relocation payments for a single tenant in a 1 bedroom unit moving to a market rate 1 bedroom unit would not be sufficient to cover first and last months’ rent, a security deposit (one month’s rent), moving costs, and lost wages for five days spent packing and moving (conservatively assuming a minimum wage job in San Francisco). We estimate the deficiency in such a scenario to be $2,470 based on a relocation payment of $7,419 and relocation costs of $9,889.

The BLA examined 59 properties, representing 135 housing units, over the period of 2011-2021.

We found that the median assessed value of … such properties … increased by 464.5 percent from $299,470 in FY 2011- 12 to $1,690,650 in FY 2020-21, or by approximately $1.4 million. This rate of increase exceeds the 223.4 percent increase in assessed value for all properties for which Ellis Act Withdrawal Petitions were filed during that same period (which includes those that were not sold after the Ellis Act Withdrawal Petition was filed). It also exceeds the increase in all home values ​​in San Francisco of approximately 116 percent between 2011 and 2021 as reported by Zillow. All of this data indicates that evicting tenants through the Ellis Act corresponds to increased value of the properties, particularly if they are sold, but even if they are not.

More:

Finally, we further analyzed the financial impacts of Ellis Act evictions by analyzing the change in sales price for just those properties for which the owners filed an Ellis Act Withdrawal Petition and subsequently sold the property. Comparing the most recent sales prices prior to the Ellis Act Withdrawal Petition with the sales price after the Ellis Act Withdrawal Petition was filed for 38 properties representing 73 housing units, we found a median change in price of $949,688 for all properties, or $429,000 per unit .

This is pretty dramatic information, and it shows why so many speculators want to buy buildings in San Francisco and evict all the tenants: the profits are giant.

In 2014, then-Sup David Campos introduced a bill to raise the relocation fees; Under his proposal, an evictor would have to pay tenants the difference between their current rent and market rent on a similar apartment for two years.

(The federal standard for people forced to move when the government wants to, say, build a freeway, includes that same level of payment for four years.)

Then-Sup. London Breed tried to derail it, but it wound up passing the full board.

A right-wing property-rights group sued in federal court, and Judge Charles Breyer struck it down.

The city decided not to appeal.

So now it’s going to be up to Melgar, her colleagues, and the city attorney to figure out a way to use the data in the BLA report to craft legislation raising the relocation fees in a way that will pass court muster.

The post San Francisco Bay Guardian | The gorgeous speculator income in Ellis Act evictions appeared first on Los Gatos News And Events.

From Dr. Marcy Adelman-

Although the San Francisco eviction moratorium has been extended to November 30th and additional laws are pending to extend it through December 31st, evictions and threats of evictions have continued. The moratorium does not apply to non-payment cases, Ellis Act cases, or cases of violence or public safety.

Legal Assistance to the Elderly (LAE) has quietly and effectively provided free legal assistance to low-income seniors and adults with disabilities in San Francisco for over 40 years. I asked Laura Slade Chiera, Executive Director, about LAE’s services during the pandemic. She told me for the San Francisco Bay Times, “We have received requests for help with protection against physical abuse, help with unemployment, and assess early retirement, rent payments, and access to health care issues. But by far the largest percentage of calls revolve around evictions or fear of eviction. “

“Many of the calls come from those who are most at risk,” she added. “For example, a disabled trans woman who speaks monolingual Spanish in her late fifties received an eviction notice. She had been in her apartment for 11 years and had paid her rent during the pandemic. She spent the whole winter in her apartment without heating, despite repeatedly asking the landlord to repair it. In addition, she was harassed by the property management team, who made transphobic and racist remarks to her and her friends and harassed her about her immigration status. During this stressful time, a roommate left to help pay the rent. And an operation that kept her from work resulted in her unable to pay the rent. She felt hopeless and was afraid for her future. ”

“She asked us for help,” Chiera continued. “Faced with a defense based on retaliation for demanding repairs, the landlord canceled the owner’s eviction. LAE was able to secure the client’s rental support during this time, and with the eviction threat gone, the client was able to find a new roommate to help pay the ongoing rent. The landlord has carried out the necessary repairs at reasonable times of the day and our customers’ lives have returned to normal. “

LAE’s customers are as diverse as the city itself: blacks, indigenous people, Latinx, API, LGBT, seniors and people with HIV. LAE is a frontline nonprofit that is saving people from homelessness by helping people stay in their homes.

Chiera said: “A large number of calls have come from people living in SRO or single occupancy hotels. SROs are small, rented, furnished rooms in multi-tenant buildings in which the tenants share the kitchen, toilet and bathroom. Tenants are afraid of what could happen to them if they are evicted in the middle of a pandemic. “

She continued: “At the beginning of the pandemic it was particularly tough for the people in the SROs. People were encouraged to stay in their room. These rooms are 8 x 8 in size. Getting food or home care was a challenge. You can understand what a stressful environment this was and how it affected a person’s physical and mental health. “

“It was also a challenging time for the staff,” she added. “Despite the health risk for our older clients, we still had to appear in person in court and at hearings. The staff worried about their customers and themselves. It was very stressful. But we did it together. “

Chiera has been the Executive Director of LAE since 2016. Under her leadership, LAE has increased its budget, tripled its staff and, consequently, increased its impact on senior citizens at risk in San Francisco. Although the majority of cases focus on home preservation, LAE has several other areas of practice, including helping seniors and disabled adults struggling with debt collection; Problem with fraud; physical or financial abuse; and assistance with problems related to Medi-Cal, Medicare and In-Home Supportive Services. In addition, LAE, in partnership with the AIDS Legal Referral Panel, provides life planning for older LGBTQ adults and adults with disabilities who require a basic will and health care instructions.

In the past year, LAE opened about 1,550 new cases. With so many of their customers lacking access to technology services like Zoom, they expanded their mobile services, met customers at home, and exchanged documents through the mail. They also worked closely with the Latino Task Force’s COVID-19 Response Centers in the Excelsior and Bay View neighborhoods, which provide housing law services.

Chiera concluded, “It’s too easy to get cynical about the city’s problems. It is important to remember that the people we serve built this city and now it is our turn to help them. You may have worked all your life but still cannot keep up with rising rents. The city needs to expand housing subsidies and provide more affordable and accessible services and health care at home. San Francisco can do this. “

Legal assistance for the elderly: https://laesf.org/

AIDS Legal Referral Panel: https://tinyurl.com/575xs89h

Dr. Marcy Adelman, psychologist and LGBTQ + longevity advocate and political advisor, is responsible for the Aging in Community column. She is a member of the California Commission on Aging, the board of directors of the Alzheimer’s Association of Northern California, the California Master Plan on Aging Equity Advisory Committee, and the San Francisco Dignity Fund Oversight and Advisory Committee. She is the co-founder of Openhouse, the only nonprofit in San Francisco that focuses solely on the health and wellbeing of LGBTQ + older adults.

Published on October 21, 2021

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