SMDP Staff Writer
Since passing in 1985, the Ellis Act has been the ire of rent control supporters, who are frustrated by the rate at which it drives no-fault evictions of rent controlled tenants. After several past failed attempts at legislative reform, a bill has been reintroduced in Sacramento that aims to limit Ellis evictions and was co-authored by both Assemblymember Richard Bloom and Senator Ben Allen of Santa Monica.
The bill’s principal author is Assemblymember Alex Lee, who represents the South Bay of San Francisco between the East Bay and Silicon Valley. He initially introduced the bill as AB 864 in 2021 and is reintroducing it as AB 2050 with minor tweaks to address assemblymember concerns.
If passed, the bill would prevent landlords from utilizing the Ellis Act to evict rent controlled tenants within their first five years of ownership. The aim of the bill is to return the Ellis Act to its original purpose, which is to assist mom and pops landlords in exiting the rental business when they are losing money on a property.
“Assemblymember Lee has introduced a common sense solution to protect tenants while preserving the purpose and integrity of the Ellis Act, which was passed in 1994 to allow mom and pop landlords to exit the rental business. The Ellis Act is currently being abused by speculative investors having no interest in the rental business but buying up rental property only to then turn around and evict the tenants because suddenly the investor wants to get out of the rental business,” said Assemblymember Richard Bloom.
Detractors of the Ellis Act complain that it is utilized by speculative investors to snap up rent controlled housing, evict the tenants and then sell the property on for a higher profit. A 2014 study completed by Tenants Together & The Anti-Eviction Mapping Project found that 78 percent of Ellis Act evictions in San Francisco are commenced by landlords within their first five years of owning the property. AB 2050 is designed to deter investors from purchasing properties with the specific intention of using the Ellis Act to evict tenants.
“This is common sense reform and good governance, plain and simple. The Ellis Act was never intended to allow serial evictions of tenants in order to flip or to empty out properties for speculative profits,” said Santa Monica Rent Control Board Commissioner Anastasia Foster. “This needs to be corrected, and this is the legislation to do it.”
The earlier version of the bill AB 864 faced strong pushback from owners of rental properties. It was nicknamed as the “Stay in Business Forever Act” and criticized for forcing property owners to stay in the rental business even if they are losing money on a property. The California Apartment Association was strongly opposed to the bill and coordinated an email writing campaign calling on Assembly members to reject it.
Both AB 864 and the updated AB 2050 contained exceptions so they would not apply to mom and pops landlords. This is designed to ensure that such landlords can still use the Ellis Act at any time if they cannot economically sustain their rental business.
The Ellis Act is currently the primary means by which rent-control tenants are forcibly evicted and rent controlled buildings are taken off of the market. In Los Angeles, the law has resulted in over 27,000 evictions since 2001.
Assemblymember Lee pitched both AB 864 and AB 2050 as a means to help confront the affordable housing and homelessness crisis by protecting rent controlled tenants from losing their homes. The bill has drawn support from tenants’ rights organizations.
“Any effective effort to address our affordable housing crisis must prioritize preserving our existing affordable housing along with producing new affordable housing for we will never solely build our way out of our affordable housing emergency,” said Larry Gross, Executive Director of the Coalition for Economic Survival. “The Ellis Act undermines meaningful efforts to do so, and the passage of AB 2050 must be seen as a crucial component to meeting the state’s affordable housing needs.”