Editorial: New Ellis Evictions Should Spark Ban on Condo Conversions

by Randy Shaw on September 15, 2004

In the past year, Benny Chetcuti filed Ellis Act petitions for six buildings. Was he so worn down from years battling rent control that he chose to go out of the rental housing business? Not exactly. In fact, Chetcuti invoked the Ellis Act soon after purchasing the properties.

John Conomos, who purchased 49 Dorland Street this past June, also turned around and promptly issued Ellis notices. The tenants in this building have lived there for 27-35 years, and are over 70 years old. Activists now realize that the only way to stop these destructive attacks on San Francisco’s elderly tenants is through a total ban on condominium conversions.

When the Ellis Act passed in 1986, it was designed to allow landlords to leave the rental housing business by evicting their tenants and then closing down the property. The chief landlord lobbyist downplayed fears about the bill, saying that there were few landlords who wanted to sit with a vacant building.

But due to the legal sorcery of Republican judges, the Ellis Act took on a life of its own. People who are not in the rental housing business can buy a building, and the next day issue Ellis notices “leaving” a business they never operated.

Assemblymember Mark Leno explained at a North Beach forum on Ellis evictions last week how difficult it is to reform even the most egregious Ellis Act injustices. It took a heroic effort from Leno in 2003 to pass state legislation exempting SRO’s from the Act, and future revisions are less likely with John Burton leaving the Senate and Arnold Schwarzenegger as Governor.

In 1999, Burton tried to impose a time limit requirement on Ellis evictions. The idea was that requiring a new buyer to hold on to the property even for as short as three years would stop the speculative evictions used by Chetcuti,Conomos and others.

But even the powerful Burton could not get this reform through the Legislature. San Francisco’s Board of Realtors intervened to block a deal that would have allowed this and other reforms to Ellis in exchange for dramatically increasing our city’s annual condo limit.

The Board of Supervisors made two strong efforts to address Ellis evictions, but both were rejected by the courts. This gives those concerned about the eviction of elderly and longterm tenants for quick profit two options.

The first option is to publicly bemoan the fate of those evicted under the Ellis Act, and to get local politicians to express their anger at the process. Such an approach makes for sympathetic media stories, but has not deterred the continuous wave of Ellis evictions.

The second and more effective option is to ban condo conversions in San Francisco.

Speculators use Ellis to evict tenants and sell off their units as tenancies in common (TIC’s). Purchasers of TICS assume they will someday be able to convert their units to condos.

If the option of condo conversion were foreclosed, the speculative profit from Ellis evictions would decline sharply. The number of evictions would also drop, and we would see far fewer elderly tenants like the late Lola McKay go to their graves fighting to stay in their homes.

Five of Chetcuti’s six Ellised properties are in the Mission, as is the property at 49 Dorland where the longterm, elderly tenants face eviction. Unless condos conversions are banned, few small buildings in the Mission, Castro, Noe Valley, and North Beach are unlikely to remain rental housing in the next decade.

The conversion of rental housing throughout these neighborhoods is pervasive despite the city’s annual condo limit of 200. The Realtors in 1999 rejected an increase in the limit to 1000 in exchange for bringing TICS under the cap because they saw annual Ellis-initiated conversions as ultimately exceeding that amount.

That’s why the recent proposal put forth by SPUR to increase condo conversions should not be taken seriously. It does not address the ongoing conversion of rental units pursuant to the Ellis Act.

If SPUR wants more condo conversions, the group needs to talk to its Realtor allies about revisiting the deal they rejected five years ago.

Don’t hold your breath..

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