| Government Affairs |
SB 1439: The Roller Coaster Ride Continues; Private Property Rights in Peril
It failed with the help of State Senator Jerry Hill; no, it passed with the help of Hill; at least that's what happened last week with Senate Bill 1439 (Leno). SB 1439, which makes substantive changes in the Ellis Act for income property owners, failed passage in the Senate on an 18-19 vote. C.A.R. and SAMCAR opposed the bill.
DOA, right? Not so. There's a courtesy provision in the legislative protocol that a bill's author can ask for reconsideration if their bill fails in committee or on the floor and Leno was granted same. (That and the Senate Democratic leadership pressured legislators to resurrect Leno's proposal as last week was the deadline that a bill must report out from one house (Senate) to the other house (Assembly) or die. Moreover, Leno promised fellow Senators - in return for their votes - to make amendments to the bill.)
Jerry Hill (along with Sens. Ben Hueso and Ed Hernandez) changed their votes from OPPOSE to SUPPORT, which then allowed SB 1439 to eke out of the Senate with the minimum 21 'ayes.' (Actual vote: 21-13.) SB 1439 now moves to the Assembly.
Leno posed conceptual wording for his amendments that he says would:
- Differentiate speculators from landlords. He offered no specifics.
- Exempt small 'Mom-and-Pop' property owners. He used two units as an example.
- Add a sunset provision. He gave no time limit.
Despite Leno's offer of amendments, this legislation will weaken the Ellis Act, a landmark law that bars local governments from making property owners stay in the rental housing industry. Passed in 1985, the Ellis Act particularly helps owners of properties in rent-controlled cities where landlords can find themselves operating at a loss. Under Leno's current version of the bill, San Francisco would be authorized to place the Ellis Act out of reach for newer property owners.
SB 1439 will force an owner of rental property in San Francisco to wait at least five years before removing his or her rental units from the market and it's not immediately clear how Leno's amendments would further impact property rights. The bill is presented as a "San Francisco only" piece of legislation when in fact, such pilot programs often crop up in other jurisdictions and can ultimately become statewide in scope.
Current state law (i.e. THE ELLIS ACT) also maintains the authority of local government to regulate the subdivision or subsequent use of the property and to mitigate any adverse impact on displaced tenants. And the Ellis Act applies ONLY when an owner seeks to remove all units within a building or all units on a property with a building containing three or fewer units, from the market.
The real effect of the Ellis Act is only in cities or counties with rent control and just cause eviction ordinances, and San Francisco has both, thus the need for SB 1439 remains questionable. Hill is quoted regarding his support for the bill as saying he had concerns about how his constituents who own property in San Francisco would be affected.
