San Francisco increases relocation payments to tenants facing Ellis Act evictions

To the chagrin of many tenants, relocation payments in no fault evictions have, for a long time, been little consolation for losing a rent controlled apartment unit in San Francisco.  As of June 1, 2014, the rules have changed – at least a little – for the better.  This month we examine the new law and what you can expect.

Who is effected?
The rule applies to all residential units covered by the San Francisco Rent Ordinance.  However, only those tenants facing “no fault” evictions under the Ellis Act are entitled to additional relocation payments under the new law.

What are the changes?
Prior to June 1 each tenant  facing an Ellis Act eviction was eligible for a relocation payment in the amount of $5,157, with elderly and/or disabled tenants entitled to an additional $3,438 – though this figure increased each year to reflect inflation.  This number was also subject to a “per unit” cap.

As of June 1, 2014tenants in affected units are entitled to the greater of the existing Ellis relocation payment amount (the $5,157 referenced above) and what is being called the “rental payment differential.”  The rental payment differential is defined as an amount equal to the difference between the unit’s rental rate at the time the landlord files the notice of intent to withdraw rental units with the Board, and the market rental rate for a comparable unit in San Francisco as determined by the Controller’s Office, multiplied to cover a two-year period, and divided equally by the number of tenants in the unit”.  

What does that mean in non-legal terms?
Namely that your relocation payment could be based on the number of years you have lived in your unit rather than being just a flat amount. The longer you’ve been in your unit, the higher the multiplier.  The San Francisco Rent Board’s website provides a helpful worksheet which you can use to plug in the figures to determine what you would be entitled to under the new law, which you can find here.

Is this a good thing?
In short, yes.  San Francisco has been slow to respond to the tremendous rise in rental rates throughout the region.  Because of rent control and the difference between rent controlled rents for long term tenants and market rate rent landlords have every incentive to terminate long term tenancies any way they can muster.  One method landlords have been using to terminate tenancies is via the Ellis Act because prior to this new law, they could evict a tenant for a mere $5,157 give or take – a drop in the bucket compared to what a tenant might otherwise demand to give up their apartment.  Raising the amount that tenants are due in Ellis Act evictions should help even the playing field by making Ellis evictions less attractive to landlords.  Of course, there is an argument that the change is not enough.  Whether the change ultimately reduces the number of Ellis evictions in the City remains to be seen, but at least it is a step in the right direction.

Do Landlords have any “outs”?
Yes. Under this amendment, landlords can file a request for a hearing for a hardship adjustment with the Rent Board where payment of the Rental Payment Differential would constitute an “undue financial hardship.”  What constitutes a financial hardship is not specified.  We can only hope this loophole doesn’t leave the law without teeth.

So do I just take the money if my landlord says that he’s going to evict me under this law?
Absolutely not.  Before you do anything you should speak to a tenant attorney to discuss your options.  Whether you are low income or not there are resources available.  The worst thing you can do is to sign something or move out according to your landlord’s wishes without talking to someone.   Your landlord may not have your best interests in mind.  

[1] From 2010 to 2013, the number of Ellis evictions in San Francisco has jumped 170 percent, with 116 evictions under the law from March 2012 to February 2013. SF Politicians: Restrict Ellis Act evictions, John Cote and Marisa Lagos, SF Chronicle