Tenant Relocation Ordinance Struck Down by Federal Judge

Property owners in San Francisco celebrated a major victory on Tuesday, October 21st when United States District Court Judge Charles Breyer struck down Supervisor David Campos’ Tenant Relocation Ordinance. The ordinance, which was called unconstitutional by Judge Breyer, required owners to pay tenants who were evicted under the Ellis Act the difference between their current rent and the cost to rent the same-sized apartment at market value as a relocation fee. The relocation requirements which were struck down are far less onerous than relocation provisions required under the Rent Stabilization Law in New York City.

Under the ordinance, a tenant’s relocation payout for a more expensive unit could have reached as high as $100,000. With this court ruling, current Ellis Act payouts will be capped at $4,500. Judge Breyer said the law violated property rights because it was requiring owners to pay for conditions that they did not cause, such as the vast increase in the prices of rental housing and the gap between market rates and maximum charges to the San Francisco’s rent-control law.

The Judge stayed his decision until Friday, October 24, 2014 in order to give City attorneys time to determine if they will appeal the decision. The property owners in this case were represented by the Pacific Legal Foundation which will certainly continue this legal battle if the case is appealed.

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