The Recorder - February 22, 2006
APPEAL PANEL UPHOLDS RENTERS' ORDINANCE
By Pam Smith

A state appeal court on Tuesday rejected a challenge to a San Francisco rent law that forces landlords to pay $4,500 to tenants evicted under the state's Ellis Act.

Last year, San Francisco Superior Court Judge James Warren had sided with the landlords, concluding that the city ordinance ran afoul of the state law that protects property owners' right to get out of the rental business.

The First District Court of Appeal rejected the plaintiffs' facial challenge to the city ordinance in Tuesday's unanimous, unpublished opinion, but left the door open for future plaintiffs to try to show the local law is unfair.

The opinion, by Justice Maria Rivera, found that requiring payment for relocation costs doesn't violate the Ellis Act, though it's still an open question whether the amount San Francisco requires is reasonable.

Justice Patricia Sepulveda and San Francisco Superior Court Judge John Munter, sitting by assignment, concurred.

In his decision last year, Warren cited case law that concluded the Ellis Act limited such city requirements to landlords evicting low-income tenants. But the First District found that case law irrelevant, since 2003 revisions removed the low-income language that was parsed in the earlier case law.

Given the current language, the appeal court said the city's current demands do not necessarily conflict with the Ellis Act.

Deputy City Attorney Vince Chhabria, who argued the case, said the Ellis Act leaves it to local policymakers to decide how to alleviate the "plight" of evicted tenants, "and the court really reaffirmed that basic principle."

Andrew Zacks, of San Francisco's Zacks Utrecht & Leadbetter, said his clients plan to petition the First District for a rehearing. At oral argument, he noted, the justices asked him how they could tell whether a city's requirement creates too high a burden for landlords.

"I didn't have a very good answer in oral argument, but I have a really good answer on rehearing," Zacks said. He contends the city is using its law to discourage Ellis Act evictions, and said he'll point out that San Francisco makes landlords pay less to tenants they kick out under other circumstances, such as an owner's decision to move in.