Landlord’s Property Rights Upheld in San Francisco
1. Landlord’s Property Rights Upheld in San Francisco
In the case of Levin v. City and County of San Francisco, 9thCir., Court of Appeal, Case No. 14‑03352 CRB, the 9thCircuit which is notoriously liberal, has upheld the judgment in the District Court restraining the City and County of San Francisco from wrongfully taking a landlord’s property rights without just compensation.
In this case, the Levins own a duplex in San Francisco. They wanted to take the lower unit out of the rental market pursuant to the Ellis Act, and use the lower unit for family and friends. However, San Francisco enacted an ordinance that required the Levins to pay their tenant $118,000 in order to withdraw the unit from the rental market. This amount represents the difference between what the tenant’s existing rental-controlled rate was and the cost of acquiring a comparable unit at open market rates, for two years. What a great socialist idea, making hard-working landlords assist the downtrodden with a free gift of $118,000. Makes you want to move to San Francisco.
The Pacific Legal Foundation sued the City and County to strike down the ordinance as an unconstitutional taking and violating the Fifth Amendment and the Ellis Act, which guarantees property owners the right to take property off the rental market. The court determined that the City’s ordinances held the landlords hostage by conditioning the right to exit the rental business on paying extortionate sums of money to their tenants. The court determined that the ordinance financial demands were unconstitutional because the landlords were being forced to bear the cost of social problems, such as overall rental housing shortages and high costs that they did not cause. In addition, owners were being forced to shoulder the general societal burden of solving housing issues by compelling the owners to give their property to others. The City lost in District Court and appealed to the 9thCircuit. The 9thCircuit refused to overturn the District Court. Since then, San Francisco has repealed the law and has replaced it with another law in a continued attempt to make landlords subsidize rental housing.
Comment: Oregon just enacted state-wide rent control. California is attempting to do the same thing, but so far has not been successful.
About the Author
Scott Souders is a real estate attorney who has practiced real estate law in excess of 42 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.