A number of housing industry non-profits and organizations filed suit today against the City and County of San Francisco in California Superior Court, challenging the Buyout Agreement ordinance, recently passed by San Francisco’s Board of Supervisors, as unconstitutional.
To learn more about the specifics of the buyout ordinance, please see yesterdays blog post: “San Francisco has adopted a new ordinance regulating Buyout Agreements”
The legislation, sponsored by Supervisors Campos, Avalos, Kim and Mar, was passed by the full Board of Supervisors in late October and becomes effective Saturday, March 7, 2015. The law is being challenged by plaintiffs the San Francisco Apartment Association, the Small Property Owners of San Francisco Institute, the San Francisco Association of Realtors, the Coalition for Better Housing and Norm Larson, a small property owner in San Francisco.
“It is important to note that in the 2004 San Francisco Superior Court case Baba v. Board of Supervisors in San Francisco, the courts found that certain aspects of the Rent Ordinance that regulated communication between landlords and tenants were unconstitutional, and that restrictions on the regulation of speech between property owners and tenants was unlawful. We believe the Court will also overturn the unlawful aspects of this ordinance” said Janan New, Executive Director of the San Francisco Apartment Association.
“In attempting to regulate an agreement between two private parties, the legislation likely violates the First Amendment right to free speech. It provides restrictions, and seeks to punish property owners for exercising a right that every individual has: to enter into a mutually acceptable contract with another person. Additionally, the ordinance conveys a set of rights to one group of people, San Francisco tenants, and denies those same rights to another group, San Francisco property owners,” stated Walt Baczkowski, CEO of the San Francisco Association of Realtors.
“In addition to opening up the City to liability, this legislation presents a procedural quagmire that is nearly impossible for the growing population of monolingual property owners, property owners who speak English as a second language, and property owners who do not have the benefit of an attorney to navigate. The buyout ordinance is so onerous and riddled with procedural requirements that it sets up underrepresented, monolingual and immigrant property owners for procedural noncompliance, and will undoubtedly increase litigation between property owners and tenants. We are at a time and place in our city where we need to encourage cooperation rather than litigation,” said Small Property Owners of SF Institute President Noni Richen.
“Aside from being illegal, the buyout ordinance will only bring harm to both property owners and tenants. In attaching the same restrictions on condominium conversions that apply to buildings that have been Ellis Acted, this legislation propagates unhealthy and wildly inaccurate myths about buyouts, and removes all benefit of a buyout, which helps many tenants put a down payment on a new home. In doing so, the ordinance incentivizes use of the Ellis Act in a way that is contradictory to the City’s housing goals. The unconstitutional restrictions and the unintended consequences of the law are far too great,” warned Brook Turner, Executive Director of the Coalition for Better Housing.
The leading plaintiff organizations hope to continue a recent string of legal victories against the City and County of San Francisco, where a number of housing laws and regulations have been passed by the Board of Supervisors in the past year and a half but have not sustained legal muster. The organizations have recently succeeded in overturning property restrictions prohibiting units from being made bigger or merged to accommodate growing families, and in striking down exorbitant relocation fee payments where Ellis evictions have taken place. The organizations are seeking declaratory and injunctive relief against the Buyout ordinance.
For more details on this new ordinance on SF buyout agreements, click here.