San Francisco’s housing market reflects the nation’s recovery from the Great Recession as it unfolds amid growing income inequality. Tech is booming and money is flowing into the city, while real estate prices escalate and evictions of lower-income, elderly and disabled renters quickly return to pre-bust levels.
The speed at which it is returning is getting noticed and personalized. The story of an elderly Chinese couple, Gum Gee Lee and Poon Heung Lee, and their 48-year-old mentally disabled daughter Shiuman Lee, being evicted from their home of 34 years is getting national attention. Protesters rallying outside City Hall tell painful stories of dislocation, hopelessness and looming homelessness.
Suggestions have been offered by lawmakers and tenants rights advocates on how to mitigate the impact and, perhaps, slow the process. But there’s not a lot of talk about changing the law empowering the gentrification—California’s Ellis Act.
The Act was passed by the state Legislature in 1985 after inflation of the 1970s helped inspire ordinances to stabilize the rental market, often helping lower-income residents. The Ellis Act undoes that by allowing landlords to evict tenants and sell the apartments as tenant-in-common units, on the way to becoming condos. It frees up a competitive marketplace at the expense of those who can’t compete.
There were 114 Ellis Act evictions between March 2012 and February 2011, compared to 64 during the previous 12 months.
A decade after its passage in 1985, there were zero Ellis Act evictions in the city. There were two in 1996, but the word was out, the Dot.com boom was on and three years later evictions peaked at 503 households. The Dot.com bust in 2000 helped drive evictions down to 164 in 2002 before Dot.com 2.0 helped reinvigorate the market. Ellis Act evictions rose, with stocks and real estate prices, to 373 in 2005 before edging down. The evictions fell off a cliff, along with the economy, in 2009, bottoming out at 71 two years later.
But the city has bounced back. The average asking price for rents is up 11.9% in the third quarter, hitting a record $3,096, according to data service RealFacts, while the number of Ellis Act evictions has more than doubled since 2011. An animated Ellis Act map fairly explodes off the screen as it traces the history of evictions in the city.
The San Francisco Board of Supervisors passed a condo conversion moratorium in June, after years of debate, that was supported by renter advocates but still allows thousands of conversions. Supporters of tenant rights want to increase relocation payments to displaced tenants and define tenancies in common as rental agreements, which would block Ellis Act evictions by technically keeping the properties in the rental market.
But it’s a wish list and the groups that are rallying in public and in the press in support of evicted tenants, like labor, are fighting a rear-guard action as they watch teachers, city workers and other union professionals, driven from the city.
At a Mission District protest a few weeks ago, Supervisor John Avalos reportedly said, “I am so sick at heart that San Francisco keeps building luxury housing that no one here can afford.”
By “here,” presumably, he meant right there at the rally. Because there seems to be no shortage of well-paid people elsewhere who want to buy their homes. That probably won’t change until the next economic downturn or a reversal in the political drift.