Debunking SF Mag’s Ellis Act apologist article, point by point

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San Francisco Magazine's "The Power Issue" features Ed Lee front and center.

Well, everyone’s got an opinion. And when it comes to San Francisco’s housing crisis, that’s doubly true.

San Francisco Magazine’s opinion though, amounts to a cry for help for (they say) the oft-demonized landlords from what they call the ever-overblown Ellis Act eviction crisis.

In his Tweet earlier today, San Francisco Magazine Editor-in-Chief Jon Steinberg said “We’re calling BS on San Francisco’s eviction crisis.” The article, by San Fran Mag Web Editor Scott Lucas, lays out a San Francisco that’s hard to recognize, one where evictions and rental increases aren’t displacing people in droves. At least, not enough to qualify as a “crisis.”

Sorry Jon, we’re calling BS on your article.

The Guardian reached out to Ted Gullicksen, executive director of the San Francisco Tenant’s Union and Erin McElroy, the head of the Anti-Eviction Mapping Project, to debunk some of the claims made in SF Magazine’s attempt to de-fang the threat of Ellis Act evictions. 

You can read the full article here, but we’ve reproduced lines from the piece and included responses from Gullicksen and McElroy addressing their points one by one. 

San Francisco Magazine The narrative was a straightforward one: Because the Bay Area has seen an influx of people—largely young, white, and working in tech—who need housing (and can pay for it), greedy landlords, many of them out-of-town speculators, are throwing longtime San Franciscans into the streets and turning the city over to gentrification. It looked cut-and-dried.

It’s not. In fact, Ellis Act evictions represent only a small proportion of the city’s total evictions—and they’re not even historically high to begin with. 

Ted Gullicksen That is incorrect on a couple levels. First off, it’s important to understand that the main way people are evicted these ways are via the Ellis Act followed by a buyout. The reason for that is that San Francisco passed strict condominium conversion prohibitions several years ago. If you do an Ellis, you generally are not going to be able to convert to condos ever. 

(You need to) include the Ellis threats… for every single Ellis Act eviction filed with the rent board, they’re where the speculators tried to get the tenants to bite… for every Ellis Act eviction, there are about five buyouts where Ellis Act was used as a club.

I come to that number by the number of people coming to the Tenants Union concerned about buyouts, and comparing those with the rent board’s numbers. Pretty consistently we see 33 percent of what the rent board sees. 

Erin McElroy California is the only state where the Ellis Act is utilized, it’s hard to say whether it’s historically high or not. We also see it’s being utilized by landlords repeatedly. It’s being used as a business model, not a way of going out of business which was its intended use in 1986. 

SFM In the 12-month period ending on February 28, 2013, the total number of Ellis Act evictions was 116—an almost twofold increase over the previous year, but a nearly 70 percent decrease since 2000, when such evictions hit an all-time high of 384. All told, the Ellis Act was behind less than 7 percent of the 1,716 total evictions in the city between February 2012 and February 2013. “Isn’t it far more likely,” asks Karen Chapple, a professor of city planning at UC Berkeley, “that more units are being lost [from the market] through Airbnb?”

TG That number, the 1,716 number, includes “for fault” evictions. If you just include no-fault evictions, Ellis Act evictions are the highest amounts. No-fault evictions are the ones we’re all talking about here. There are a number of rental units lost from the market and that’s a big problem, but the TIC and condominium conversions far surpass tourist conversions (like AirBNB).

EM First of all, for every Ellis Act being recorded, there is not a recording of the units evicted. While you can say there is a number of evictions, it doesn’t represent the units or people being displaced: it doesn’t record the number of people losing their homes.

What we’ve done through the Anti-Eviction Mapping Project is to match those petitions with the number of units. If you go to our website you can see the number of units lost since 1997 in each petition. While the city (of San Francisco) only recorded about 1,300 Ellis Act evictions since then, there have been at least 4,000 units lost. We don’t know how many people are in each unit. There could be between 1 and 6 people in each on average. 

SFM Laying the blame on nefarious Rich Uncle Pennybags types isn’t exactly right either. A recent report commissioned by Supervisor David Campos is clear on that point: The increase in Ellis Act evictions, it found, “occurred simultaneously with significant increases in San Francisco housing prices.” In other words, the problem isn’t speculators. It’s the market. 

TG The problem is indeed the speculators. Most of these buyouts are done by speculators, of the current Ellis Act evictions right now, most of the buyouts are done by one of twelve speculators. 

The Anti-Eviction Mapping Project showed that these real estate speculators form Limited Liability Corporations for each building. The Anti Eviction Mapping Project went through all these LLC’s and identified actual owners and compared them to Ellis Act evictions at the rent board. One person involved is doing six Ellis evictions right now. 

EM Speculators are taking advantage of the market. If there weren’t people to buy luxury condos, Ellis Act evictors wouldn’t buy up the units and turn them into condos. 

It’s one thing for a landlord to issue an Ellis Act one time because they’re done being a landlord, it’s another to see serial evictors use it over and over again through Limited Liability Corporations. Urban Green has 40 or so LLC’s, they’re using them all to push the Ellis Act. See our serial evictor chart and you’ll see 12 different people that use that serial evictor model. It’s a way for them to make money. 

SFM The city simply doesn’t have enough housing to keep up with job growth. And as real estate values rise, the incentive for a property owner to sell grows considerably. No villainy. Just economics.

TG The city is building a ton of housing, as anyone can tell you. The city, though, is building nothing but luxury condos. There’s plenty of housing, but nothing affordable.

EM If displacing long term residents and folks with disabilities and seniors is just economics, it’d be an argument against our economic system. The city offers services for trans folk, queer folk, people with HIV, all reasons people moved to San Francisco and it has a popular place in people’s imagination. Native San Franciscans are also not being valued. If that’s economics, San Francisco has lost its heart and its soul.

SFM Even if incremental changes happen, San Francisco’s affordability problem will likely continue almost unabated. Ellis Act evictions are, in Chapple’s words, not a cause of the housing crisis, but rather “a symptom. Fixing it is like using a Band-Aid for brain cancer.”

TG The Ellis Act is in fact a cause, because it’s taking thousands of units off the rent control market. When we’re losing more and more rent control units, supply dwindles and the rents go up. 

EM I would agree the Ellis Act isn’t the cause of the problem. The problem is it’s being utilized with other forms of evictions for landlords to take advantage of a political economy with the relationship between the city and tech. The problem is the relationship with the new tech class and the impunity it maintains through city government.

Comments

Re SFM's claim:

"It’s not. In fact, Ellis Act evictions represent only a small proportion of the city’s total evictions—and they’re not even historically high to begin with. "

If you read their answers neither Gullicksen nor Erin McElroy debunked this.

Yes, the SFBG said that they debunked it but...well...you know.

On another one SFM stated that 7% of the 1,716 evictions were Ellis related, 93% were 'at fault'. For every Ellis eviction there were more than 13 resulting from bad tenant behavior. So Gullickesen ably debunked this by saying "No-fault evictions are the ones we’re all talking about here."

Great debunking!!!!!!

Posted by Guest2 on Jan. 20, 2014 @ 8:06 pm

The number of Ellis Act evictions remains trivial - just one unit in 10,000 was Ellis'ed last year.

Ted should worry more about the far larger number of tenants who get evicted for getting an illegal pet or sublettor, or for being late with their rent.

Posted by Guest on Jan. 21, 2014 @ 7:03 am

To the author and the editor,

What would really help tenants is for you to provide a bigger list showing all of the buildings that the dirty dozen serial evictors own, so that any reader can tell if they are at risk.

It would also help to show any umbrella companies which formerly owned the buildings, where the umbrella companies are still owned by the same speculators who own the new building LLCs themselves.

Posted by Eric Brooks on Jan. 22, 2014 @ 9:46 am

if that building is owned by a trust, corporation or foreign entity.

In any event, these owners own buildings that they Ellis and buildings that they do not Ellis. the key factor is the cashflows of the specific building and not who owns it.

The best way for a tenant to determine if he is at risk is simply to ask himself how good a deal he has? If you're paying a stupid cheap rent, you're at risk, obviously.

Posted by Guest on Jan. 22, 2014 @ 10:29 am

They should actually be able to fairly easily locate their other holdings. There are web sites which map such ownership trees.

Posted by Eric Brooks on Jan. 22, 2014 @ 4:24 pm

it would not be very hard to achieve that.

Posted by Guest on Jan. 22, 2014 @ 5:10 pm

or is Ed Lee looking more porcine these days?

Posted by Greg on Jan. 20, 2014 @ 8:50 pm

Good one!

He's probably put on a few pounds, but the pic the BG used for this blog post is a photograph of a magazine cover and you can tell that they purposely took it at an awkward angle so as to distort Lee's face. The Bay Guardian often uses photographic tricks like this as a way to present their overall feelings about a subject. Remember the hero-shot of Ross Mirkarimi on the cover a few years back? Not that they're doing anything "wrong" - these are all opinion pieces and the art conveys the opinion expressed in the blog post.

Posted by Guest on Jan. 20, 2014 @ 9:53 pm

him look like Hitler. It's 6th grade stuff and they really should know better.

Posted by Guest on Jan. 21, 2014 @ 7:04 am

But Ed Lee has an uncanny resemblance to Sgt. Schultz.
http://www.westernfreepress.com/wp-content/uploads/2013/06/Sgt-Shultz-I-...

About the same level of competence too. Affordability crisis? What affordability crisis? I see NO-THING!

Posted by Greg on Jan. 21, 2014 @ 7:08 pm
Posted by marcos on Jan. 21, 2014 @ 7:47 pm

You claim Lee is not.

Posted by Guest on Jan. 22, 2014 @ 8:19 am

I seriously doubt the city can convince enough state legislators to "reform" the Ellis Act. A better strategy would be to incentivize property owners from exiting the rental business.

Posted by Guest on Jan. 20, 2014 @ 9:11 pm

problems of a few thousand people in San Francisco? And does anyone think that these problems are so profound that they require upending private property law for every single Californian?

Not. Gonna. Happen.

Posted by Guest on Jan. 20, 2014 @ 9:57 pm

all Ellis'ed buildings and run them as rentals so the existing tenants can stay?

Because the city knows those buildings are not viable, so why expect others to feel differently?

Posted by Guest on Jan. 21, 2014 @ 7:06 am

Also the city cannot operate the public housing they already own... that is a nightmare

Posted by Guest on Jan. 22, 2014 @ 12:48 pm

Hear, Hear! If the City buys the buildings then the tenants can stay in the rent-controlled buildings.

Posted by Guest on Feb. 12, 2014 @ 10:13 am

Or activists could buy them and set them up as co-ops or land trusts.

Except that they never do. They'd rather screw every last dollar from the landlords until they close up shop and convert the building to TICs.

Posted by Guest on Feb. 12, 2014 @ 10:43 am

Sorry, whining and crying about Econ 101 principles and using anecdotal approximations isn't "debunking". And I love the double-standard..."city provides services for trans folk queer folk people with AIDS." Yet "techies" are the bad guys. By EM's logic, the trans/queer/aids people are just as culpable as the google bus crowd for the housing "crisis". And certainly much moreso than Ellis act evictions.

Posted by Guest on Jan. 21, 2014 @ 12:06 am

Someone's gotta pay for those services for trans folk queer folk people with AIDS. The more ill, dependents, and homeless and transients we recruit and support, the more we need high earners to pay the bills. The progressives should be welcoming so called "techies" at the bridge with leis and hugs.

Posted by Guest on Jan. 21, 2014 @ 7:27 am

The other 49 States do not NEED an Ellis Act because very few of them allow cities to implement rent control.

Erin should stick to drawing pretty pictures and keep here mouth shut.

Posted by Guest on Jan. 21, 2014 @ 7:07 am

Erin is not the sharpest knife in the drawer.

Posted by Guest on Jan. 21, 2014 @ 7:32 am

It really doesn't matter whether a long-time landlord Ellis's a building or whether a speculator does. The important point is that the building is no longer viable as a rental and therefore someone is going to Ellis it.

In fact, a new owner typically has higher costs and so is more likely to Ellis. That is obvious.

Speculators provide liquidity to the market and enable landlords to exit the business without Ellis'ing themselves. I see no problem there.

Posted by Guest on Jan. 21, 2014 @ 7:34 am

again, is this he absolute best that the SFBG can do? You didnt debunk anything. The facts still stand.

Posted by Guest on Jan. 21, 2014 @ 7:36 am
Posted by Guest on Jan. 21, 2014 @ 7:40 am

When you say "native san franciscans are not being valued" - do you mean the Ohlone?

Posted by Guest on Jan. 21, 2014 @ 7:37 am

No - he means people who moved to San Francisco years ago, whose most significant achievement in life has been to hang onto a dingy rent-controlled apartment.

Posted by racer さ on Jan. 21, 2014 @ 7:58 am

Sounds like we should consider paying those who are "native San Franciscans" a salary, just for being who they are.

But what value do you put exactly, on people with a chip on their shoulder and a petulant, entitled "I was here first" attitude?

Posted by Guest on Jan. 21, 2014 @ 8:35 am

After all, they are probably going to inherit a million dollar home.

Rather, it is the boomers who came here in the 60's, 70's and 80's, because they didn't not want to grow up and thought they could get away with that here, who whine the most.

These people came here for social reasons, and typically don't have advanced skills or decent earnings power. They typically become artists or activists. and they endlessly whine that they should be subsidized to stay here rather than go back to whence they came, which they could probably afford.

I have zero sympathy for anyone who came to SF just because they thought it was "cool", who grimly clung to a rent-controlled hovel for decades, and is now being evicted. Get a job and pay your way.

Posted by Guest on Jan. 21, 2014 @ 9:00 am

Are often families who do the back breaking labor that this city stands on- careful of losing the forest to the trees.

Posted by Guest on Jan. 21, 2014 @ 3:46 pm

Families usually rent SFH's that are exempt from rent control anyway, or they move to the east bay where there is more space, and cheaper hosuing.

You do not have to live in SF to work here.

Posted by Guest on Jan. 21, 2014 @ 4:56 pm

are all over the Mission- appox 1/2 my very dense block- much of it pre 1979 and a significant owner occupied SFH presence- these are very much threatened by speculation.

Posted by Guest on Jan. 21, 2014 @ 5:35 pm

Parents prefer the East Bay once they have kids.

Posted by Guest on Jan. 21, 2014 @ 6:08 pm

parents- as if we are a homogeneous group?

Posted by Guest on Jan. 22, 2014 @ 10:43 am

statistic that SF has fewer kids per capita than any other major city.

In relative terms, the vast majority of SF tenants live in child-free households.

Posted by Guest on Jan. 22, 2014 @ 10:52 am

There are 2 aging boomers on my block trying to fight the Ellis Act. I admire their youthful spirit and respect their long stay in the city, but they cannot escape the reality of their situation. They both say they wish to live out the rest of their lives in their low cost apartments, but sadly, it is not their legal right.

The Ellis Act is a reminder to everyone that renting is temporary. It is not a viable long term strategy. Plan accordingly.

Posted by Guest on Jan. 21, 2014 @ 9:58 am

to keep a good deal. The problems start when that hope translates into expectation and a sense of entitlement.

Rent control is a lottery. For a landlord, if he gets turnover. and for a tenant, if he doesn't get moved on.

But one thing is clear - the longer a tenant has been in place, the cheaper his rent, and therefore the greater the probability that the owner will get tired of subsidizing the tenant's lifestyle.

Aging boomers like these really cannot complain. They've had a good deal for a long time but now it's time to pay the piper. A discount on the cost of living is a privilege and not a right.

Posted by Guest on Jan. 21, 2014 @ 10:14 am

San Francisco has Rent Control because of Prop 13, full stop. When Prop 13 passed in 1978, it meant that every property owner in California had their property taxes frozen at whatever the property was last assessed at.

That created a situation in San Francisco where the costs for landlords became fixed, but the costs of rent continued to go up. In order to rectify that situation, San Francisco passed Rent Control.

The Ellis Act was passed in 1985 because aging landlords wanted to get out of the landlord business and wanted a way to cash out on their buildings. What it's been turned in to is a way for corporations to take buildings, evict the renters, cash out on the properties and turn the new condos over to wealthy buyers, who in turn return them to the same rental market at a much higher price.

We do have an eviction crisis, but the crisis always starts in other ways first. Landlords are doing a lot of buyouts and pushing "At Fault" evictions based on circumstantial evidence to get tenants out so that they can return the unit to the market immediately. A student of mine, for example, asked his landlord if he could replace his subtenant with another one who was not on the lease. The landlord agreed over the phone, then when the new subtenant came in, the landlord evicted both of them because the subtenant was not on the lease. That's a legal, at-fault eviction. This doesn't even count buyouts or times landlords threaten owner move-in and the tenant leaves voluntarily.

The "crisis" hits when enough tenants willing to leave have done so and landlords run out of threats and barely-legal pressure to get rid of tenants.

Landlords do NOT want to use the Ellis Act or Owner Move-In to actually evict tenants. Ellis Act evictions mean taking the unit off of the market permanently - it allows landlords to cash out on their building, but it means giving up those sweet monthly rents for good. Likewise, an Owner Move-In eviction means taking the unit off of the market for 3 years while a family member resides in it. If your family member moves out before 3 years, the previous occupant gets to re-take the unit at the same rate they were paying when they were evicted.

So really what San Francisco Magazine is saying is that there is not an "Ellis Act Eviction Crisis." That is technically true. IMO, I believe most of the landlords who wanted to cash out via Ellis did so during the dot-com boom and there just aren't enough landlords during this dot-app boom that want to cash out.

But we are definitely in a gentrification and housing crisis. You can interpret statistics however you want, but San Francisco Magazine's entire premise is based around one particular method of evicting tenants which isn't currently in heavy use because, as I mentioned before, Ellis Act evictions are an end-game for a landlord.

Posted by bassguitarhero on Jan. 21, 2014 @ 12:53 pm

The entire state has Prop 13, but very few municipalities have Rent Control. San Francisco has rent control because (currently) the majority of the residents are renters.

Posted by Guest on Jan. 21, 2014 @ 1:17 pm

If you rent a home built after 1979, or a condo, or a SFH, or a live/work loft, you have no rent control protection. And rents are much higher for those precisely because the RC tenants hoard their units.

And renters arriving in SF have to pay far more in rent because of the low vacancy rate caused by rent control.

If renters really thought about the issue more, they'd realize that they are being screwed by rent control.

Posted by Guest on Jan. 21, 2014 @ 1:31 pm

Of course people who are new pay more in costs than people who have lived here for a while. That would be the case with or without rent control.

I have an amazing apartment with an awesome landlord, but it's an apartment that never went to the market because a friend of mine who lives in the unit above mine heard the tenant was moving out and put in the good word for me with the landlord.

If you're hitting up craigslist or don't know people, you're going to pay more. People who have rent controlled apartments have usually lived in the city for a very long time and are invested in their neighborhoods and know their neighbors. People who come to the city chasing after big bucks and take any apartment they can are also the first to leave when the bubble goes.

Posted by bassguitarhero on Jan. 21, 2014 @ 1:41 pm

Lucky you.

Too bad for the people that don't have the proper connections, because as you note, that's really the only way to get quality affordable housing.

Posted by Guest on Jan. 21, 2014 @ 1:56 pm

Rent Control isn't so much a perk to entice new people to an area as it is a reward for a tenant who's invested in a neighborhood. If you've lived in an area for a long time and you get to know the people there, you find good deals through friends and word-of-mouth. The way we did things before Craigslist.

In other words, you don't show up to a place and agree to live there for 20 years to get $700/month. You move to a place and live there for 20 years and your rent stays at $700/month.

Posted by bassguitarhero on Jan. 21, 2014 @ 2:25 pm

Until the day the property owner decides the $704.53/month rent doesn't work for them anymore. Hopefully the system of nepotism you support will still work for you, because most likely you will have to pay the much higher rent which results from a constrained supply.

Posted by Guest on Jan. 21, 2014 @ 4:37 pm
Posted by Guest on Jan. 21, 2014 @ 4:58 pm

What reward do they get for hoarding a dumpy rental for two decades?

Posted by Guest on Jan. 21, 2014 @ 4:58 pm

rents. How long a tenant had been there would be irrelevant.

This is what happens in most US cities. Rents go up with the market and tenants move to get a better deal. That turnover means that landlords woo tenants and try and offer the best deal, whereas in SF landlords just scheme to get rid of their tenants.

Rents are highest in places with rent control - the exact opposite of the intent

Posted by Guest on Jan. 21, 2014 @ 1:57 pm

Other US cities are not San Francisco. San Francisco is 7x7 and focusing on building density, not sprawl. Cities where landlords are wooing tenants are because there's a large percentage of empty housing they are trying to fill up - that does not exist in San Francisco.

However, Landlords of non-rent-controlled buildings are wooing like crazy to get renters. People just don't want to pay the outrageous rents that non-rent-controlled buildings are asking for.

If San Francisco didn't have Rent Control, landlords would evict almost every single tenant overnight to move in new renters with more money. There would be no economy nor room for anybody to get anything done because you'd have a landlord in your apartment every night showing the place to new potential tenants who are willing to pay more.

We have Rent Control because people who are invested in their neighborhood and community will stay throughout economic and demographic changes. People who are being pushed to the ends of their economic abilities will bail the instant they find something better. After the 2000 dot-com bubble burst, blight hit all the areas that had experienced the fastest rent-rises because people abandoned the neighborhood as soon as their high incomes were gone.

Rent Control allows the city to survive the end of a bubble. It's a much wiser investment for the long-term prosperity of a city over investing in every bubble that comes along.

Posted by bassguitarhero on Jan. 21, 2014 @ 2:22 pm

I'd have more respect for you if you were just honest and said you want a cheap deal and you don't care who else pays for it as long as it isnt you.

The rest is a crock, frankly.

Posted by Guest on Jan. 21, 2014 @ 2:24 pm

Congestion has nothing to do with maintaining a thriving metropolis. There are only a few world-class metropolis cities in America. They all have rent control.

There are plenty of large cities without rent control. But they are not world-class and probably never will be until they find a way to protect the multitude of diverse communities that live within them.

People who are interested in building the culture that makes a city interesting aren't going to live in places where they'll get bounced out the moment something they make something that increases the value of the property they reside on.

I have a great apartment deal, this isn't about me. This is about the importance of diversity in a city that's become known across the world as a city that values said diversity.

Posted by bassguitarhero on Jan. 21, 2014 @ 2:40 pm

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