By Jennifer Baires
SAN FRANCISCO (Reuters) - A San Francisco law requiring landlords to pay large sums of money to tenants before removing a property from the rental market was challenged in federal court on Thursday amid rising tensions between renters and landlords in the expensive city.
The lawsuit filed by Pacific Legal Foundation on behalf of Daniel and Maria Levin, a married couple who own a two-unit house in San Francisco, argues that the new ordinance is unconstitutional because it violates the homeowners’ privacy and property rights.
“The Levins just don’t want to be landlords anymore,” J. David Breemer, lead attorney on the case, said. “Their particular situation is patently unconstitutional.”
Under the recently passed ordinance, which significantly increased the amount of money landlords must pay to tenants if they want to get out of the rental market, the Levins would have to pay $117,000 to move into their duplex, Breemer said.
Under California’s Ellis Act, landlords in the state wanting to get out of the rental business can displace renters, but the law leaves it to local municipalities to set further guidelines around notification and relocation payments.
The San Francisco ordinance raises the amount landlords must pay from around $5,200 to possibly hundreds of thousands of dollars, according to the groups suing. The new payment amount is the difference between a tenant’s current rent, kept low by rent control, the market rate cost for a similar apartment for two years.
Supporters of the ordinance say that it disincentivizes landlords from selling out to developers who turn around and rent out the same units at higher rates, or combine units to create luxury rentals. Over the last few years, the San Francisco Chronicle reports, Ellis Act evictions in the city have increased by 170 percent.
In addition to the Levins, the suit was also filed on behalf of the San Francisco Apartment Association, Parklane Associates, LP and the Coalition for Better Housing.
(Editing by Sharon Bernstein and Lisa Shumaker)