Appeals Court Upholds San Francisco Law, Protecting Tenants from ‘eviction by another name.’

Published 03/22/2022

Photo by Saúl Bucio on Unsplash

A state appeals court upheld a San Francisco tenant-protection law that bars property owners from bypassing city limits on evictions to force tenants to leave with hefty rent increases.

The case tested the limits of the Costa-Hawkins Act, a California law supported by the real estate industry, which banned local rent controls on all single-family homes and apartments built after February 1995 and on condominiums.

That did not limit a city or county’s right to restrict the eviction of tenants, but the issue before the court was whether San Francisco’s eviction rules were a form of rent control.

The city’s ordinance passed in January 2019 barred property owners from increasing rents by such a large amount that they did not intend to offset the owner’s costs but instead; to displace the tenant. Either voluntarily or by a suit for non-payment rent.

In deciding whether the rent rose in poor faith, city officials had to consider whether the amount was substantially higher than market rates and whether the rent increased within six months of the attempt to evict the tenant.

A lawsuit filed a month later by the San Francisco Apartment Association (and other groups) claimed that San Francisco was effectively controlling rents, in violation of Costa-Hawkins. Superior Court Judge Charles Haynes disagreed in 2020, and the First District Court of Appeals in San Francisco upheld his decision on Monday.

“Costa-Hawkins does not protect a landlord’s right to use rent increases to avoid legally imposed local eviction restrictions,” Justice Stuart Pollack said. in a 3-0 decision, He said the ordinance does not intend to prohibit legitimate rent increases but to “prevent landlords from trying to evade local eviction rules by imposing artificially high rents in bad faith.”

City Attorney David Chiu praised the decision. “When a tenant’s rent is doubled or tripled, it is simply eviction by another name,” he said in a statement. “We cannot allow unscrupulous landlords to circumvent our local laws and illegally evict tenants.”

Supervisor Hilary Ronen, the sponsor of the 2019 ordinance, also welcomed the decision. “Raising rent to force a tenant to move is clearly harassment, and we in San Francisco are not going to tolerate that,” she said.

Owners’ associations saw it differently:

The San Francisco ordinance “undermines Costa-Hawkins and puts landlords at the mercy of local regulation with regard to setting rents in an area where the Legislature explicitly seeks to withhold local regulation,” said San Francisco Apartment Association attorney, Christopher Skinnell. Said, who can seek review in the Supreme Court of the state.

The local law is “over-protective,” said Curtis Dowling, attorney for the California Apartment Association. Doubling or tripling a tenant’s rent would be too far-fetched to secure an eviction, he said, but under the words of San Francisco law, “any increase in these units could be drawn into a litigation trap.”

Bob Agelko, a staff writer for the San Francisco Chronicle, wrote this article. E-mail: begelko@sfchronicle.com Twitter: @BobEgelko