SAN FRANCISCO (CN) - San Francisco is trying to use landlords to fix its affordable housing problem, the lead attorney challenging the city's rent ordinance as unconstitutional said outside the city's Federal Courthouse on Monday.
"It's everyone's job to fund the affordable housing programs in this city and not foist it on the backs of property owners," J. David Breemer said.
His clients are Daniel and Maria Levin, a couple who, under a law allowing them to get out of the rental business, must pay their tenant $117,000 to move out of the two-unit building they bought in 2008.
The Levins say they never wanted to be landlords and immediately informed the woman, who had been living in the first-floor unit since 1988, that they planned to remodel the building and use both units themselves.
The Levins moved into the one-bedroom top floor unit, and after the tenant protested their attempts to remodel, the Levins decided to take the ground-floor apartment off the rental market, through the 1985 Ellis Act, which allows landlords to evict tenants if the landlord wants to get out of the rental business.
The Levins claim they paid the tenant, Thina Holman, $8,000 under old tenant payment laws.
But under a San Francisco ordinance that took effect in June, now they must pay her the difference between her old rent of $2,479 a month and the price of comparable housing in the city for two years.
Co-plaintiffs in Levin's case include Park Lane Associates, which owns a 33-unit building, the San Francisco Apartment Association, and the Coalition for Better Housing.
Park Lane claims it will have to pay the tenants of 15 of its units more than $1.4 million.
As the trial began Monday, U.S. District Judge Charles Breyer said he wanted additional briefing from the city on whether its goal in enacting the ordinance of helping renters find housing in an increasingly expensive market justifies the means in requiring landlords to pay tenants massive amounts to vacate their property.
Breyer said the Nollan-Dolan test is central to the case, and that the city has not addressed its merits, calling the test, "a serious challenge to the ordinance."
Under Nollan-Dolan, to survive a challenge under the Takings Clause, the ordinance must have an essential nexus to a legitimate public interest and be roughly proportionate to its impact.
Breemer said: "The specific legal question has to deal with this means-end question. Assuming it advances a legitimate purpose, are the means appropriately tailored to the end?"
Arguing before Judge Breyer on Monday, City Attorney Christine Van Aken said the ordinance is helping to mitigate the loss of rent control on tenants, a direct impact of the Ellis Act.
"When a landlord evicts a tenant, he or she is removing from that tenant the protection of rent control. The landlord is exposing those tenants to market rates. San Francisco has said to landlord you must at least mitigate two years of that impact," Van Aken said.
Breemer countered: "The only direct impact is the tenant must find another place to live."
Breyer said: "They're saying more than that; they're saying the tenants are losing rent control. The tenant loses the protection of rent control."
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