This case concerns a challenge to a San Francisco ordinance requiring landlords to provide relocation assistance to their tenants when removing property from the rental market. Jackie Pieri, Lavinia Turner, and the Small Property Owners of San Francisco challenged the ordinance on the grounds that it violates the Ellis Act. The appellate court disagreed with Pieri, determining that the ordinance does not violate the Ellis Act. (Jackie Pieri et al. v. City and County of San Francisco, 2006 Daily Journal D.A.R. 3203, Cal.App. 1 Dist., Feb. 21, 2006))
Facts
Pieri and Turner own residential rental properties in the City and County of San Francisco (“City”) and seek to remove their properties from the rental market. The Small Property Owners of San Francisco is an organization that promotes home ownership in San Francisco. Pieri, Turner, and the Small Property Owners of San Francisco (collectively referred to as “Pieri”) claimed that the City’s relocation ordinance “facially violated the Ellis Act.” Pieri argued that the ordinance was not reasonably related to the tenants’ need for assistance under the Ellis Act and placed a prohibitive price on the right to take property off the rental market.
The trial court ruled in favor of Pieri. The City appealed.
Decision
The Ellis Act provides that no public entity “may compel the owner of any residential property to offer, or to continue to offer, accommodations in the property for rent or lease…” (Gov Code § 7060, subd. (a)). The relevant provisions of the City’s relocation ordinance requires landlords wishing to remove their property from the rental market to provide their tenants with monetary relocation assistance in the amount of $4,500 per tenant and a maximum of $13,500 per unit.
Pieri and the trial court believed that the Ellis Act allows public entities to require relocation assistance only to low income residents based on a decision in Channing Properties v. City of Berkeley (1992) 11 Cal.App.4th 88. The appellate court disagreed with the trial court and Pieri’s interpretation of the current Ellis Act because the Channing Properties decision was released prior to the amendments of the Ellis Act in 2003.
At the time of the Channing Properties decision, the Ellis Act (specifically Gov Code § 7060.1) set forth that the Act would not diminish or enhance the public entities’ power to “mitigate any adverse impact on persons displaced by reason of the withdrawal from rent or lease of any accommodations in any residential hotel” reserved for low income tenants. (Stats. 1985, ch. 1509, § 1, pp. 5560-5561.) The court in Channing Properties determined that a Berkeley law requiring landlords to pay their displaced tenants $4,500 per unit violated the Ellis Act because the Act’s provision at that time applied exclusively to low income tenants.
The 2003 amendments to the Act, however, eliminated the specific reference to low income tenants. The Act now provides that it does not diminish or enhance public entities’ power “to mitigate any adverse impact on persons displaced by reason of the withdrawal from rent or lease of any accommodations.” (Gov Code § 7060.1, subd. (c), emphasis added.) The appellate court here found the amendment to section 7060.1, subdivision (c) to be “clear and unambiguous, and eliminated the precise language relied on in Channing Properties. As aptly stated in People v. Olmstead (2000) 84 Cal.App.4th 270, 276: ‘In interpreting statutory language, a court must not “insert what has been omitted, or…omit what has been inserted.” (Code Civ. Proc. § 1858.)'”
Because the Ellis Act, as amended in 2003, does not prohibit public entities like the City from having relocation assistance ordinances applicable to any type of residential rental property, San Francisco’s relocation ordinance does not violate the current terms of the Ellis Act. Accordingly, the appellate court reversed the ruling of the trial court and ruled in favor of the City.
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