San Francisco Buyout Agreement Ordinance Challenged by City Housing Organizations
Via Bay City News
Individuals and housing industry organizations that challenge the
constitutionality of a Buyout Agreement Ordinance which was passed by San Francisco’s Board of Supervisors and set to take effect last Saturday, filed a lawsuit against the City and County of San Francisco on Friday.
The ordinance claims that as San Francisco finds itself in a housing crisis, with disparity between rent-controlled and market rate rent units continuing to grow, the ordinance will regulate landlords who want to vacate individuals and families in rent-controlled units in order to sell their property, knowing that an unoccupied building can likely command significantly higher sale price than an occupied one.
According to the San Francisco Rent Board, the Buyout Agreement Ordinance regulates agreements between landlords and tenants under which landlords pay tenants money or other consideration to vacate rent-controlled housing units.
The ordinance, sponsored by Supervisors John Avalos, David Campos, Jane Kim and Eric Mar, came about in response to anecdotal evidence that shows buyout negotiations occurring when “landlords sometimes employ high-pressure tactics and intimidation to induce tenants to sign the agreements.”
The law is being challenged by the San Francisco Apartment
Association, the Small Property Owners of San Francisco Institute, the San Francisco Association of Realtors, the Coalition for Better Housing and Norm Larson, a small property owner in San Francisco, according to the lawsuit, according to the San Francisco Apartment Association.
The plaintiffs are seeking declaratory and injunctive relief against the Buyout Agreement Ordinance.
Walt Baczkowski, chief executive officer of the San Francisco Association of Realtors said in a statement released today that “attempting to regulate an agreement between two private parties, the legislation likely violates the First Amendment right to free speech.”
Baczkowski said the Buyout Agreement Ordinance “seeks to punish property owners for exercising a right that every individual has: to enter into a mutually acceptable contract with another person.”He said he believes the ordinance gives rights to San Francisco tenants that it denies to San Francisco property owners.
According to the ordinance, buyout agreements that come about when a tenant is convinced to vacate a unit, rather than receive an eviction notice, allows landlords to avoid the city’s restrictions on condominium conversions and restrictions on renovations, mergers or demolitions.
Noni Richen, the president of the Small Property Owners of San Francisco Institute said in a statement today that he feels, “The ordinance is so onerous and riddled with procedural requirements that it sets up underrepresented, monolingual and immigrant property owners for procedural noncompliance, and will undoubtedly increase litigation between property owners and tenants.”
Brook Turner, the executive director of the Coalition for Better Housing, said in a statement today that he believes the ordinance would remove benefits of buyouts, such as helping tenants who would otherwise not be able to afford putting a down payment toward the purchase of a new home.