The California legislature recently overturned a court ruling that relied on the California Environmental Quality Act (CEQA) to restrict admissions to UC Berkeley. Lawmakers acted urgently to protect the original intent of the CEQA. Now is the time for the legislature to similarly restore the original intent of the Ellis Act. Like CEQA, the Ellis Act was so radically changed by court rulings that it is unrecognizable from the bill that was passed.
Inventing a new Ellis Act
The Ellis Act that passed a Democratic-controlled legislature in 1985 was designed to allow landlords unhappy with rent controls to “get out of the rental housing business” by keeping their building vacant. Sponsor Jim Ellis, a Republican from San Diego, said he didn’t think the law would get much use because few landlords wanted to keep vacant buildings.
Jim Ellis’ prediction came true: few, if any, owners saw any benefit in owning a vacant building. The Ellis Act was rarely used for over a decade.
But that was before Republican judges invented a new Ellis law. These anti-rent control judges couldn’t completely overturn rent control and completely vindicate the eviction laws (they were already upheld by the state Supreme Court), but they could rewrite the Ellis Act to weaken the power. tenants and circumvent rental housing protections.
Suddenly, the courts said the Ellis Act no longer required buildings to be “empty of human habitation,” as an early appeals court ruling ruled. Instead, the Ellised buildings were simply to be kept vacant of tenants.
The courts have effectively ruled that the legislature passed the Ellis Act to help eliminate rent-controlled housing. And also to induce speculators to buy buildings in order to evict long-term tenants protected by local rent control.
Everyone knew that this interpretation of the Ellis Act was nonsense. But the courts didn’t care. They ignored the lack of legislative history supporting their vast expansion of the Ellis Act.
Keep in mind that it took ten years after the Ellis Act for landlords to adopt Costa-Hawkins, which eliminated rent control on vacant apartments. Efforts to weaken tenant protections in 1985, when Ellis was adopted, did not stand a chance.
Yet the courts ruled that the legislature did in fact pass a law in 1985 to allow speculators to evict rent-controlled tenants and convert or demolish rental units. The courts knew that such a bill would not have made it anywhere in the Democratic-controlled legislature. The judges used their own political agendas to strike down the original Ellis Act and invent a new one.
Tragically (and I detail some of the most publicized abuses of the Ellis Act in, Off-price generation), this reimagined Ellis Act is still allowed to eliminate affordable rental housing. And to evict vulnerable tenants.
That’s why it’s so important that the Legislature help restore the original intent of the Ellis Act by passing AB 2050 this year.
AB 2050 stops evictions of speculators under the Ellis Act. A similar bill passed the Senate in 2014 but failed in the Assembly Housing Committee. It also failed that committee in 2015. AB 2050’s predecessor, AB 854, reached the floor of the Assembly in January but failed. It has been amended to address member concerns that the previous bill inadvertently covered small Mom and Pop owners.
Why was a bogus version of the Ellis Law allowed to eliminate over 27,000 rent-controlled housing units in Los Angeles alone? And wreak havoc on the lives of vulnerable tenants across the state?
Because real estate interests want it that way. Their lobbying led lawmakers to preserve a law they would never have passed and whose values clash with the Democratic Party (the state party overwhelmingly endorsed AB 854).
While the legislature quickly revised the CEQA to protect the UC Berkeley admissions process, CEQA reform was limited to specific facts. Lawmakers like State Senator Scott Wiener have pointed to the need for broader reform that we hope to see in 2023.
Just as the Ellis Act went from a law allowing vacant buildings to a law used for speculator evictions and eliminating affordable rental housing, CEQA is now helping to block changes that help protect the environment. Restoring the original intent of the CEQA was just as difficult as restoring the intent of the Ellis Act.
The growing anti-speculative mood in the Legislature is giving Ellis Law reform (AB 2050) a fighting chance this year. While the CEQA reform divides the main Democratic constituencies, the Ellis reform is supported by the NIMBYs and the YIMBYs. It has union support and no union opposition.
Will the influence of Big Real Estate once again prevent the legislature from helping restore the original intent of the Ellis Act?
We will know soon. The Assembly vote on AB 2050 is due to take place by the end of May.