- Associated Press - Wednesday, May 28, 2014

SACRAMENTO, Calif. (AP) - California lawmakers on Wednesday rejected a proposal promoted by San Francisco Mayor Ed Lee, who sought to rein in rapidly escalating real estate and rental housing prices that have stirred tensions over forced evictions.

SB1439 would have modified the state “Ellis Act,” a law that allows landlords to evict all tenants in a building when they want to sell a property and get out of the rental property business. It failed to gain majority support.

The bill’s author, Sen. Mark Leno, D-San Francisco, said real estate speculators that are flipping properties are abusing the law and driving up rents in the city. His bill, which applies only to San Francisco, would have allowed the city to require a landlord to own a property for five years before a mass eviction.

“The Ellis Act was not created for this purpose. It was to give a statutory right to landlords. It’s being abused,” Leno said.

Housing advocates complain that longtime residents are being forced from their homes by rapidly rising rents brought on by an influx of technology companies whose employees are highly paid. Shuttles that transport thousands of workers to Silicon Valley each day have prompted protests as a symbol of economic inequality.

More than 75 businesses, including high-profile companies such as Twitter and Expedia and the Bay Area Council support the legislation, but the powerful California Association of Realtors and California Chamber of Commerce are opposed. The chamber wrote in an opposition letter that there is no other industry “where a local government can force a small business owner to stay in business against his or her will, even when they are losing money.”

Some moderate Democrats who receive campaign contributions from a political action committee tied to the realtors’ association were among those who opposed the bill.

Sen. Norma Torres, D-Pomona, said San Francisco failed to build sufficient affordable housing, and “asking private owners to foot the bill for something that they have neglected is inappropriate.”

Republican lawmakers also were opposed.

Sen. Mike Morrell, R-Rancho Cucamonga, called the legislation “a slide towards socialism.” He said San Francisco should loosen regulations and lower building permit fees to solve its housing problem.

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