Several San Francisco property owners have filed a lawsuit challenging the legality of the recently passed Proposition M, which requires landlords to pay a tax on units left vacant for more than 182 days in a single year.
The San Francisco Apartment Association, San Francisco Association of Realtors and others filed the lawsuit Feb. 9 in San Francisco Superior Court, alleging that the measure approved by city voters in November violates property owners’ rights under the takings clause of the U.S. Constitution and California’s Ellis Act.
Owners of rental units could be forced to rent apartments at a financial loss under the provisions of the proposition, according to the lawsuit. The measure would assess landlords between $2,500 and $5,000 per vacant unit starting in 2024 in a bid to generate more money for affordable housing in the city and expand housing unit availability.
Chris Skinnell
| Nielsen Merksamer Parrinello Gross & Leoni
“... Recent changes in the real estate market (the COVID-19 pandemic’s effect on jobs in San Francisco, inflation, etc.) have made it considerably more difficult to rent out units in some parts of the city, and drastically slashing the rents in an attempt to fill such units often would mean – given San Francisco’s strict rent control laws – accepting submarket rents indefinitely,” the complaint says..
Attorney Chris Skinnell, who represents the plaintiffs in the case, said the government simply cannot force a landlord to house someone on a property if the landlord prefers to keep the unit vacant.
“What this tax is designed to do by the admission of the proponents of the measure itself is to force landlords to rent their property when they don't want to,” Skinnell told the Northern California Record.
The complaint also alleges that Proposition M violates privacy rights under the U.S. Constitution.
“It violates the constitutional right to privacy as applied to property owners who reside on the property subject to taxation and do not wish to share their property with others,” the lawsuit states.