As Ellis Act reform bill faced death, where was Ron Conway?

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Where was Mayor Ed Lee's partner in the tech industry, Ron Conway, when the Ellis Act reform needed him?

One week and one day -- that's how long Sen. Mark Leno has to push his Ellis Act reform bill through two committees in order for it to go before to the assembly floor, making its prospects for passage this year look dim.

The push would have been easier if it hadn't lost yesterday's vote, 3-4, in the Assembly Committee on Housing and Community Development. Now the bill's passage is a herculean task that even Leno admits is a tough slog. 

"I'd say it's challenging," Leno told us yesterday. San Franciscans have been displaced by real estate speculators, a dozen or more of whom are regularly "flipping" homes for profit and using the Ellis Act to clean out longtime renters. If passed, the bill would restrict the use of the Ellis Act to those who've owned their homes for five years or longer, allowing property owners to eventually get out of the rental business, as supporters of the Ellis Act say it was intended for. 

"Bill Closing Ellis Act Loophole for San Francisco Fails in Assembly," was the headline of Leno's press release on yesterday's action. But "fails" seems to imply a strong effort that fell short of the mark, when the reality of was that some of the bill's highest profile and most powerful alleged supporters were missing in action: the tech industry and venture capitalist Ron Conway. 

When Leno's Senate Bill 1439 was announced in April, the "Godfather of Silicon Valley" Ron Conway stood before the microphone and cameras and announced the technology industry's intent to protect tenants from being displaced by real estate speculators. Conway is a wealthy "angel investor" who cashed in big on companies like Twitter. Later on, he became Twitter's greatest champion as he smooth-talked San Francisco government into providing big tax breaks to move Twitter into the mid-Market area.

In return, Mayor Ed Lee was counting on Conway and other tech titans to butress the other sectors of San Francisco, and to protect the people who were being evicted en masse. 

Conway pledged as much when his tech group, SF.citi, started a petition drive to support Ellis Act Reform.

Part of the tech backlash occurring in SF right now is due to evictions by real estate speculators. Please help stop evictions in SF by having your Company sign on to the below letter for Senator Leno.

The bill would prohibit rental property owners in San Francisco of less than five years from invoking the Ellis Act, threatening to invoke the Ellis Act, or prosecuting an unlawful detainer (eviction) action based on the Ellis Act. 

Real estate speculators are misusing California's Ellis Act to evict long-term rent paying tenants, who have done nothing wrong but are casualties of a loophole in the Act that must be closed to prevent further displacement. 

The Ellis Act was adopted to allow landlords to exit the rental business, not to give windfall profits to speculators willing to exploit the Act by entering the rental business just to exit it. These speculators are exploiting a loophole in the Act that allows them to buy a building and then immediately "exit the rental business" through mass evictions of low and middle-income tenants. The stories are heartbreaking, with families, seniors, and disabled San Franciscans losing their long-term homes.

We strongly support the passage of SB 1439. 

Ron Conway 

Chairman, sf.citi 

Writing pretty words and posing for pretty pictures seemed to be the extent of Conway's support. Meanwhile, the opposition built up its ranks.

At the committee hearing yesterday, lobbyists on behalf of the California Association of Realtors and very wealthy elderly folks told misleading tales of woe, crowding the room to convince the five California politicians to kill the Ellis Reform bill that would affect mostly just San Francisco.

"What we're trying to do is keep honest, law-abiding San Franciscans in their homes," Leno told the committee yesterday. But that wasn't the committee's concern. Ultimately, they were concerned about the bottom line. As Tim Redmond at 48hills reported yesterday, Committee Member Cheryl Brown, D-San Bernadino, said her brother told her the bill "is taking my property."

Those who defended the bill were scant: Jeff Buckley of the Mayor's Office, Dean Preston from Tenants Together, Sara Shortt of the Housing Rights Committee of San Francisco, and Committee Member Tom Ammiano, among others. 

Perhaps having a wealthy tech giant in the room, say, a Twitter representative or Conway himself, may have tipped the scales in Leno's favor. Conway's frequent lunch partner Mayor Ed Lee even sponsored the bill. But still, no tech workers, no tech CEOs, not even someone glued to their iPhone raised their voices to defend tenants at the committee. Not even Conway.

When we called and emailed Conway for a response, all we received was an automatic reply saying "I am currently traveling will read email sporadically during this time."

It's too bad he wasn't traveling to Sacramento. 

Comments

The way to stop Ellis evictions is to allow landlords a reasonable rate of return, so that they do not give up on the business out of despair.

The rest of the State clearly understand this.

The interests of tenants are best served by landlording being a vibrant and profitable business.

Leno got this wrong. It doesn't matter who owns a building but rather what the financials of that building are.

Posted by Guest on Jun. 19, 2014 @ 11:57 am

housing policy makes no sense.

Maybe SF needs to take a long, hard look at its current policies and, in particular, why property owners would rather commit hari kiri on their properties than subject themselves to a life sentence subsidizing losers, misfits and parasites.

Posted by Guest on Jun. 19, 2014 @ 12:06 pm

Right on............:)

Posted by Guest on Jun. 20, 2014 @ 2:06 pm

The two-faced politicians and misguided activists are promising to try again next year. Small property owners must plan accordingly, as any version of this law will severely impact the marketability of their property.

Posted by Guest on Jun. 19, 2014 @ 12:22 pm

condo limits last year did the exact same thing.

The only way to make tenants secure is to make landlords secure.

Posted by Guest on Jun. 19, 2014 @ 12:45 pm

Conway was laughing all of the way to the bank, having appeared to have supported the tenant agenda but not following through when there is no money in it for him.

This way, the hijackers appear to have supported tenants which insulates them from attack in the future.

Posted by marcos on Jun. 19, 2014 @ 12:24 pm

property owners to rent out their buildings?

Posted by Guest on Jun. 19, 2014 @ 12:42 pm

This all conspires to drive down property resale values so that the City can purchase them and relieve recalcitrant landlords of the burdens of property ownership. Hopefully it will drive the worst landlords to bankruptcy and homelessness.

Posted by marcos on Jun. 19, 2014 @ 12:49 pm

with setting public policy with the express purpose of confiscating private assets on the cheap?

Too bad about that pesky constitution and the takings clause huh?

Posted by Guest on Jun. 19, 2014 @ 1:01 pm

So it i okay when government policies raise the value of the asset you hold?

Posted by marcos on Jun. 19, 2014 @ 1:09 pm

would feel unlucky, but I'm not sure that makes you worthy of sympathy.

the best thing a government can do is butt out of markets as their track record of trying to manipulate them is miserable

Posted by Guest on Jun. 19, 2014 @ 1:17 pm

TBTF.

Posted by marcos on Jun. 19, 2014 @ 2:02 pm
Posted by Guest on Jun. 20, 2014 @ 6:36 am

Could not ask for a better example. The movement gets a tough loss in Sacramento.

The SFBG's reaction? Blame it one their favorite whipping boy, Ron Conway.

Don't tackle real issues about what should be done next. Put out the 1,000th hit piece on Ron Conway for not changing a vote in Sacramento.

These childishly obsessed 'journalists' are not helping with their sillyness.

Posted by Guest on Jun. 19, 2014 @ 12:33 pm

if Conway was just any other angel investor, i'd agree that focusing on him would be ill advised. But he has a complex relationship with the city. He funded a campaign against David Campos' for assembly northward of 50,000 dollars, funded Mayor Ed Lee and his various campaigns northwards of similar figures. The amount of money Conway is pouring into San Francisco politics makes him as a legitimate person of note to write about as any politician. Also, as a tech mogul with much clout and influence, he could rally all of the tech industry to whatever cause he wants (like he has with gun control). The tech industry argued that its presence would be beneficial for San Francisco, which in many ways it has been -- if you forget the massive displacement occuring as market forces and their presence combine to massively displace many long-time residents.

Conway is a linchpin in all of this, a central figure between tech and politics. That makes writing about him very necessary. 

Posted by Joe Fitzgerald on Jun. 19, 2014 @ 1:29 pm

personalities because if they focus on the policies, the people routinely reject them.

Painting Conway, Lee, Brown etc as villains feels a lot more comfortable to people like you than actually debating the policy issues, where you know you are on thin and unpopular ice.

Posted by Guest on Jun. 19, 2014 @ 1:40 pm

Maybe Conway was working. He has, after all, a real career and a busy job.

(It's so weird that he's become the SFBG's bogeyman.)

Posted by SFRealist on Jun. 20, 2014 @ 6:17 am

He could have sent a representative to speak. Or another member of the tech community. The point is not to say "screw the techies," and attack, the point is more to say "If you're going to back meaningful reform, you need to become better supporters politically, and learn how that's done on the state level." 

Less of a "screw you!" and more of a "please learn how to play the political game at the state level, if you're going to make big public promises to help enact reform."

I think that's pretty reasonable.  

Posted by Joe Fitzgerald on Jun. 20, 2014 @ 4:56 pm

Like taking away the private property of the Washington redskins, SF is taking away the right of private property land owners.

Posted by Guest on Jun. 19, 2014 @ 1:22 pm

The latter is.

If you examine the text of SF's rent ordinance, you will see a clear statement that a landlord is allowed a reasonable rate of return.

Posted by Guest on Jun. 19, 2014 @ 1:38 pm

You are correct that the landlord is allowed a rate of return, in the form of an allowed rent increase of 60% of the regional CPI each year.

However, judging by the number of landlords getting out of the business of providing rent-controlled apartments (e.g., via Ellis evictions or simply leaving the units vacant), the market is clearly defining this meager return as insufficient (i.e., specifically not "reasonable"). It's been under 2% for half a decade - barely better than a CD, while entailing a lot more risk.

If you want more supply, encourage the suppliers to get in, and stay in, the business. One way to do this is to allow the building of more housing to increase supply, but we know that takes a long time and the byzantine building process in the City assures that the cost per square foot will be well-inflated compared to other municipalities, so it's hard for anyone to build "affordable" housing that pencils out. A much faster mechanism to accomplish this would be to increase the allowed rent increase by a factor of 2x at least - a 5% annual rent increase is hardly outrageous, and everyone should agree it is far preferable to an eviction. That would convince more of the landlords to keep the existing rent-controlled units filled.

I really don't understand why folks are surprised by any of this. San Francisco housing is subject to the law of supply and demand just like everything else.

Posted by Guest on Jun. 23, 2014 @ 11:45 am

allowed 7% annual increases for many years (inflation was higher then, however) and then 4% for a number of years beyond that.

4% rent increases allow for a doubling of rent ever 18 years. Hardly excessive but we never had these Ellis evictions while that was possible.

But of course, and as always, the tenant lobby got greedy and drive allowable rent increases virtually to zero. And then, surprise surprise, landlords started exitting the business and have done ever since.

The city is now planning a whole bunch of new housing laws but, if past behavior is any guide, they will simply achieve what all the existing laws achieved i.e. a constriction of supply and ever higher housing costs.

They never learn, and all reasonable person can do is profit from it.

Posted by Guest on Jun. 23, 2014 @ 11:57 am

"subsidizing losers, misfits and parasites..."

ipso facto we'd then expect you not to move here or take residence in the CCSF, for it would only add to the concentration of the aforementioned ["..." <--- your words, not mine].

I am glad we have achieved clarity on this matter.

Posted by Guestagainststatecapitalism on Jun. 19, 2014 @ 4:54 pm
Posted by Guest on Jun. 20, 2014 @ 6:37 am

to appear at hearings in Sacramento like Non Profit Inc can order its clients to do the same. If anything illustrates the gulf in how little the Guardian's writers understand about the tech industry it's that.

Posted by Guest on Jun. 20, 2014 @ 1:31 pm

"usual suspect" activists is a legitimate strategy for coercing politicians. But investing funds in what your conscience tells you is right is not.

Posted by Guest on Jun. 20, 2014 @ 1:42 pm

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