The legislature passed the Ellis Act in response to the California Supreme Court's decision in Nash v. City of Santa Monica[2] (1984) 37 Cal.
Cities may require the payment of relocation assistance "to mitigate any adverse impact on persons displaced" or an extension of the termination date of tenancies from the standard 120 days to a full year from the commencement of the withdrawal process if tenants claim to be at least 62 or disabled.
[9] In 2014 and 2015, San Francisco Supervisor David Campos authored two pieces of legislation to attempt to increase the relocation payments to provide for two years of market rate subsidy to displaced tenants.
[10] The first attempt in 2014 with unlimited total payment amount and no requirement that the money be spent on relocation was declared an unconstitutional violation of property rights by a federal court.
Some cities, such as San Francisco, impose strict restrictions on withdrawn property (such as preventing condominium conversion or the adding of Accessory Dwelling Units[22]: 1 ).
However, a 2016 decision by the First District Court of Appeals upheld a challenge against San Francisco's ordinance preventing Ellis Act "mergers" of units and found that state law occupies the field of substantive eviction controls "for owners attempting to withdraw units from the residential rental market" and suggested that the Ellis Act may impose a limit on post-withdrawal "penalties" that seek to discourage the use of that right under state law.
In 2014, State Senator Mark Leno introduced bill SB 1439, legislation that would prevent landlords from being able to use the Ellis Act for five years after buying a property.