Authors: Caitlin Connell, Jessica Wilson
As discussed in our last update on the November 2022 Proposition M, Empty Homes Tax Ordinance (the “Empty Homes Tax”), the San Francisco Apartment Association, the Small Property Owners of San Francisco Institute, the San Francisco Association of Realtors, and four individual landlords (“Challengers”) filed a lawsuit in San Francisco Superior Court challenging the constitutionality of the Empty Homes Tax. On October 31, 2024, the Superior Court ruled in favor of the Challengers’ Motion for Summary Judgment, finding that the Empty Homes Tax is unenforceable. Accordingly, the Empty Homes Tax is not currently effective, although the City of San Francisco may appeal the decision.
In May of 2024, the Challengers filed a Motion for Summary Judgment, seeking summary judgment, and asking that the Court enter a permanent injunction prohibiting the enforcement of the Empty Homes Tax. The Challengers argued that the Empty Homes Tax violates the Takings and Due Process Clauses of the Constitution, reasoning that a property owner’s right to keep their property vacant—to exclude others—is an essential element of the property rights protected by the Takings Clause. The Challengers also argued that the Empty Homes Tax violates the Ellis Act, which provides that the government may not compel the owner of any residential real property to offer or continue to offer accommodations in the property for rent or lease, with certain exceptions. The Court’s ruling provided that the Challengers shifted their burden as to all causes of action in their lawsuit, and that the City of San Francisco failed to create any triable issues of fact with competent admissible evidence. The Court tasked the Challengers with preparing an order, which order has not yet been published in the Court’s register of actions.
We will continue to provide further updates on the Empty Homes Tax, the status of the Court’s decision, and a published Court order as such updates become available.
