San Francisco is witnessing a growing wave of tenant buyout negotiations as landlords seek to reclaim or repurpose rent-controlled apartments amid rising housing demand driven in part by the city’s expanding technology sector. Several long-term residents face mounting pressure to leave their affordable units, with some landlords offering buyout sums that tenants consider insufficient to secure comparable housing elsewhere in the city.

Bernard Dethiers, 74, has lived for more than four decades in a rent-controlled two-bedroom apartment in North Beach, paying about $1,100 monthly—far below the city’s median asking rent of $4,395 reported in August. Following a change in ownership last year, Dethiers was offered $40,000 to vacate within three months. He countered with a demand of $600,000, a figure reflecting what he estimates as a potential rent difference over 20 years. The offer was rejected, and now the landlord is pursuing eviction under the Ellis Act, a California law that permits landlords to remove all rental units from the market. The building’s new owners intend to occupy the units with family members, a legal justification under the act. Dethiers, along with five other tenants, is contesting the eviction in court.

Relocation payments mandated by San Francisco law provide tenants who face no-fault evictions with monetary assistance, but many advocates and tenants argue these sums fail to compensate for the high cost of moving and securing new housing suitable for their needs. Dethiers and his son, who is in high school, would be eligible for approximately $29,000 in relocation funds. Because Dethiers is over 62 and has resided in the unit for more than a year, he would receive a one-year period to relocate instead of the typical 120 days. Still, he expressed uncertainty about finding affordable housing in the city given current market conditions.

Legal experts observe that landlords often seek buyouts or evictions to tap into inflated market rents or to sell buildings at higher values once vacant. Property owners may also reclaim units to house themselves or family members, especially following the recent surge in demand spurred by the artificial intelligence industry and associated economic growth. One attorney representing landlords noted parallels to previous tech-driven booms in San Francisco, citing robust housing demand amid limited supply.

While rent control laws provide tenants with some protection—such as capped annual rent increases and a right to refuse buyout proposals—landlords may still proceed with evictions under the Ellis Act or for owner move-ins, provided they comply with legal requirements, including occupying the unit as a primary residence for a minimum of three years.

Craig Lipton, a longtime local real estate professional, negotiated buyouts with tenants in a luxury Nob Hill building he owns. After initial offers of $5,000 per tenant were declined, negotiations escalated, culminating in a $100,000 buyout agreement with five tenants. Lipton attributed his actions to market dynamics and the difficulty of selling a unit encumbered by rent control, acknowledging the emotional weight of essentially paying to regain possession of his property.

Conversely, tenants such as John Alioto, who has lived in a rent-controlled Nob Hill apartment for more than 20 years, have declined buyout offers totaling over $100,000 collectively. Alioto and his housemates, paying about $2,600 monthly for a four-bedroom unit, expressed reluctance to leave their homes, emphasizing the intangible value of their established community ties and stability. Alioto, a Hyatt Regency doorman, said no amount of money could replace the sense of home and security in their current residence.

Other tenants, including Mike Dineen, a local worker and longtime resident, also turned down buyout offers they considered insufficient. Dineen described the anxiety of uncertain housing prospects in a market where affordable options are scarce and the personal significance of his apartment, which has served as a place where he cared for his late mother and built community connections over decades.

As demand for San Francisco housing remains high and prices continue to escalate, industry observers anticipate an increase in buyout offers and eviction proceedings under existing legal frameworks. The tensions underscore the challenges tenants face balancing the protections of rent control with the realities of a competitive, rapidly shifting housing market.