Six rent-controlled households at 2055 Powell Street filed a cross-complaint in San Francisco court this week accusing the new owners clearing their North Beach building under the Ellis Act of housing discrimination — alleging that only the building's white tenants were offered the chance to buy in.

The fight over the North Beach building has quietly become a courtroom test of how far a new ownership group can go in emptying a rent-controlled property — and who gets a seat at the ownership table. The owners went to court first, suing their own tenants in April, before anyone was required to move, to narrow the defenses those tenants could later raise. This week the tenants pushed back with a discrimination claim that reframes a familiar Ellis Act displacement as something the law may not permit at all: a selective offer, allegedly drawn along racial lines.

Seven new owners bought 2055 Powell Street in February 2025 through a tenancy in common, and last fall invoked the Ellis Act — the state law that lets landlords evict tenants if they pull a building off the rental market entirely. Under the San Francisco Tenants Union's account of the process (external source, opens in a new tab), a building is considered legally withdrawn 120 days after the owners file a Notice of Intent with the Rent Board, though senior and disabled tenants are entitled to a one-year notice instead. Reporting by Hoodline placed the building's six eviction notices on the Rent Board's docket under case numbers M252015 through M252020, dated November 3, 2025.

The households inside are the kind rent control was written for. As NBC Bay Area (external source, opens in a new tab) reported, tenant Yok Lin Chui arrived from Hong Kong in 1971 and has spent more than five decades on Powell Street; through a translator, she said that at her age she has nowhere to go and does not even know how to hail a taxi. Meagan Cunningham, a voice-over artist, moved in as a child in 1987 and shares her unit with her adult son, Max. Bernard Dethiers, past 30 years in the building and president of the San Francisco Taxi Coalition, told the station the Ellis Act is legal but, in his view, immoral.

What sets this case apart from the usual Ellis Act clearance is the litigation. The owners sued their tenants in April, ahead of any move-out deadline, asking a court to resolve disputes over the eviction and to limit legal defenses the tenants might otherwise raise. The tenants — represented by the Tenderloin Housing Clinic (external source, opens in a new tab), a nonprofit that defends low-income renters facing displacement — answered this week with a cross-complaint accusing the owners of housing discrimination and other civil violations. According to the filing, only the building's caucasian tenants were given offers to buy into the ownership group.

Steve Collier, the clinic's managing attorney, told NBC Bay Area that none of the building's Asian families were given the chance to buy in, and that Cunningham's household — of mixed heritage — was passed over despite asking. Discrimination like that, whether by design or by effect, is unlawful, he argued. Cunningham told NBC Bay Area that two of the new owners had themselves rented in the building before buying in, which is why she described the episode as neighbors evicting neighbors.

The owners, in a statement issued through their attorney, cast themselves as longtime North Beach renters trying to become homeowners amid a chronic housing shortage. They rejected the speculator label, saying they are not developers betting on the artificial-intelligence bubble but ordinary families who want to bring up their kids in a city they love. They said San Francisco offers help to displaced tenants and urged the renters to seek it. Asked by NBC Bay Area to respond to the discrimination allegations, the owners did not address them.

The stakes are the distance between what these tenants pay and what the city now charges. Collier told NBC Bay Area that one client's rent is about $600 a month, and that no unit in the building tops $1,300; a median one-bedroom in San Francisco now runs past $4,000, according to Zumper. Ellis Act relocation payments, he said, do not bridge that gap. A discrimination finding would not on its own undo an Ellis withdrawal — the Act exists precisely to let owners leave the rental business — but it could open the owners to civil liability and complicate the clean exit their April lawsuit was built to secure. For now, six households ordered gone by November are instead fighting it out in court.