Responding to the growing scarcity and affordability of rental housing in San Francisco, the City passed an ordinance in 2013 that imposed a ten-year waiting period on landlords who wished to merge certain residential units in a property. Specifically, if a unit was vacated due to an "Ellis Act eviction," the Planning Commission could not approve a merger with another unit until ten years had passed. (San Francisco Planning Code, article 3, section 317(e)(4).)
Landlords sued the City, arguing that the state's Ellis Act gave landlords an absolute right to withdraw units from the rental market, and that the state law allowed for no local variations on that right. Accordingly, they argued that the San Francisco ordinance, which penalized a landlord's exercise of his Ellis Act rights, was "pre-empted" by the state law. In other words, by enacting the Ellis Act, the state intended to have the final say in the matter, and would brook no local interference.
The Court of Appeal agreed. It struck the ordinance insofar as it applies to mergers of units following Ellis Act evictions. (San Francisco Apartment Association, et al, v. City and County of San Francisco, 207 Cal.Rptr.3d 684.)