After inewsource report, San Diego official says any unlawful rent hikes should be returned

One of the most powerful elected officials in the region wants the San Diego Housing Commission to claw back unlawful rent increases that may have been paid to private landlords.

On Tuesday, San Diego City Council President Sean Elo-Rivera told the agency’s interim executive director, Jeff Davis, that he wants officials to do everything possible to ensure they recover money that should not have been paid to landlords — either by the Housing Commission or tenants. 

The request comes less than a week after an inewsource investigation revealed the Housing Commission has been approving rent hikes for low-income tenants in the federal Section 8 housing program without checking to see if they comply with the California Tenant Protection Act, which caps rent increases for many properties at 10% in San Diego. 

The state’s attorney general said in June the law is clear: Section 8 voucher holders are protected from unlawful increases.

A spokesperson for the Housing Commission told inewsource last week, when asked about our findings, that officials have been working on a new policy that complies with state law after seeking guidance from federal housing officials and hearing nothing.

Davis spoke publicly on the matter for the first time Tuesday, explaining to elected officials that the Housing Commission didn’t think the state’s law covered federal voucher holders. He said other housing agencies across the state have been operating the same way.  

Legal disagreements aside, a spokesperson said the agency could start denying requests to increase rents more than 10% early next year, as long as the feds approve. 

In a statement to inewsource, Elo-Rivera pointed out that vouchers help San Diegans pay for housing they otherwise would not be able to afford in this “far-too-expensive city.”

“That makes each dollar disbursed incredibly important — far too important to allow landlords to charge more for rent than what is legally allowable,” Elo-Rivera said.

“I will be seeking guidance for the Housing Authority to understand what options the San Diego Housing Commission may utilize to recoup any rent that was unlawfully charged to housing voucher holders.”

inewsource followed up with the Housing Commission about Elo-Rivera’s request.

“As the Council President stated in his remarks, more conversations need to occur regarding this subject,” said spokesperson Scott Marshall, adding that officials look forward to working with the City Council to implement the new local policy.

‘A lack of clarity’

The Housing Commission doles out about $300 million in federal vouchers every year to help low-income San Diegans afford rents on the private market. For perspective, an individual who lives alone and earns $77,200 or less per year is considered low-income in San Diego. Qualifying residents face up to 15 years on a waitlist. 

Before property owners can raise the rent on tenants with a voucher, the Housing Commission must first approve — and it does so nine times out of 10. The agency receives thousands of requests every year. A lawsuit filed this month aims to force the Housing Commission to comply with state law and recover all public funds sent to private landlords to pay for unlawful increases.

The issue came to a head Tuesday afternoon during a special meeting of the Housing Authority, which is made up of city councilmembers who provide oversight and set policy for the Housing Commission. Referencing inewsource’s investigation, Elo-Rivera asked Davis to explain the approval of rent increases that go beyond the state’s rent cap.

Davis, who stepped into the agency’s interim role early last year, said there have been differing opinions and a lot of ambiguity about how the state’s Tenant Protection Act applies to the federal housing program. He pushed back on the lawsuit and inewsource’s reporting.

“I certainly understand the concern, frustration from all of you, from members of the public for what they read in the article and maybe what they’ve seen in the lawsuit,” Davis said. “However, neither accurately reflect the legality of rent increases in the federal Housing Choice Voucher program.”

Davis pointed to legal opinions that came out when the Tenant Protection Act passed in 2019 and took effect in 2020 — one of them coming from attorneys for the California Legislature who said Section 8 vouchers are not covered. He said state law “clearly spelled out that it did not apply to the voucher program.” 

But California Attorney General Rob Bonta says that’s not true. Housing authorities are misinterpreting an exemption in the law that applies to “affordable housing,” Bonta said, which is already subject to rent limits through deeds or other government agreements. 

Tenants with a Section 8 voucher are renting units on the private market available to anyone at any income level, which isn’t considered affordable housing. Bonta and other attorneys say that’s an important distinction.

The U.S. Department of Housing and Urban Development, which pays for the Section 8 program, has laid out a series of rules and guidelines for local agencies to follow when giving the money to private landlords. One of those rules is to ensure rent increases for tenants comply with state and local rent control laws.

In his June letter urging housing authorities to follow the state law, Bonta pointed to those federal guidelines as well as a federal court that said rent increases should comply with local and state rent control laws. Bonta said failure to comply would lead to counterintuitive and unfair results, given the law was intended to protect low-income tenants. 

Some housing authorities have already notified Section 8 landlords that the state’s law protects voucher holders, Bonta said, including the Los Angeles housing authority in March 2020.

“It’s a letter,” Davis said in response to Elo-Rivera. “It’s not a formal legal opinion from the attorney general. It’s a letter, but it’s certainly something we wanted to get clarity on.”

So the Housing Commission — along with other agencies across the state — followed up with Bonta and the feds “because there is such a lack of clarity,” he added. They still haven’t heard back.

A spokesperson for Bonta told inewsource late Wednesday that the attorney general made himself clear four months ago where the California Department of Justice stands.

“Housing Authorities, like all participants in the California housing market, must follow state housing law,” the spokesperson said.