How to know when a rent increase is illegal

Four years ago, California Gov. Gavin Newsom signed two laws on the same day that were hailed as the strongest renter protections in the nation.

One set a 10% maximum cap on rent increases, with a few exceptions, and the other prohibited landlords from discriminating against people with a Section 8 housing voucher, a federal program that helps low-income tenants pay rents on the private market.

Attorneys and advocates took that as a clear sign: California lawmakers wanted to protect tenants, especially those with a Section 8 voucher. 

But some property owners and public housing authorities, including the San Diego Housing Commission, have a different take. They point to opposing legal opinions and ambiguity about whether state law applies to the federal Section 8 program. They didn’t think voucher holders, who are among the most vulnerable residents in any community, were protected from unlawful rent increases.

It set off a yearslong dispute that ultimately involved the state attorney general, who said earlier this year that Section 8 voucher holders are protected and warned public housing agencies to stop approving unlawful rent increases on low-income families the federal program was intended to protect.

An inewsource investigation revealed the San Diego Housing Commission, which is responsible for managing about $300 million in federal vouchers for city residents, hasn’t been checking to ensure proposed increases comply with the law. A lawsuit filed this month aims to force compliance and compel the agency to claw back any money paid to private landlords to cover unlawful increases. 

While declining to comment on the suit, a Housing Commission spokesperson said the agency has been planning to roll out a new local policy early next year that complies with state law. 

But the problem is much broader. 

Experts and attorneys say it’s affecting tenants across San Diego County of all income levels, with or without Section 8 vouchers. Here are some red flags that tenants can look out for:

🚩 Increases over 10% 

The California Tenant Protection Act says landlords cannot increase rents within a 12-month period more than 5% plus inflation, for a maximum cap of 10% each year. Certain properties are exempt from the law, such as mobile homes, new developments and some single-family homes.

But for the most part, many San Diegans are protected, said Gil Vera, a senior attorney with the Legal Aid Society of San Diego.

The most obvious red flag to look out for is an increase that exceeds 10%. But tenants with a Section 8 voucher may have an uphill battle until housing authorities start rejecting increases that violate the Tenant Protection Act.

Attorneys, including the state’s attorney general, say some landlords and local agencies are misinterpreting an exemption in the law that applies to “affordable housing” — units that are already subject to rent limits through deeds or other government agreements. This includes low-income housing that was built using tax credits, for example.

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. Attorneys say that’s an important distinction.

🚩 ‘Junk fees’

New fees for water, sewer or trash — even a sudden requirement to obtain renters insurance — is another red flag.

Attorneys argue the cap on rent increases also applies to any fees applied to amenities or utilities that were previously included in the lease. Vera said they’re starting to see landlords use this as a way to get around state caps.

“It’s kind of in the same vein that we’re seeing in other industries, which are junk fees,” Vera said. “The landlord might have previously paid that out of pocket and now we’re seeing more of a shift toward passing on those utilities to tenants.”

Even if the fee seems small — say, an extra $20 a month to cover maintenance or utilities — tenants should still reach out for help. Those monthly fees add up and could violate the spirit of the law, said Parisa Ijadi-Maghsoodi, a poverty and civil rights attorney. She and her team have sued the Housing Commission to force compliance with state law and claw back public money used to cover unlawful increases.

“The spirit of the law is to ensure that people aren’t being displaced from these increases,” she said.

🚩 Multiple increases 

Tenants who receive more than one increase within a 12-month period should start asking questions. That’s because the state’s cap applies to the lowest rent charged in the previous year.

So, for example, let’s say a landlord raises the rent on a tenant and it works out to a 5% increase. But the landlord later finds out they could have gotten twice that, and they decide to raise it again. 

The new rent still can’t be more than 10% higher than the lowest rent in the last year. And even if the rent exceeded 10% and applied to a property that’s exempt under the law, landlords still have to provide sufficient notice.

🚩 Insufficient notice 

Tenants who receive notice of a rent increase in person, over text message or email, or in a phone call or voicemail, should consider reaching out for help. 

State laws dictate how rental housing providers are supposed to serve tenants with rent increase notices, Vera said, and right now electronic service does not count. That means, notices have to be in writing, delivered to the tenant personally, put on the door or sent in the mail.

Generally, landlords have to provide tenants 30 days’ notice if they plan to increase the rent. But that notice requirement jumps to 90 days if they intend to increase the rent above 10% on properties that are exempt from the state’s rent cap.

Some tenants who aren’t protected under the law still aren’t receiving proper notice. Vera said he has noticed landlords using outdated forms to notify tenants, thinking they are in compliance even when they aren’t.

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