After inewsource report, officials offer plan to cap rent hikes for low-income tenants

San Diego tenants with a Section 8 housing voucher could soon see the same protection against excessive rent increases as everyone else in the private housing market.

The San Diego Housing Commission, which hands out roughly $300 million every year in vouchers to help low-income tenants pay rent, last week proposed capping rent increases at a maximum of 10% over a 12-month period in the federal safety net program.

If approved, the change would cap rent hikes for voucher holders at levels already set by state and local tenant protection laws.

Some tenant rights advocates and attorneys say the policy change is long overdue and simply would bring the San Diego Housing Commission into compliance with state laws the agency should have been following all along. They also point out that federal guidelines already say laws limiting rent increases should be taken into consideration before approving increases.

“It’s extremely concerning that the Housing Commission does not seem to be acknowledging that they have to follow the Tenant Protection Act,” said Madeline Howard, a senior attorney with Western Center on Law and Poverty, where she works for tenants’ rights and people experiencing homelessness.

Howard was referring to the state law that caps increases at 10% for many properties. 

Local housing officials, however, have denied breaking the law. They say the state’s cap doesn’t apply to federal Section 8 voucher holders. That’s a position advocates, some housing authorities and the state attorney general all say is wrong.

But now the Housing Commission is proposing the change anyway, promoting it as a way to help maintain housing stability and prevent evictions, and foster an environment where landlords implement rent increases that are measured and incremental, rather than sudden and significant.

“We are constantly seeing policy choices — for example, around ticketing people who are residing in their vehicles — where small costs become destabilizing and then balloon into large costs that we all have to deal with as somebody becomes increasingly unstably housed,” Ryan Clumpner, vice chair of the Housing Commission’s board, said Friday after the presentation.

The agency’s announcement of the rent increase policy is timely. 

It comes two months after an inewsource investigation revealed the agency has been approving rent hikes without checking to ensure they comply with the state’s cap. It also follows a lawsuit filed in San Diego Superior Court in November asking a judge to end the Commission’s “practice of approving and subsidizing illegal rent increases.” The lawsuit also asks the court to compel the agency to recover all public funds illegally paid to private landlords.

Shortly after inewsource published the investigation, the Housing Commission’s then-interim CEO told elected leaders the agency didn’t think state law applied to the federal program.

The disagreement started in 2020 when the California Tenant Protection Act took effect, capping rent increases for many properties. But some housing agencies, including in San Diego, didn’t see that cap as applying to Section 8 voucher holders, among the most vulnerable residents in any community. San Diego housing officials have pointed to an opinion written by legislative attorneys one month after the law took effect as their guidance. 

Conflicting interpretations of law in state government

Since the California Tenant Protection Act took effect, differing opinions on whether the law applies to Section 8 tenants have emerged. Attorneys for the state Legislature said the law’s protections from excessive rent hikes did not apply to Section 8 voucher holders. The attorneys argued the law exempts “affordable housing” that is already subject to rent limits through deeds or other government agreements. But critics, including the state attorney general – the chief law enforcement officer for California – say that’s a misinterpretation. Section 8 voucher holders are renting units on the private market available to anyone at any income level, which isn’t considered affordable housing. Attorneys say it’s an important and overlooked distinction.

In an attempt to settle the debate last summer, California Attorney General Rob Bonta sent a letter to every public housing agency in the state. He said the law clearly protects voucher holders and warned officials to stop approving unlawful rent increases on low-income families the federal program was intended to protect.

A Housing Commission spokesperson declined to comment Friday on the proposal or answer any questions related to it. The Housing Commission’s board could vote on the proposal next month. Officials anticipate it would take effect sometime this fall, pending approval from the U.S. Department of Housing and Urban Development, which pays for the Section 8 program.

Attorneys and advocates have been asking the Housing Commission, which is responsible for approving rent increases on Section 8 voucher holders, to follow state law for the past four years, said Gil Vera, a senior attorney with the Legal Aid Society of San Diego.

Vera said he wonders what relief might be in store for tenants whose rents were already approved for more than the cap, and he’s concerned about what could happen to tenants until the Housing Commission decides to act.

“If you’re a landlord out there and you’re seeing this in the city of San Diego, you’re like, ‘I need to increase these (Section 8) rents right now and I need to increase them beyond the 10% (cap),’ ” Vera said. “I’m concerned that, in this implementation lag period, Section 8 tenants are going to get massive rent increases in anticipation of this limit being applied.”

Local leaders in San Diego are up against a worsening housing and homelessness crisis. Less than 1% of the city’s rental housing stock is vacant, driving up rents 15% in a single year. And officials have seen record numbers of unhoused people living in public spaces across San Diego, which recently earned the title of the most expensive place to live in the country. 

More than 17,000 families in San Diego rely on Section 8 to pay rent and remain housed, at a time when more people are falling into homelessness than those who manage to find housing.  

The Housing Commission’s proposal was included in a routine presentation on the agency’s annual plan, during the first board meeting of the year and under new President and CEO Lisa Jones.

Officials acknowledged this change will save taxpayer money in the long run, and ensure rent increases for voucher holders align with protections afforded to everyone else. They did not mention the pending lawsuit in open session. 

Some say this change is a step forward, but it’s possibly in the wrong direction.

While the Housing Commission’s proposal mirrors the state’s 10% cap, it diverges from the law in two key ways: It creates a path for property owners who say they can’t afford such a cap to file an appeal, and it could wind up being more restrictive than state law by including properties that would otherwise be exempt.

The Housing Commission doesn’t have the authority to adopt a policy where a landlord could be exempt from state law because they are financially burdened by it, said Howard, with the Western Center on Law and Poverty.

And certain properties are already exempt from the state’s law, such as mobile homes, new developments and some single-family homes. The proposal presented last week doesn’t mention any exemptions.

That might cause some problems among property owners and housing providers, said Molly Kirkland, director of public affairs with the Southern California Rental Housing Association.

Kirkland said her team hasn’t had time to vet the proposal and take a formal position, but they prefer policies to be consistent with state law. 

“When you start having different rules in different places, it creates confusion,” Kirkland said.