San Diego County starts denying illegal rent increases following inewsource report

Following an inewsource investigation, the second largest public housing agency in the region says it is, for the first time ever, checking to ensure thousands of low-income tenants have the same protections from excessive rent increases as other California renters.

The San Diego County Housing Authority is now rejecting requests by landlords to raise rent on tenants with a Section 8 housing voucher beyond the state’s 10% maximum cap. The county made the change Dec. 1 to comply with the Tenant Protection Act, a state law that took effect in 2020.

The change, according to the county, was a response to a letter California Attorney General Rob Bonta sent all 96 housing agencies in California last summer. The letter urged officials to stop approving unlawful rent increases on low-income families the federal program was intended to protect.

But the county’s change also came three weeks after an inewsource investigation revealed another agency — the San Diego Housing Commission — has been approving rent hikes for city residents without checking if they exceed the cap in state law. A pending lawsuit filed in November also asks a judge to compel the city’s housing agency to claw back all public funds illegally paid to private landlords.

Officials with the city’s Housing Commission, which serves 17,000 families as the region’s largest public housing agency, contend that the state’s law doesn’t apply to the federal program. Despite taking that stance, officials have since announced plans to cap rent hikes for voucher holders, instead billing it as a change in agency policy. But they say that change can’t take effect without approval from the U.S. Department of Housing and Urban Development, which pays for the Section 8 program.

Alternatively, the county changed its policy without approval from HUD. That’s telling, according to an advocacy group suing the city to make the same changes.

“The county took a step in the right direction, which shows the city’s claim about needing HUD approval rings hollow,” said Francine Maxwell, chair of Black Men and Women United San Diego. “There is no reason the city can’t comply with the law.” 

Public housing agencies are responsible for managing the federal Section 8 program — one of the most significant safety nets for low-income residents anywhere in the U.S. — and are required to ensure rent increases are reasonable before using taxpayer money to pay for it.

But when the California Tenant Protection Act took effect in 2020, it set off a yearslong legal debate about whether those state protections extend to federal voucher holders. 

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.

At the time, officials with the county’s housing authority did not change any policies to check rent increases for compliance and instead told property owners to consult with an attorney to see if the law applies to their units, a county spokesperson said. Tenants who had questions about a rent increase were told to seek help from the Legal Aid Society of San Diego, the largest poverty law firm in San Diego County.

In June, more than three years after the law took effect, Bonta issued his letter insisting that Section 8 voucher holders are protected by state law and urging officials to scrutinize rent increases before approving them for families who can least afford it.

inewsource obtained 107 rent increases the County Housing Authority approved during one week last October. Only 40 showed the original rent and the request, both of which are needed to calculate the increase, and of those, four exceeded the state’s cap. 

It’s just a small sample among several thousand requests every year, a snapshot in time, and there’s no way for the public to know whether the rent increases are legal without more data and oversight. It’s possible some of the increases discovered went to properties that are exempt under the Tenant Protection Act, such as mobile homes, new developments and some single-family homes.

The county’s decision to start capping increases at levels set by state law could impact nearly 11,000 families throughout the region who rely on the federal safety net program to pay rent, saving untold millions of dollars in taxpayer money every year.

But some say the county’s move doesn’t go far enough because the agency doesn’t review housing characteristics to determine compliance — that’s data a county spokesperson said the agency doesn’t collect.

County officials instead are relying on a landlord’s word that they have read and understand state law and that their property is exempt. For all other properties, a spokesperson said staff will do the math on rent increase requests and hold those to the 10% cap.

That’s problematic, said Madeline Howard, a senior attorney with Western Center on Law and Poverty, where she works for tenants’ rights and people experiencing homelessness.

“Obviously a landlord could be free to just assert that they’re not covered when they in fact are,” Howard said. 

Property owners are already violating the Tenant Protection Act, said Gil Vera, directing attorney with the Legal Aid Society of San Diego.

“It’s not always like a nefarious reason that they’re trying to get around the rent control, but it’s sometimes that they don’t know, especially for smaller landlords,” he said. “So, that is a concern, that someone would self-certify that (the law) doesn’t apply when it does.”