Oceanside becomes third housing agency to start rejecting unlawful rent hikes

Low-income tenants in Oceanside will, for the first time ever, start receiving the same protection from excessive rent increases as other California renters.

The Oceanside Housing Authority, which is responsible for managing roughly $21 million in Section 8 housing vouchers, told inewsource it plans to start rejecting requests by landlords to raise rent on tenants beyond the state’s 10% maximum cap.

It marks a complete reversal from late last month, when officials told a reporter it was still an “open question” whether the state’s cap on rent hikes applies to the Section 8 program, a type of federal assistance overseen by the U.S. Department of Housing and Urban Development.

But legal arguments aside, Oceanside housing officials said last week they would change their policy by July. They told inewsource of the change the day after we reported San Diego County’s housing authority had already implemented the same protections.

“Given the need for affordable housing in our community and our neighboring housing authorities’ implementation of processes related to rent increases, the Oceanside Housing Authority plans to undertake a similar process within our administrative capacity to ensure that rent increases comply with the Tenant Protection Act,” said Ray Rull, the agency’s program manager.

Oceanside becomes the third public housing agency to start applying the rent increase cap etched in state law to low-income tenants in the federal Section 8 program, saving untold millions of dollars in taxpayer money.

It started in November with an inewsource investigation that revealed another agency — the San Diego Housing Commission — has been approving rent hikes for city residents in the program without checking if they exceed the cap in state law. A pending lawsuit filed the same month also asks a judge to compel the city’s housing agency to claw back all public money illegally paid to private landlords. 

Officials with the city’s Housing Commission have said the law doesn’t apply to Section 8 voucher holders. But despite that opinion, they have since announced plans to apply a rent cap for those low-income tenants.

Three weeks after the investigation published, county officials started checking the math on rent hikes before approving them to comply with state law. 

Oceanside’s change

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.

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.

But up until late last month, officials in Oceanside said they weren’t checking compliance because federal guidelines don’t require it. When an inewsource reporter pointed to federal guidelines that say program managers should consider local rent control before approving rent increases, they said Oceanside only has a narrow rent control law that applies to mobile home parks — it wouldn’t apply to all voucher holders. 

That’s a misinterpretation, according to attorneys  — including the California attorney general — who say housing agencies and landlords are required to follow state and local tenant protection laws.

Last week, inewsource published the news about the county’s change and a reporter sent a link to the story to Oceanside for comment. Officials responded the next day saying they were going to follow the county’s steps and implement change within the agency’s administrative capacity.

Rull, the program manager, said the agency serves about 1,700 families. Five employees are tasked with processing roughly 1,400 rent increase requests every year. As part of the change, Rull said officials will reach out to participants in the Section 8 program to “increase awareness of residents’ rights under the Tenant Protection Act and to encourage landlords to comply with local, state and federal laws governing rental housing.”

Oceanside’s housing authority is “reviewing what process would be most efficient and effective” considering its current capacity, Rull said. 

Some properties are exempt from state law, such as mobile homes, new developments and some single-family homes. Officials would have to check housing characteristics for each rent increase request to verify compliance.

But, similar to the county, Oceanside’s plan will include asking landlords to promise they’re following the law, Rull said.

Advocates and attorneys say that’s problematic, because property owners could easily assert that the law doesn’t apply to their property when it does.