SAN DIEGO — A coalition of tenant organizers and advocacy groups is taking the San Diego Housing Commission (SDHC) back to court, alleging that the agency approved illegal rent increases for Section 8 tenants and misused federal housing funds intended to support the city’s lowest-income renters.
The lawsuit, filed by the San Diego Tenants Union, Black Men and Women United San Diego, and community organizer Francine Maxwell, accuses the Commission of funneling scarce Housing Choice Voucher (HCV) funds into private landlord profits by greenlighting rent increases that violate state law—including California’s rent cap under the Tenant Protection Act.
“By disregarding state law and imposing illegal rent increases on voucher holders, the Commission is not only jeopardizing the housing stability of the lowest-income renters, but handing private landlords a windfall in profits at the taxpayers’ expense,” said Rafael Bautista, director of the San Diego Tenants Union.
According to the amended complaint filed in San Diego Superior Court, SDHC has routinely approved rent increases beyond the legal 10% annual cap or without the required 90-day notice, and then used public voucher funds to subsidize those increases—at the expense of families still waiting for assistance. The lawsuit seeks a court order halting the practice, restitution of misused funds, and a declaration that the Commission violated state tenant protections and fair housing law.
The plaintiffs allege that SDHC’s practices have disproportionately harmed communities of color. More than 77% of San Diego’s HCV recipients are people of color—30% of them Black—compared to 54% of renters overall. The lawsuit argues that illegally subsidizing rent hikes reduces the number of vouchers available to others on the waitlist, which has now stretched to 12–15 years, and disproportionately denies access to families already underrepresented in the housing market.
“Whether we rent or own, we all deserve a safe and stable place to call home,” said Parisa Ijadi-Maghsoodi, a plaintiffs’ attorney and director of California advocacy at the National Housing Law Project. “The Housing Commission denied tenants that freedom by unlawfully greenlighting rent hikes and siphoning critical voucher funds into private landlords’ wallets.”
Maxwell, a longtime San Diego organizer and former NAACP chapter president, said she filed the suit because “the Commission continues to subsidize private landlords’ illegal rent increases and force the city’s lowest-income renters to pay more in rent, while paying two private law firms to defend itself in court.” She also accused the Commission of failing to release records showing how much it spent on illegal increases, prompting a separate lawsuit under the California Public Records Act.
Under California’s Tenant Protection Act, rent increases are capped at 10% annually for most market-rate units. While certain deed-restricted affordable units are exempt, the law explicitly covers the type of market-rate units often rented by voucher holders.
In addition to violating state rent law, the plaintiffs allege that SDHC failed to meet federal Housing and Urban Development (HUD) standards that require rent increases to be “reasonable” and compliant with local regulations.
In one case cited in the lawsuit, a landlord doubled a tenant’s rent—from $1,500 to $2,950—with SDHC’s approval. The tenant, a 79-year-old woman who relies on full-time oxygen and lives on a fixed income, was told by her landlord that the increase must be legal because SDHC approved it. SDHC, for its part, told the tenant it was a private matter between her and the landlord, and denied her request for an internal review.
The plaintiffs argue that the agency’s refusal to enforce the law has encouraged landlords to treat voucher holders differently than other tenants—an alleged violation of California’s Fair Employment and Housing Act, which prohibits discrimination based on source of income.
The lawsuit also claims SDHC has violated California’s Affirmatively Furthering Fair Housing (AFFH) mandate, which requires local agencies to actively combat segregation and promote housing equity. According to the complaint, SDHC’s conduct has had “a discriminatory effect and served as a barrier to fair housing in the City of San Diego.”
Internal records cited in the suit show that SDHC was aware of stark racial disparities in the region’s homelessness rates. Black residents, who make up just 6% of San Diego’s population, account for nearly 30% of the city’s emergency shelter population.
Despite this, plaintiffs say SDHC chose to divert voucher funds away from unhoused residents and into the hands of landlords seeking inflated rents—further entrenching segregation and deepening the region’s housing crisis.
The lawsuit asks the court to compel SDHC to:
- Stop approving rent increases that violate California’s rent cap or notice laws;
- Reimburse diverted public funds;
- Comply with state and federal fair housing requirements;
- And publicly disclose how much money has been spent on illegal rent hikes over the past five years.
“This is a case about fairness, equity, and accountability,” said Ijadi-Maghsoodi. “The public has a right to know how these funds are being used—and tenants have a right to be protected, not punished.”
As the case proceeds in San Diego Superior Court, the plaintiffs say they will continue organizing with affected tenants and calling on city leadership to restore integrity and compliance in the city’s housing programs.
