Herrera wins preliminary injunction in Section 8 housing discrimination case

Lembi-affiliated landlord, real estate broker must accept federal housing vouchers from low-income renters under local law, Superior Court Judge Quidachay rules

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Deputy City Attorneys Brad Russi and Sara Eisenberg in court before hearing.

SAN FRANCISCO (May 24, 2016)—A San Francisco Superior Court judge has granted City Attorney Dennis Herrera’s motion for a preliminary injunction ordering defendants Lem-Ray Properties, an affiliate of the once-high-flying Lembi real estate empire, and broker Chuck Post to immediately halt their unfair and illegal practice of refusing to accept Section 8 vouchers from low-income rental applicants. The ruling issued late Friday by Judge Ronald E. Quidachay asserts that the defendants must comply with the law and cannot discriminate against prospective tenants who rely on federal housing vouchers. In issuing the preliminary injunction, Judge Quidachay found that Herrera is likely to prevail on the causes of action in his suit filed against the defendants in October 2015.

“I am grateful that the court agreed with our position that the defendants’ blanket refusal to accept these vouchers is illegal,” said Herrera.  “Section 8 housing vouchers are an essential tool for many renters to secure housing in our city.  It was wrong for Lem-Ray Properties to discriminate against these low-income renters. Judge Quidachay’s ruling should remove all doubt about the validity of San Francisco housing laws, and send a strong message to other would-be scofflaws from engaging in similar illegal conduct. In the midst of a severe housing crisis, it is critical that we protect programs that offer San Francisco renters a fighting chance to stay in San Francisco.”

Section 8 vouchers—so named for Section 8 of the Federal Housing Act, and also known as the Housing Choice Voucher Program—are administered locally by the San Francisco Housing Authority.  The program allows low-income families to secure housing in the private rental market by requiring qualifying renters to pay thirty percent of their income toward rent, with Section 8 vouchers covering the remainder.  The vouchers impose no additional costs on landlords, and landlords’ refusal to accept them violates local law. 

Lem-Ray is among the entities associated with the Lembi family’s once expansive CitiApartments-Skyline Realty empire, which Herrera sued in 2006 for an array of lawless business and tenant harassment practices involving at least 30 properties.  The defendant, which until recently was  subject to a 2011 civil injunction Herrera secured in his five-year litigation battle, is among the landlords memorably dubbed “the Scumlords” in an award-winning 2006 exposé by investigative reporter G.W. Schulz.  Schulz won first-place honors from the California Newspaper Publishers Association in 2007 for his San Francisco Bay Guardian series on tenant mistreatment by the Lembis, who at the time were among the largest residential property owners in the city.  Chuck Post, also named in Herrera’s civil suit, is a real estate broker whose ApartmentsinSF.com website and other online rental postings brazenly flouted local law by advertising that Section 8 vouchers would not be accepted as payment for Lem-Ray’s residential apartments. 

Under San Francisco law, property owners and real estate agents are prohibited from refusing to accept federal, state, or local housing subsidies as a form of rental payment, or to indicate in rental advertisements that housing subsidies will not be accepted as payment.  Post and Lem-Ray are both alleged to have violated the local law, according to Herrera’s complaint, together with provisions of the California Unfair Competition Law that prohibit unfair and unlawful business practices. 

If successful, Herrera’s lawsuit could secure civil penalties against Lem-Ray Properties of up to $6,000 for each violation of its 2011 court order, and civil penalties against both defendants of $2,500 for each violation of the state Unfair Competition Law.  Both defendants could also be liable for three times the amount of a single month’s rent in which the landlords charged for any unit in violation of the Police Code provision.  Herrera is also seeking a permanent injunction against both parties to bar them from business practices in violation of state or local law.

The case is: City and County of San Francisco and People of the State of California v. Chuck M. Post, Lem-Ray Properties I DE, LLC et al., San Francisco Superior Court Case No. 548551, filed Oct. 21, 2015.

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