Deputy City Attorneys Sara Eisenberg and Brad Russi discuss litigation strategy after winning a key procedural ruling on March 22, 2016.

Herrera wins victory for low-income tenants

Appellate court upholds SF law that prevents discrimination against Section 8 renters; Lembi-affiliated landlord, real estate broker must accept federal housing vouchers
Deputy City Attorneys Sara Eisenberg and Brad Russi discuss litigation strategy after winning a key procedural ruling on March 22, 2016.
Deputy City Attorneys Sara Eisenberg and Brad Russi discuss litigation strategy on a Section 8 housing case after winning a key procedural ruling on March 22, 2016.

SAN FRANCISCO (April 12, 2018) — On April 11, 2018, the First District Court of Appeal issued a unanimous opinion upholding San Francisco’s law that prohibits landlords from refusing to accept housing assistance, like Section 8 vouchers. City Attorney Dennis Herrera released the following statement:

“This is a huge a victory for low-income tenants.  Section 8 housing vouchers are an essential tool for many renters to secure affordable housing in our city.  That’s why San Francisco has a law prohibiting landlords from categorically refusing to accept Section 8 vouchers. The landlord and real estate broker in this case thumbed their noses at the law. The courts, however, have made it crystal clear that San Francisco’s protection for low-income renters is valid and enforceable. Let this send a strong message to other would-be scofflaws: San Francisco is going to enforce the law, protect renters, and give them a fighting chance to stay in their city.”

About the Case 

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.  

Herrera brought this case on Oct. 21, 2015 against defendants Lem-Ray Properties, an affiliate of the once-high-flying Lembi real estate empire, and broker Chuck Post to halt their unfair and illegal practice of refusing to accept Section 8 vouchers from low-income rental applicants.

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. 

In May 2016, Superior Court Judge Ronald E. Quidachay ordered the defendants to comply with the law and accept applicants from prospective tenants who rely on the federal housing vouchers. In issuing the preliminary injunction, Judge Quidachay found that Herrera is likely to prevail in the overall case.

The defendants appealed Quidachay’s ruling, but the court of appeal on Wednesday in a unanimous, published opinion upheld the lower court’s ruling.  

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 is still subject to the 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 website and other online rental postings had brazenly flouted local law by advertising that Section 8 vouchers would not be accepted as payment for Lem-Ray’s residential apartments. 

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.

# # #