Affordable housing advocates are examining the fallout from an appellate court ruling Monday, April 12th that they say can potentially leave low-income renters in a vulnerable position.

The Second District Court of Appeals ruled in favor of a Santa Monica landlord who refused to accept a Section 8 voucher from a disabled tenant.

Advocates and attorneys who represent tenants who use Section 8 vouchers feel the ruling could have a deleterious effect on those most in need of affordable housing.

Los Angeles City Councilman Bill Rosendahl, one of the council’s strongest proponents of affordable housing, was dismayed to hear about the court verdict.

“Right now, we need affordable housing more than ever,” Rosendahl, who was not familiar with the lawsuit, said. “I’m very disappointed to hear that a court would rule that way.”

A representative for People Organized for Westside Renewal, a nonprofit organization that advocates for affordable housing, called the decision a blow for low-income residents throughout the state.

“This will obviously make it more difficult for working families to find housing,” said Bill Przylucki, an organizer at POWER’s Santa Monica office. “A voucher is just a piece of paper unless you can use it.”

The Santa Monica building identified in the lawsuit is owned by real estate developer and owner of the Los Angeles Clippers, Donald Sterling.

The plaintiff in the legal action, Elisheba Sabi, alleged that the management company at the apartment complex where she resided refused to accept her voucher to cover her rent. Sabi, who emigrated from Iran to California over 20 years ago, obtained a Section 8 housing voucher approximately two years ago after her husband passed away in 2004. She has existed on disability payments, which did not cover the rent of over $1,200 a month.

Sabi filed a lawsuit with the assistance from the Legal Aid Foundation.

The California Apartment Association hailed the decision as upholding existing law pertaining to Section 8 housing as a voluntary program.

“We fully support the Section 8 program,” Eric Weigers, the association’s senior vice president of communications, stated. “But the court clearly indicated that a local or state government cannot compel a property owner to participate in the program.”

Karen McCay, a San Jose-based attorney with the law firm Pahl & McCay, said the court ruling essentially is in line with existing housing laws.

“We believe that the ruling affirms the current law surrounding Section 8 housing,” said McCay, who filed an amicus brief, or friend of the court document, to participate in the case.

Organizations like POWER are worried that recent trends like the April 12th appellate ruling and other decisions could limit low-income renters’ marketplace choices.

Tenants at Breezes del Mar, one of the last Section 8 housing developments in Venice, have been engaged in a legal action against the owner of the apartment complex, GH Capital, for several years.

Last year, the U.S. Department of Housing and Urban Development (HUD) allowed GH Capital to prepay its mortgages, which HUD owns, before they mature in 2011. According to an attorney representing the Breezes del Mar tenants, prepaying the mortgages releases the owner from any contractual obligations that pertain to Section 8 laws, which are attached to the mortgages.

“HUD has violated the law that says that there can be no prepayments of mortgages as long as there is a need for affordable housing,” alleged Brandon Weiss, an attorney with the Public Counsel Trust, which is representing several Breezes del Mar renters.

Breezes del Mar participates in the HUD 236, which provides a subsidy to reduce mortgage interest payments. As an incentive to attract developers to the program, according to HUD 236 documents, participants were given the right to prepay their subsidized mortgages after 20 years.

Under HUD 236, owners of HUD-owned properties are required, among other things, to earn rent at an authorized level, earn a limited dividend and accord tenants certain rights, which include the right to continue occupancy, unless the owners have good cause for eviction.

Ollie Jones, a 35-year resident of the apartment complex, blasted the appellate court ruling.

“I think it’s outrageous to deny anyone a place to live,” Jones said.

She added that tenants who live in Section 8 housing are often either disabled, seniors or work low paying jobs in the service industry that caters to middle class and affluent residents.

“They do the work that others don’t want to do,” Jones noted. “No matter who you are, you deserve a place to live.”

Weiss doesn’t believe the verdict will affect his clients.

“I don’t think that it will have any direct implications on the tenants at Breezes del Mar, because our lawsuit deals with project based Section 8 housing,” the lawyer explained.

Nonetheless, Weiss claimed that the ruling essentially will give property owners the legal right to discriminate against certain tenants because of their socio-economic status.

“It’s a shame that the court ruled that you can still discriminate against low-income renters,” he lamented.

Rosendahl wonders if the ruling will convince other property owners to refuse to accept low-income renters.

“I would hope that this would not discourage others from participating in the Section 8 program,” he said.

McCay doesn’t believe the verdict will cause property owners to opt out of the program.

“I respectfully disagree,” she said. “Landlords will continue to participate in Section 8, and I don’t believe this ruling will have a chilling effect on property owners deciding not to accept these vouchers.”

McCay, whose firm represents landlords who participate in the low-income assistance program, said her firm’s participation in the Santa Monica lawsuit was to address policy concerns with the housing law.

“This verdict underscores that the program is voluntary,” she added.

Rosendahl, who has apartment complexes in his district where low-income tenants reside such as Mar Vista Gardens and Breezes del Mar, applauds property owners who welcome Section 8 tenants.

“There’s a developer in my district, Tom Saffron, who is planning an excellent project on Culver Boulevard in Del Rey that will have low income and senior tenants living there,” the councilman said. “These are people who probably wouldn’t have the opportunity to live in a coastal setting if it weren’t for developers like Tom.”

Przylucki said the court decision could ignite more activism by affordable housing advocates.

“There’s a real risk now that there could be a backlash to this (verdict),” he said. “People are angry and they’re willing to fight back.”