A civil case that alleges a San Francisco single room occupancy hotel owner barred Section 8 voucher users from several residential hotels in the Tenderloin will move closer to trial, Judge Ronald Quidachay ruled Tuesday.

The suit, filed last October by City Attorney Dennis Herrera, contends that Lem-Ray Properties and Chuck Post, a broker working for the company, posted ads online saying the company does not take Section 8 vouchers. The vouchers are a federally funded program that helps low-income residents pay rent.

City law, passed to address a housing and affordability crisis, says landlords are not allowed to choose if they want to accept Section 8 vouchers.

“There were a number of ads posted online stating that no Section 8 vouchers will be accepted,” said Deputy City Attorney Sara Eisenberg. Those ads were mirrored by statements made as late as the end of 2015 saying the same, she added.

But defense lawyer Ed Sanger argued, unsuccessfully, that state law says no one can be discriminated against because of their income by a landlord. Sanger said landlords are not forced to include Section 8 vouchers when determining income eligibility for a potential tenant.

“The issue before the court today was, ‘Does the state law preempt the effort of the local law?’,” Sanger said, who added that his client rents to Section 8 residents. “I am not saying it’s the right policy, I’m saying it’s the law.”

But Eisenberg countered that the two laws do not work at cross purposes since their intent differs.

According to the City Attorney’s Office, Lem-Ray Properties is part of the Lembi family real estate holdings, which was sued by Herrera in 2006 for harassing tenants and illegal business practices at 30 locations, which included 935 Geary St. A civil injunction was granted following the suit.

The suit seeks monetary damages for each violation of a court order from 2011 related to the law suit previously filed by Herrera.

Sanger said his client plans to appeal if they lose their case.