California’s anti-price-gouging law can limit how much landlords charge for rental housing after certain emergency declarations. The rules can apply to existing rentals, vacant units, and other rental situations covered by California Penal Code section 396.
The law generally limits covered rent increases to 10 percent, but the calculation depends on the property’s rental history and the circumstances covered by the statute. The timing and scope of the emergency declaration also matter. Property owners should therefore review the specific requirements before changing a rental price during an emergency period.
What Is California’s Anti-Price Gouging Law?
California Penal Code section 396 prohibits charging excessive prices for specified goods and services during a declared state of emergency or local emergency. It covers items such as food, emergency supplies, medical supplies, building materials, and transportation, each subject to its own pricing rule. It also contains a separate provision governing rental housing, which is the focus here.
The purpose of the statute is to prevent sellers and landlords from using an emergency to extract a windfall from people who suddenly need housing, fuel, or supplies. The rental housing provision applies this same purpose to landlords: it limits how much a rental price may increase once a qualifying emergency triggers the statute. It is a distinct body of law from local rent-control ordinances, which apply on their own terms regardless of any emergency.
When Does California’s Anti-Price-Gouging Law Apply to Rental Housing?
The rental housing restriction applies only after a qualifying emergency has been formally declared. A disaster occurring in the area is not, by itself, enough. The statute is triggered by:
- A state of emergency, proclaimed by the President of the United States or the Governor of California.
- A local emergency, declared by an official, board, or governing body with authority to make that declaration in a city, county, or city and county.
Qualifying events include earthquake, flood, fire, riot, storm, drought, plant or animal infestation or disease, pandemic or epidemic outbreak, or another natural or manmade disaster. Once a qualifying proclamation or declaration is made, the restriction applies for 30 days in the area the declaration covers, to housing advertised, offered, or charged to an existing or prospective tenant. It does not apply statewide unless the declaration itself is statewide. It also does not apply before the declaration or after it expires, unless extended under the rules described later.
How Much Can a Landlord Increase Rent After a Disaster?
Once the restriction applies, a landlord generally cannot increase the rental price, as advertised, offered, or charged, by more than 10 percent above the pre-emergency price. This limit applies both to an existing tenant’s renewal and to a new tenant being offered the same unit.
The baseline matters as much as the percentage. For housing that was previously rented, the baseline is the actual price the prior tenant paid. If the unit was vacant, it is the most recent price offered before the emergency was declared. A landlord cannot pick a higher, hypothetical market price as the starting point. A unit that rented for 2,000 dollars a month before the emergency, for example, generally cannot be advertised above 2,200 dollars during the restricted period, regardless of current demand.
A separate adjustment applies if the unit’s condition changes: a landlord may add up to 5 percent more if housing previously offered unfurnished is now offered fully furnished. That adjustment is specific and narrow. It does not apply to other upgrades, such as new appliances or renovated finishes.
What If the Property Was Not Previously Rented?
Housing that was never previously rented does not simply fall outside the statute. The law sets a different baseline for it: the maximum rental price is 160 percent of the fair market rent set by the U.S. Department of Housing and Urban Development for the area. A property owner cannot assume a newly listed unit is exempt just because there is no prior price to compare against.
This provision matters for owners converting a property to a rental for the first time, or listing a unit that sat off the market, while a qualifying declaration is active. The HUD fair market rent figure for the area and unit size is the reference point, not the landlord’s own sense of demand.
Can a Landlord Raise Rent to Cover Disaster-Related Costs?
The statute allows a narrower cost-based adjustment for rental housing than it does for goods and other services. Two categories are recognized:
- Increases already agreed to by contract before the emergency was declared, such as a scheduled lease escalation set out in advance.
- Additional costs for repairs or additions that go beyond normal maintenance, when those costs justify the specific increase charged.
Rising insurance premiums, higher property taxes, or general increases in operating costs do not, by themselves, authorize an increase beyond the 10 percent limit. A landlord facing higher costs after an emergency does not automatically gain a basis to pass every one of those costs on through rent. Any cost-based increase still has to fit one of the two recognized categories. A landlord relying on this exception should be ready to document the specific cost and its connection to the increase charged.
Can Landlords Add Fees or Services to Avoid the Rent Cap?
The statute closes off several common workarounds directly. It is not a defense that an increase was based on the length of the rental term, or on added goods or services, other than the furnished-housing adjustment above. It is also not a defense that the rent was paid by an insurance company or other third party.
A landlord cannot structure a higher charge as a short-term lease premium, a bundled furniture or utility package, or a service fee layered on top of base rent, if the effect is to exceed the 10 percent limit. The statute looks at the total price charged, not the label placed on each piece of it.
How Long Does the California Rent Price-Gouging Restriction Last?
The restriction begins automatically for 30 days after officials declare a qualifying state or local emergency. That period is not permanent. A local legislative body, local official, Governor, or Legislature may extend it to protect lives, property, or public welfare.
A local legislative body or official can extend the restriction for up to 30 days at a time. The authority can renew the restriction in additional 30-day increments.
State-level extensions do not face the same 30-day limit. The Governor has used this authority before. After the January 2025 Los Angeles County wildfires, the Governor issued several executive orders extending rental restrictions in affected areas.
Those extensions continued the restrictions beyond the initial 30-day period. They occurred in stages over more than a year. This history shows that the restriction can last much longer than 30 days. However, an authorized extension must be in effect.
Property owners should confirm the current declaration and extension status for their specific area and date. They should not assume that the restriction has ended or remains in effect.
What Are the Penalties for Violating California’s Price-Gouging Law?
A violation of the rental housing provision constitutes a misdemeanor. It carries up to one year in county jail, a fine of up to $10,000, or both.
The statute also prohibits landlords from evicting a tenant during the restricted period. They cannot then rent the unit to someone else at a higher lawful price. An exception applies when the eviction process lawfully began before the emergency declaration.
A violation also constitutes an unlawful business practice and unfair competition under Business and Professions Code section 17200. This allows civil enforcement, including injunctive relief, restitution, and civil penalties of up to $2,500 per violation.
The Attorney General, a district attorney, or a city attorney can bring a civil action. The California Attorney General publishes consumer guidance on these rules and how to report suspected violations.
What Should Property Owners Document After an Emergency?
Good documentation is what allows a property owner to show that a rental price complies with the statute, rather than simply asserting that it does. Useful records include:
- Prior rental agreements and the exact rent charged before the emergency.
- Advertisements or listings showing the most recent offered price, if the unit was vacant.
- Rent rolls or payment records for the unit and comparable units.
- The specific emergency declaration, its effective date, and its geographic scope.
- Invoices for repairs or additions that go beyond normal maintenance.
- Insurance records connected to any claimed cost increase.
- Property management records showing how the unit was marketed and priced.
- Written communications with tenants about any proposed rent change.
This is not a list of steps for working around the statute. It is the record needed to show, after the fact, that a price was based on a lawful baseline or exception, not market demand.
What Should Property Owners Do Before Changing Rent After a Disaster?
A property owner considering a rent change during or after an emergency should work through the following steps:
- Confirm whether a qualifying state or local emergency declaration is actually in effect.
- Check the geographic area the declaration covers and its effective and expiration dates.
- Review the property’s prior rental history to identify the correct statutory baseline.
- Review the current text of Penal Code section 396 for the specific provisions that apply.
- Separate any permitted price change from added fees or services that will not justify exceeding the cap.
- Document the property’s costs and rental records before finalizing a new price.
- Obtain legal advice if the property’s rental history, condition, or the applicable declaration is unusual or disputed.
When Should a Property Owner Talk to a California Real Estate Lawyer?
Several situations call for legal advice rather than a general reading of the statute:
- A rent increase is planned during an active emergency declaration, and the baseline price is unclear or disputed.
- A property was not previously rented, and the correct HUD fair market rent figure is uncertain.
- Repair or operating costs are significant enough to raise a question about a cost-based exception.
- A tenant has alleged price gouging, or a government agency has sent a warning letter or inquiry.
- An eviction during the restricted period could be read as an attempt to re-rent at a higher price.
- The property owner is unsure how a state or local extension applies to a specific date or location.
Reviewing Rental Pricing During a Declared Emergency
California’s anti-price-gouging law can restrict rental-price increases during qualifying emergencies. The applicable limit depends on the emergency declaration, the property’s rental history, and any relevant statutory exceptions. The law also operates separately from local rent-control ordinances and other tenant protections.
Before changing a rental price, property owners should confirm that the statute applies and review the current requirements of Penal Code section 396. A specific property may raise questions that a general 10 percent rule does not answer.
Kassouni Law represents California property owners in real estate and rental-property matters. If you have questions about rental pricing during a declared emergency, the firm can review the applicable legal requirements and your property’s circumstances.
Contact Kassouni Law at 877-770-7379 or submit an inquiry at kassounilaw.com/contact. Submitting a contact form does not create an attorney-client relationship.
Frequently Asked Questions
What is California’s anti-price-gouging law?
Penal Code section 396 limits how much sellers and landlords can raise prices for specified goods, services, and rental housing during a declared emergency, generally for an initial 30-day period.
Can a California landlord raise rent after a disaster?
Sometimes, within limits. Once officials declare a qualifying emergency, the law generally caps rent increases at 10 percent above the pre-emergency price, subject to narrow exceptions.
Is there a 10 percent limit on rent increases during an emergency?
Yes, for housing covered by an active state or local emergency declaration. The limit is measured against the specific statutory baseline for that property, not against current market rates.
How long does California’s rent price-gouging law last?
The default period is 30 days after the declaration, but local, state, or legislative extensions can make the restriction last considerably longer in a specific area.
Does California’s price-gouging law apply to newly rented properties?
Yes. The statute caps previously unrented housing at 160 percent of the area’s HUD fair market rent.
Can landlords raise rent to cover disaster-related costs?
Only in limited circumstances, such as a pre-existing contractual increase or documented repair costs beyond normal maintenance. General cost increases, such as higher insurance or taxes, do not by themselves justify exceeding the cap.
What happens if a landlord violates California’s price-gouging law?
A violation is a misdemeanor, punishable by up to a year in jail, a fine of up to 10,000 dollars, or both. It can also trigger civil enforcement, including penalties, restitution, and injunctive relief.
