On Feb. 4, Gov. Gavin Newsom issued an executive order expanding rental housing price gouging protections related to the Los Angeles area fires to leases of any length, rather than limiting them to leases of one year or less. The order responds to reports of landlords offering leases of 366 days to bypass price gouging restrictions.

The governor declared a state of emergency in Los Angeles and Ventura counties on Jan. 7, 2025, due to the Los Angeles area fires, automatically triggering Penal Code Section 396, the state’s anti-price gouging law. The law caps rent increases at no more than 10% above pre-emergency levels. These protections apply to existing tenants and at unit turnover. Violations can result in penalties, including fines of up to $10,000, imprisonment for up to a year, or both, along with potential civil liabilities.

Additionally, the governor’s executive order exempts single-family homes with four or more bedrooms in specified ZIP codes from the rent increase limitations under Penal Code 396, provided they were not rented or offered for rent within one year before the emergency declaration. To qualify for the exemption, the property must:

  • Have been vacant and not offered for rent within one year prior to Jan. 7, 2025.
  • Be a single-family home with four or more bedrooms.
  • Have a Small Area Fiscal Year 2025 Fair Market Rent, as calculated by the U.S. Department of Housing and Urban Development (HUD), of at least $5,500 for four-bedroom units.
  • Be located in the following ZIP codes: 90015, 90049, 90067, 90077, 90094, 90210, 90263, 90265, 90266, 90272, 90274, 90275, 90290, 90291, 90292, 90703, 91011, 91105, 91210, 91301, 91302, 91307, 91354, 91364, 91436, 91709, and 91789.

The state of emergency and its accompanying price gouging protections are set to expire on March 8, 2025, but may be extended.

Landlords should review their rental policies to ensure compliance with the law. Additionally, they should consult with local authorities regarding any additional price gouging protections that may apply under local emergency declarations, as the California Apartment Association does not track such declarations.