Gov. Newsom today declared a state of emergency in Butte County, activating California’s anti-price gouging law, including restrictions on rent increases.

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The declaration, issued July 3, stems from the Thompson Fire in Butte County, located about 60 miles north of Sacramento in Northern California. The fire has burned about 4,000 acres and forced the evacuation of thousands of residents since its start on July 2. The state of emergency is currently set to expire on Aug. 2, but the governor can extend.

The emergency proclamation automatically triggered Penal Code Section 396, the state’s anti-price gouging law. This law makes it illegal to increase the price of many consumer goods and services, including that of rental housing, by more than 10% above pre-emergency levels. These limits on rent increases apply both to existing tenants and to rent increases at unit turnover. 

Important implications for rental housing providers: 

  • It is illegal to increase rental housing prices by more than 10% in affected areas. 
  • These limits apply to both existing tenants and new tenancies. 
  • Enforcement may extend beyond Butte County to any area in California experiencing increased consumer demand due to the emergency. 

Violations of the anti-price gouging law can result in severe penalties, including up to one year in county jail, fines up to $10,000, or both, plus potential civil penalties. Local ordinances may impose additional penalties. 

The California Apartment Association reminds members that it does not track local emergency declarations, which also trigger these protections. For local emergencies, landlords should consult relevant local authorities regarding the implications of Penal Code Section 396.