Rising Rents After a Disaster? Know Your Rights & Avoid Price Gouging
California is once again facing devastating wildfires, displacing thousands of residents and destroying entire neighborhoods. As evacuees scramble to find temporary housing, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) has issued a warning against price gouging in the rental market.
Price gouging isn’t just unethical—it’s illegal. With reports of rent spikes exceeding 25% in fire-affected areas, landlords, property managers, and tenants must understand California’s strict laws on pricing during emergencies.
What Is Price Gouging?
Price gouging occurs when the cost of essential goods and services, including housing, is inflated beyond reasonable limits during a state of emergency. In California, rental prices cannot be increased by more than 10% following an emergency declaration. This law is designed to prevent landlords from taking advantage of people in crisis.
Why Is This Warning Important Now?
Southern California’s Palisades Fire and Eaton Fire have caused widespread destruction, forcing thousands to seek temporary housing. Unfortunately, some landlords and property managers have responded by dramatically increasing rents, violating state law.
-
The Palisades Fire, which began on January 7 in Pacific Palisades, has burned 23,713 acres and destroyed more than 6,000 structures.
-
The Eaton Fire, which ignited around the same time, has grown to 14,021 acres and damaged over 10,300 structures.
-
At its peak, nearly 200,000 people were under evacuation orders; many are still displaced.
With insured losses estimated at $20 billion and total economic losses potentially reaching $50 billion, the demand for housing in affected areas has skyrocketed—leading to unethical and unlawful rent increases.
Understanding California’s Anti-Price Gouging Law
California Penal Code 396(e) at a Glance
Under California Penal Code 396(e):
✅ Rental prices cannot increase by more than 10% in disaster-affected areas.
✅ The restriction lasts for at least 30 days after an emergency is declared (and can be extended).
✅ All rental listings—MLS and off-market—must comply.
Penalties for Violating the Law
Landlords or property managers who engage in price gouging face serious legal consequences:
-
Up to one year in county jail
-
Fines up to $10,000
-
Civil penalties of up to $2,500 per violation
-
Mandatory restitution to affected tenants
Additionally, both the California Attorney General’s Office and local district attorneys are actively investigating and enforcing violations.
What REALTORS® Need to Know
Real estate professionals have to uphold ethical practices and educate clients on price-gouging laws. C.A.R. urges REALTORS® to:
🔹 Monitor rental listings carefully to ensure compliance.
🔹 Inform landlords and property managers about the 10% cap on rental increases.
🔹 Report any suspicious or excessive rent hikes to the authorities.
By ensuring compliance, REALTORS® not only protects clients from legal trouble but also maintains trust and integrity in the real estate market.
What Renters Should Watch For
For those looking for temporary housing, here are some ways to protect yourself:
1. Research Local Rental Prices
Check rental listings before the fires to compare prices. If a property’s rent has jumped significantly, it may be a violation.
2. Know Your Rights
Landlords cannot legally raise rent more than 10% during a state of emergency. If you’re being asked to pay significantly more, push back.
3. Report Violations
If you suspect price gouging, file a complaint with the California Attorney General’s Office at:
📞 1-800-952-5225
🌐 oag.ca.gov
Additionally, you can contact the California State Bar for legal assistance at 866-442-2529 or visit calbar.ca.gov.
The Bigger Picture: Ethics Over Profits
These fires have destroyed entire communities, leaving thousands without homes. Price gouging only adds to their struggles. Fair and ethical housing practices are essential during times of crisis.
C.A.R.’s warning is not just about legal compliance—it’s about doing the right thing. Every landlord, property manager, and real estate professional has a responsibility to support, not exploit, those in need.
Need Help Navigating the Market?
At Uniquely Real Estate, we’re committed to helping buyers, sellers, and renters navigate California’s housing market fairly and ethically. Whether you need rental assistance, want to buy or sell a home, or simply have questions about current market conditions, we’re here to help.
📩 Contact us today to get personalized, expert guidance for your real estate needs.
Let’s build a fair and supportive community—together.
Sources:
- CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
- NBC News - California Wildfires: What We Know About the Palisades and Eaton Fires
