Emergency price-gouging rules for California rental housing

The short answer

Penal Code section 396 can restrict the price advertised, offered, or charged for residential housing after a qualifying emergency declaration. For covered rental housing, the general rule prohibits an increase of more than 10 percent during the applicable period unless a statutory exception supports the increase.

The rental restriction ordinarily lasts 30 days after the declaration. The Governor, Legislature, or local governing body can extend the period; a local extension is limited to 30 days at a time. Different declarations and extensions can overlap.

No evergreen webpage can reliably state that a particular California address is covered today. Before quoting or demanding rent, the owner should create a declaration memo identifying:

• Who issued the declaration.
• The emergency and geographic area.
• The declaration’s effective date.
• Each valid extension.
• The applicable start and end date.
• The unit’s statutory baseline price.
• Any permitted cost adjustment.
• The separate state and local rent restrictions that also apply.

What to do first

1. Pause the proposed rent event. Do not publish the listing, send the increase, or collect the new amount until coverage is checked.
2. Identify the property and affected consumer. Record the exact address, unit, current tenant, prospective tenant, and proposed lease term.
3. Find every relevant declaration. Check presidential, gubernatorial, county, and city action.
4. Build an extension timeline. Preserve each order or resolution and its expiration.
5. Calculate the statutory baseline. Use actual rent, prior offering records, or the statutory fair-market-rent formula as applicable.
6. Test every added charge. Furniture, services, term length, insurer payment, and fees generally do not create an easy workaround.
7. Compare other rent limits. Section 396 does not authorize an increase prohibited by rent control or another law.
8. Preserve the file. Keep declarations, listings, leases, ledgers, screenshots, invoices, calculations, and notices.
9. Review any proposed termination. Eviction followed by higher re-rental can create separate exposure.

What not to do

• Do not rely on a news article that says an emergency “has been extended” without reading the actual order.
• Do not assume a statewide declaration covers every county for every purpose.
• Do not assume the 30-day period begins when the owner learned of the emergency.
• Do not use a shorter lease term to justify a higher effective price.
• Do not repackage the increase as a service, fee, utility, or furniture charge without statutory analysis.
• Do not rely on an insurer or other third party paying the rent.
• Do not evict an existing tenant and offer the same housing at a price section 396 would prohibit.
• Do not treat a lawful emergency increase as permission to exceed a stricter state or local cap.
• Do not copy a pandemic-era or wildfire-era end date into a current file.

When the rental rule is triggered

Section 396 applies after:

• A state of emergency declared by the President of the United States or Governor of California; or
• A local emergency declared by an official, board, or other governing body authorized to do so.

The actual declaration controls. The owner must match its text to the property’s geography and the rental transaction’s date.

An emergency may involve wildfire, earthquake, flood, storm, public health, utility failure, or another qualifying event. The type of event does not replace the need for a formal declaration.

For this part of section 396, “housing” generally concerns rental housing with an initial lease term of no longer than one year. Longer-term arrangements and unusual occupancy structures still require review under other rent, contract, and emergency law.

Duration

For rental housing, the statutory restriction generally applies for 30 days following the declaration. It can continue longer when:

• The declaration or later gubernatorial action validly extends the relevant protection.
• The Legislature extends it.
• A local governing body extends the period because necessary to protect lives, property, or welfare.

Each local extension may last no more than 30 days, but a body may act again. Save every enactment rather than recording only a presumed final date.

Geography

Coverage can be statewide, countywide, city-specific, or defined by another geographic description. A declaration issued in one jurisdiction does not necessarily protect transactions elsewhere. Multiple declarations may cover the same address on different dates.

The general 10 percent rental limit

During a covered period, section 396 generally prohibits an owner or operator from increasing the rental price advertised, offered, or charged to an existing or prospective tenant by more than 10 percent.

The law reaches:

• Demands to an existing tenant.
• Advertised rent for a vacant unit.
• Offers made to prospective tenants.
• Amounts actually charged.

Correcting the lease after collection may not erase the earlier event. Confirm the current rule before making a demand.

Limited cost-based exception

An increase beyond 10 percent may be defensible when directly attributable to additional costs for repairs or additions beyond normal maintenance, amortized over the rental term, or when the increase was contractually agreed before the declaration.

This is an evidence rule, not a general “costs increased” exception. Preserve:

• The pre-emergency agreement, if any.
• Invoices and proof of payment.
• The distinction between repair/addition and normal maintenance.
• The allocation to the specific unit.
• The amortization method and lease term.
• The calculation separating the supported amount from ordinary rent.

Ordinary market demand, lost opportunity, mortgage cost, insurance premium, or a desire to recover renovation expense does not automatically satisfy the text.

Calculating the baseline rental price

Section 396 contains different baselines depending on the unit’s history.

Housing rented or offered within the preceding year

The baseline generally looks to the rental price actually charged or most recently offered before the declaration. Preserve the last lease, ledger, listing, platform record, broker communication, and any concessions.

Housing not rented or offered within the preceding year

The statute generally uses 160 percent of the fair market rent established by the United States Department of Housing and Urban Development. The applicable area, unit size, year, and published schedule must be documented.

Furnished housing

For qualifying fully furnished housing, the statute generally permits a 5 percent addition to the otherwise applicable baseline. “Furnished” should be supported with the lease, inventory, photographs, and actual condition. The allowance is not permission to price furniture without limit.

Daily rental price

Special calculation rules apply where housing was rented on a daily basis. A short-term label does not remove the transaction from review, and separate local short-term-rental laws may prohibit or condition the use.

Mobilehomes and spaces

The statute includes mobilehome-specific definitions and treatment. Determine whether the transaction concerns the dwelling, space, or both, then review the current text and the Mobilehome Residency Law.

Lease term, services, and third-party payments

Section 396 prevents several common attempts to avoid the cap:

• A price is not insulated merely because the new lease has a different term.
• Added services do not generally justify a prohibited price increase.
• Furniture receives only the specific statutory treatment.
• Payment by an insurer, relief organization, employer, or another third party does not eliminate the protection.

Calculate the economic terms as a whole. Rent, mandatory fees, utility allocations, furniture charges, service charges, and required add-ons may all matter to the factual analysis.

Eviction and re-rental risk

During the applicable period, section 396 generally prohibits evicting a residential tenant and then renting or offering the unit to another person at a price greater than the statute allows.

The text contains an exception where the eviction process was lawfully initiated before the declaration. That exception should be documented from actual service and court records; it is not a reason to accelerate a termination after an emergency.

Separate just-cause, retaliation, anti-harassment, habitability, relocation, and fair-housing rules still apply. An owner should not make possession decisions from the emergency pricing rule alone.

Relationship to other rent law

Section 396 is an additional ceiling. It does not authorize:

• An increase above Civil Code section 1947.12.
• An increase above a valid local rent cap.
• More frequent increases than another law permits.
• A notice shorter than Civil Code section 827 or local law requires.
• An increase while local registration or compliance rules bar it.
• A discriminatory, retaliatory, or otherwise unlawful increase.

Use the lowest lawful result after applying all relevant rules.

A declaration memo that can be audited

For every proposed transaction, record:

If any row is missing, the compliance answer is not ready.

Examples with explicit assumptions

Existing tenancy during a covered declaration

Assume a declaration covers the address, the 30-day rental period has not expired, and the tenant paid $4,000 per month before the declaration. Without another valid limit or a supported statutory exception, section 396 would generally prohibit demanding more than $4,400 during that period. A stricter state or local cap could produce a lower lawful amount.

Vacant unit not offered during the prior year

Assume the property is covered by the declaration and the unit was neither rented nor offered for rent during the preceding year. The owner should use the statute’s 160-percent HUD fair-market-rent baseline, plus only an applicable furnished allowance, rather than an unsupported market comparison.

Work completed after the emergency

Assume the owner incurred genuine additional repair costs beyond normal maintenance and wants an increase over 10 percent. The owner needs unit-specific invoices and a reasonable amortization over the rental term. The entire remodel budget cannot simply be added to one month’s rent.

The emergency period has ended

Assume every applicable declaration and extension has expired before the listing. Section 396’s emergency rental restriction may no longer apply to that event. The lease, statewide cap, local rent control, notice periods, and other laws still govern.

These examples omit facts that can change the result.

Enforcement and business risk

A violation of section 396 is a misdemeanor punishable by up to one year in county jail, a fine of up to $10,000, or both. The conduct can also support enforcement under California’s Unfair Competition Law. Statutory remedies are cumulative.

Beyond formal enforcement, a pricing error can affect:

• A lease negotiation.
• A rent-demand record.
• Tenant claims and defenses.
• Broker and manager relationships.
• Insurer or relief-program reimbursement.
• Public reputation following a disaster.

The right response is a documented price decision, not a rushed estimate.

Related services and guides

• Rent Control and Just-Cause Compliance
• California Rent Increases and Notice Periods
• Costa-Hawkins and Local Rent Control
• Rent Payments, Fees, and Charges
• Post-Disaster Remediation
• Local Landlord Law Center

Official legal sources

• Penal Code section 396
• Governor of California proclamations
• California Attorney General: price gouging during disasters

California framework reviewed through: July 26, 2026 research; confirm the current rule before acting
Live-status warning: Emergency declarations and extensions can change without this page changing. Verify the issuing authority, geography, effective dates, extensions, baseline, and every other applicable rent limit on the day of the transaction.

Request an Emergency Rent Review

Law Laguna can assemble the declaration timeline, calculate the supported baseline, compare other rent limits, and create a written file before the owner lists, offers, demands, or collects rent.

Request an Emergency Rent Review

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