Remarks on LA’s tragic fires and what this means for landlords in Northern California

As a preface, our hearts go out to all Los Angelans who have been uprooted and have to question the state of humanity when misguided souls are looting or literally adding fuel to the fire with blow torches to commit arson.

We also lament the widespread reports of exorbitant rent increases from opportunistic housing providers preying upon displaced people who are struggling to find new surroundings. It’s analogous to being in a desert dying of thirst; you’ll pay any dollar amount for a bottle of water.

California’s top cop, Attorney General Rob Bonta, hasn’t couched his words in expressing the disdain for landlords who precipitously raise rents in an emergency, calling it sick, wrong, immoral, and illegal.

RELATED: Bonta sends 200 warnings just days after announcing focus on wildfire fraud »

If housing providers do not take the Attorney General at his word, California's Department of Real Estate (DRE) is also poised to give landlords a bad day. We are in receipt of a stern email from the DRE saying that the agency will "diligently investigate complaints of unlawful price gouging related to rental housing by licensees and will take appropriate disciplinary action if the evidence warrants."

California is always in a perpetual state of emergency. Through a dart on the map, we will likely find a place mired in some sort of disaster. It’s a bit ironic. If it rains too much and there is a flood, a disaster is declared. But if it doesn’t rain enough and there is a drought, it results in a disaster proclamation.

Other disasters run the gamut, including riots, animal infestations or diseases, damages to bridges, or even an oil spill in the Pacific Ocean.

You can view all of Governor Newsom’s proclamations or executive orders here and they are plentiful. Barring a catastrophe on the scale of Southern California wildfires, rental housing providers may not be aware of them and so we advise housing providers to check with local authorities on what emergency declarations are in effect.

You might wonder how cattle getting infected with some sort of ailment or an airport fire in Riverside County has anything to do with permissible rent increases. We are scratching our heads, too.

Clearly, price-gouging bans make sense when there are people being exploited by merchants and housing providers. If someone’s house was burnt down to the ground and the displaced person has to pay $12,00 a month for an apartment that was listed for $3,000 before the disaster, it’s unquestionably wrong.

What state law says

The law prescribes that rents cannot be raised by more than 10 percent after a state of emergency has been declared unless the increase is directly attributable to costs on landlords.

Two notable points are worth mentioning. One, this rent increase cap applies not only to existing tenants but also to vacant units being advertised. Second, the law makes no exemptions based on the number of rental units or whether the structure is a single-family home. Certainly, the LA fires have presidential, state, and local states of emergency. 

Does the emergency cover the entire state or is it localized?

The most recent example of a statewide emergency is Avian Influenza A, commonly known as bird flu. We can't fathom what this has to do with rent increases, but it nonetheless triggered the anti-price gouging law, Penal Code Section 396, making it illegal to raise rents more than 10% above pre-emergency levels.

On January 17, 2025, this statewide emergency expired and so the rent-gouging protections triggered by this emergency are no longer in effect.

Yet there is always a local emergency somewhere. Generally speaking, local emergencies only apply to the area where the disaster occurs, but we have to understand that anti-price gouging rules may extend beyond county lines. If a tenant has been uprooted because of an act of God and they are forced to go elsewhere, they can plausibly argue that rent increase limitations apply in their new surroundings. The neighboring community, unscathed by the disaster, cannot do a precipitous rent hike to take advantage of the increased demand. It is all about optics.

We need to be aware of this spillover effect. We also need to be aware that the legal counsel representing tenants can be very inventive and when there is any scent that a rent increase is predatory, it will come back to bite landlords.

Parting thought

Ordinarily, it is advisable to consult an attorney whenever a rent increase is contemplated but with the introduction of price-gouging bans, it makes it all the more important to reach out to us before raising rents. Don’t be a penny wise and a pound foolish.