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CA lawmakers consider ending disaster price-gouging protections as high prices squeeze Californians

In the last several years, California has experienced devastating wildfires, extreme drought, a deadly pandemic, and the worst methane leak in U.S. history, among other emergencies. Unfortunately, some California landlords see opportunity in disaster. For example, after the 2015 methane leak in Aliso Canyon, landlords charged victims up to $9000 for temporary shelter. After the 2017 North Bay fires, landlords increased rents for victims by up to 36%.

Disasters aren’t new for California, but against the state’s worsening housing crisis, the importance of accessible, stable housing after disaster is clear.

The passage of AB 2820 and AB 1919 in California was meant to stop blatantly predatory conduct after disaster and strengthen protections for victims of price gouging in emergencies. Now, a few years and natural disasters later, those protections are under attack via a bill currently moving through the state legislature, SB 1133 (Archuleta). SB 1133 will undo decades of price gouging protections for Californians at a time when the state is reeling from both natural and man-made disasters and gives a green light to unscrupulous landlords to prey upon victims of emergencies by increasing rents above the allowable 10% during declarations of emergency. California can’t afford for SB 1133 to become law.

SB 1133 seeks to eliminate housing from the anti-price gouging protections in Penal Code Section 396, which is a provision of law used by advocates across the state to prevent excessive rent increases for disaster victims. When I was a tenant attorney in Los Angeles, I once relied on those anti-price gouging protections for housing to prevent unjustified and excessive rent increases for a building full of elders after a corporate landlord purchased their building. When the building sold, the new owner quickly increased rents by over 60% for everyone there, many of whom were disabled elders and all of whom already spent between 30%-40% of their limited fixed incomes on rent. The rent increases would have forced them out of their homes — the only law that kept them housed was the anti-price gouging protections for housing in PC Section 396.

Proponents of SB 1133 claim that businesses are unfairly subject to unjust punishment because of PC Section 396. However, landlords who price gouge are hardly prosecuted under this section. For example, landlords increased rent by up to 36% after the 2017 North Bay fires, which scorched more than 200,000 acres of land and forced 90,000 people to evacuate their homes. Even though the Sonoma County District attorney’s office investigated over 220 complaints of price gouging, they only filed four criminal cases against the most egregious actors, and the Attorney General only filed one criminal case. Meanwhile, people were forced to live among the toxic smoke of their burnt homes because they couldn’t afford a home to rent. SB 1133 isn’t about addressing unjust prosecution; it’s about money and creating opportunity for profit, even when the opportunity is people in need of housing after they’ve lost theirs.

Additionally, the bill’s sponsor (the California Apartment Association, a landlord lobbying group) and author say SB 1133 is necessary to increase transparency for businesses that get confused about compliance during a declaration of emergency, even though businesses have resources available at the local and state levels to determine if a proclamation of emergency is in effect. SB 1133 is not about ensuring businesses are less “confused” about emergency proclamations – that’s already in the law.

We know surviving a disaster adversely impacts individuals and communities. Studies show that long after disaster, individuals experience post-traumatic stress due to housing loss, increased health conditions like stroke, heart disease, and lifelong chronic illnesses, and increased homelessness – all of which disproportionately impact people of color.  These individual impacts coalesce to impact whole communities.

The devastating community impact after the 2018 Camp Fire — the most destructive in California history — is still felt today. The Camp Fire displaced over 80% of Paradise’s population and destroyed 90% of housing. Consequently, people were forced into neighboring communities like Chico that didn’t have the capacity to house them. At that moment, some Chico landlords increased rents by 15%, creating an immoral bidding war among survivors who were sleeping in garages, tents, and shelters. Years after the Camp Fire, communities in Paradise and the surrounding areas have seen increased housing instability and homelessness. If passed, SB1133 would allow corporations and unscrupulous landlords to capitalize on the needs of people like those who survived the Camp Fire when they are trying to survive.

You might think a bill with this much impact would receive special consideration by legislators – particularly those representing districts with victims of past and future disaster. Not only was there very little discussion about the devastating yet highly predictable potential impacts of SB 1133, the bill also passed out of its legislative policy committee with a majority vote.

But the legislature is still in session, and there is time to stop the bill. SB 1133 is currently in the California Assembly’s Appropriations Committee awaiting an August hearing date, where we will demand elected representatives vote against greed and protect displaced Californians.

Help stop price gouging after disaster. Call your state legislator and demand a NO vote on SB 1133.