California SB 1365

Under existing law, upon the proclamation of a state of emergency by the President of the United States or the Governor, or upon the declaration of a local emergency by the executive officer of any county, city, or city and county, and for 30 days following the proclamation or declaration of emergency, it is price gouging, a misdemeanor, for any person, business, or other entity, to increase the rental price advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10%. Existing law exempts an increase from these provisions if the person can prove that the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than 10%. This bill would instead make it an affirmative defense to charge of price gouging pursuant to that provision if an increase was directly attributable to additional costs for repairs or additions beyond normal maintenance incurred within the year prior to the proclamation or declaration and either the housing was rented, advertised for rent, or offered for rent at the time the costs were incurred or the person can prove that within a year before the proclamation or declaration, the intent to offer the housing for rent within 6 months of the repair or addition already existed. Existing law also makes the imposition of various other price increases upon the proclamation of a state of emergency by the President of the United States or the Governor, or upon the declaration of a local emergency by the executive officer of any county, city, or city and county, and for 30 days following the proclamation or declaration of emergency, price gouging. Existing law exempts certain price increases from these provisions. This bill would instead frame those exemptions as affirmative defenses. Existing law defines housing for these purposes as any rental housing with an initial lease term of no longer than one year. This bill would expand the definition of "housing" to include any rental housing without regard to the length of the initial lease term. Existing law defines the rental price of housing advertised, offered, or charged at a daily rate at the time of the proclamation or declaration of emergency that is advertised, offered, or charged on a periodic lease agreement after the declaration or proclamation of emergency as being 160% of the fair market rent established by the United States Department of Housing and Urban Development, which may be increased by 5% if the housing is offered for rent fully furnished. This bill would define the rental price of housing advertised, offered, or charged at a daily rate following a declaration or proclamation of emergency, but that was not advertised, offered, or charged at a daily rate in the year prior to the declaration or proclamation of emergency as being 130 of the amount above. This bill would incorporate additional changes to Section 396 of the Penal Code proposed by SB 493 to be operative only if this bill and SB 493 are enacted and this bill is enacted last. By expanding the scope of a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.