California governor renews protections from price gouging put in place after 2017 North Bay wildfires

Restrictions on rent increases will remain in place for another year in Sonoma County after Gov. Gavin Newsom on Monday extended price-gouging protections for communities that have been affected by destructive wildfires.

The governor signed an executive order that extends an emergency regulation that began after the North Bay fires in 2017, prohibiting price increases by more than 10%, most notably on rental housing.

The order also applies to food, medical or emergency supplies, building materials, gasoline and various repair services, and the extension will keep it in place until Dec. 31, 2020.

“Many rebuilding permits have not yet been submitted, much less approved,” the executive order read. “In some instances local law enforcement agencies have had to resolve criminal liability relating to price-gouging activity.”

Monday’s action also applies to Mendocino, Napa, Butte, Los Angeles, Santa Barbara and Ventura counties.

The consumer protection has now been renewed five times, most recently in May, and was set to expire Dec. 31. Sonoma County has been included with each continuation, which means rent prices have been consistently capped at a 10% increase for over two years.

Fair housing advocates celebrated the announcement as a victory for renters, especially those in subsidized housing units that were facing a potential rent hike in 2020.

Housing attorney Evan Livingstone of Santa Rosa said low-income units built using federal dollars are priced using the area median income, which in Sonoma County is $86,400 for a household of four. If Newsom had not renewed the protection this week, those residents could have seen a significant rent increase in the New Year.

“I am thrilled,” Livingstone said. “(Rent) will continue to be frozen for these folks who are on fixed income and have low-income tax credit housing. That’s really good news for them.”

Jeff Collaso, owner of ?NorthBay Property Management, said landlords have steadily learned how to work under this regulatory framework, and price-gouging regulations have been in place so long now that they have slowly put a cap on value.

Many property owners have opted for regular, incremental increases so that over time their returns are closer to the market value of their property, he said, but still keep the relationship with a good tenant intact.

“As the fires continue, it’s becoming part of normal life,” Collaso said. “It’s becoming how you deal with investment properties.”

The executive order this week dovetails with the implementation of Assembly Bill 1482, a rent control bill Newsom signed in October that limits price hikes to 5% plus the local rate of inflation, unless there is a local ordinance in place that sets a different standard. It takes effect Jan. 1, and will expire in 2030.

Santa Rosa adopted a local ordinance last year that applied to all types of dwelling units, but earlier this month the City Council voted to let it expire in January after the state law goes into effect.

More than 250 price-gouging complaints were lodged in the aftermath of the 2017 fires, and by May 2018, charges were brought against at least five landlords across the North Bay.

Sonoma County District Attorney Jill Ravitch issued a consumer alert last month to remind businesses, including hotels and landlords, that her office is still actively pursuing any complaints it receives.

Shortly after the alert, her office announced a $140,000 penalty against PS Orangeco Inc., the company that owns Public Storage. According to a news release, the self-storage company allegedly charged more than 10% for its units after the North Bay fires than it did immediately before they broke out.

You can reach Staff Writer Yousef Baig at 707-521-5390 or yousef.baig@pressdemocrat.com. On Twitter @YousefBaig.