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California Governor Amends Price-Gouging Protections That Affect Self-Storage, Other Services

August 20, 2021

7 Min Read
California Governor Amends Price-Gouging Protections That Affect Self-Storage, Other Services

Update 8/20/21 – Governor Newsom this week declared a state of emergency for El Dorado County due to the Candor Fire, which has burned 6,500 acres in the state. The county is also under a consumer alert for price gouging. Eleven counties are now under these protections, according to a legislative update from the California Self Storage Association.

Two Fire Management Assistance Grants from the Federal Emergency Management Agency have been awarded to support the state’s response to the Monument Fire in Trinity County and the Dixie Fire in Lassen County. The state previously received grants to battle the River Fire and Lava Fire.

8/10/21 – Governor Newsom declared a state of emergency for three additional counties last week due to active wildfires in the state, and California Attorney General Rob Bonta issued a consumer alert about price gouging. The state of emergency is now in effect for Siskiyou County in response to the Antelope Fire, plus Nevada and Placer Counties for the River Fire, according to a legislative update from the California Self Storage Association.

The counties under a consumer alert for price gouging also include Alpine, Butte, Lassen and Plumas, which were placed under a state of emergency on July 23. Collectively, these fires have burned thousands of acres, destroyed homes and caused the evacuation of thousands of residents.

“Severe wildfires are impacting thousands of Californians and have forced evacuations. As families worry about their safety, they shouldn't have to worry about being illegally cheated, too,” Bonta said in a press release. “California law protects people impacted by an emergency from illegal price gouging on housing, gas, food and other essential supplies. If you see price gouging or if you've been the victim of it, I encourage you to immediately file a complaint with my office online at oag.ca.gov/report, or contact your local police department or sheriff’s office.”

6/15/21 – Gov. Newsom has reduced some of the pricing restrictions that were put in place during the 2020 wildfires. Limitations have concluded in some counties and will end in others in September and December, according to a June 14 newsletter distributed by the SSA to its members.

Restrictions ended on May 22 for Del Norte, Glenn, Humboldt, Lake, Madera, Mariposa, Mono, Nevada, Plumas, San Bernardino, San Diego, San Mateo, Santa Clara, Sierra, Tehama, Tuolumne, Yolo and Yuba Counties. They’ve been extended to at least Sept. 22 for Fresno, Lassen, Monterey, Santa Cruz, Shasta, Siskiyou, Solano, Trinity and Tulare Counties. Finally, restrictions dating back to the 2017-19 wildfires will remain in place until at least Dec. 31 in Butte, Los Angeles, Mendocino, Napa, Sonoma and Ventura Counties.

The state’s remaining 25 counties don’t have any pricing restrictions applicable to self-storage, according to the SSA.

The 2020 wildfire season was the state’s most destructive in history, with nearly l0,000 fires burning 4.25 million acres and destroying or damaging more than l0,000 structures, including 5,000 homes, according to the governor’s order.

1/6/21 – Gov. Newsom has extended the price-gouging restrictions that were established in 2017 due to the wildfire crisis to Dec. 31. The executive order applies to six counties: Butte, Los Angeles, Mendocino, Napa, Sonoma and Ventura. Self-storage operators in those areas may not raise their rental rates more than 10 percent above the prices that were in place prior to the emergency.

In addition, new price-gouging restrictions that were put in place last year due to the coronavirus pandemic have been extended until at least March 25. A full county-by-county breakdown is available via the California Governor’s Office of Emergency Services website.

3/10/20 – Newsom declared a state of emergency in California on March 4 in response to the outbreak of novel coronavirus, known as COVID-19. The move prompted Attorney General Xavier Becerra to issue a statement reminding products and service suppliers that price-gouging laws are now in effect until Sept. 4. The law prevents self-storage operators from raising rental rates more than 10 percent while the state of emergency is active, according to a March 9 newsletter distributed by the Self Storage Association (SSA) to its members.

As of March 4, there were 94,000 confirmed cases of COVID-19 globally, including more than 3,000 deaths. U.S. cases totaled 129 nationally, with 53 in California. More than 9,400 Californians were being home-monitored due to possible travel-based exposure to the virus, according to the governor’s declaration.

“Communities throughout our state are working to prevent and treat this public-health threat,” Becerra said. “Californians shouldn’t have to worry about being cheated while dealing with the effects of coronavirus. Our state’s price-gouging law protects people impacted by an emergency from illegal price gouging on medical supplies, food, gas and other essential supplies.”

Penalties for violating the statute include up to one year in county jail and/or a fine up to $10,000. Violators are also subject to civil-enforcement actions, including civil penalties up to $2,500 per violation, injunctive relief and mandatory restitution, according to the attorney general’s office.

The SSA has created a document summarizing laws in all 50 states and Washington, D.C., that apply to raising prices during states of emergency. All but 16 states have applicable laws. “Although few businesses would intentionally raise their rates because of a natural disaster, the laws may affect [operators’] ability to implement even standard rate increases during a state of emergency,” SSA officials said.

1/3/20 – An affiliate of self-storage real estate investment trust and third-party management firm Public Storage Inc. was charged $140,000 in penalties last month for violating California’s price-gouging restrictions in the aftermath of the October 2017 wildfires. Now governor Gavin Newsom has extended the state’s price-gouging protections for another year, which can affect the pricing of self-storage and other services in several counties.

Newsom signed an executive order on Monday extending emergency regulations that began after the North Bay fires in 2017. The order prohibits price increases of more than 10 percent until Dec. 31 in Butte, Los Angeles, Mendocino, Napa, Santa Barbara, Sonoma and Ventura Counties. It applies to rental housing, food, medical or emergency supplies, building materials, gasoline, and various repair services, according to the source.

The executive order follows Assembly Bill (AB) 1482, a rent-control bill Newsom signed in October that limits price hikes to 5 percent plus the local rate of inflation. That bill took effect on Jan. 1 and expires in 2030.

More than 250 price-gouging complaints were filed after the 2017 fires, the source reported. Sonoma County District Attorney Jill Ravitch issued a consumer alert in November to remind businesses that her office is still pursuing grievances.

Sources:
SSA Magazine Weekly 1/4/21, California Prohibits Price Gouging in Six Counties Through End of 2021
Office of Governor Gavin Newsom, Executive Order N-85-20
California Governor’s Office of Emergency Services, Price Gouging
SSA Magazine Weekly 3/9/20, California Operators: Increases Limited During State of Emergency
Office of Governor Gavin Newsom, Proclamation of a State of Emergency
California Department of Justice, Attorney General Becerra Issues Consumer Alert on Price Gouging Following Statewide Declaration of Emergency for Novel Coronavirus Cases in California Communities
The Press Democrat, California Governor Renews Protections From Price Gouging Put in Place After 2017 North Bay Wildfires
SSA Magazine Weekly 6/14/21, “Governor Newsom Narrows Pricing Restrictions in California”
California Department of Justice, Attorney General Bonta Issues Consumer Alert on Price Gouging Following State of Emergency Declarations in Siskiyou, Nevada, and Placer Counties Due to Fires
Office of Gavin Newsom, Governor Newsom Proclaims State of Emergency in Siskiyou, Nevada and Placer Counties due to Fires
Office of Gavin Newsom, Governor Newsom Proclaims State of Emergency in El Dorado County Due to Caldor Fire
 

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