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Extended California Price-Gouging Protections Could Affect Self-Storage, Other Services

Update 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 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

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