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As State Price Gouging Rule Nears End, County, Santa Rosa Consider Options

Nov 20, 2018
by Will Carruthers

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Two weeks before the expiration of an executive order meant to prevent price gouging in the wake of the 2017 North Bay wildfires, Sonoma County's top disaster recovery official says the county is ready to pass a local extension if the governor doesn't extend the state protection first.

Michael Gossman, director of the county’s Office of Recovery and Resiliency, said that county officials and state politicians have asked Governor Jerry Brown to extend an executive order protecting fire-effected counties from price gouging that is set to expire on Tuesday, Dec. 4.

“The County is aware [of the deadline] and stands ready to act,” Gossman said on Tuesday.   

Under the state order, businesses and landlords are barred from raising the price of labor, goods and materials more than 10 percent higher than the rate they charged before the fires. In Sonoma County, where rental rates have skyrocketed in recent years and 40 percent of county residents rent, many have been worried about sudden rent increases when the state order comes to an end. 

U.S. Representative Mike Thompson and Senator Jared Huffman have sent letters to Brown asking for an extension. Napa, Lake, Mendocino and Sonoma counties will send a joint letter to the governor in the coming days, Gossman said.

If the outgoing governor does not extend the state rule, the Board of Supervisors will consider a local alternative covering all homes within Sonoma County, both inside city limits and in unincorporated areas. 

County officials would prefer for the state to extend its ordinance because a county alternative could cause confusion for local landlords and renters, and would be split by county lines, rather than covering the entire region affected by the fires.

The California Attorney General’s office wrote recently that the state price gouging rule can extend to nearby counties not directly named in the executive order.

“For example, if a fire in San Diego County causes residents to evacuate to neighboring Imperial County, hotels in Imperial County may not raise rates by more than 10 percent to take advantage of the increase in demand for lodging,” the Attorney General's office wrote. 

“We really want to see an extension from the Governor,” Gossman said, “But if we took the extension to the board, I’m confident that it would pass.”

If Brown doesn't extend the order, the Board of Supervisors would vote on a county extension at its Tuesday, Dec. 4 meeting, according to Gossman.

On Nov. 8, Brown signed executive order banning price gouging in Butte, Los Angeles and Ventura counties until Nov. 8, 2019.

SANTA ROSA CONSIDERS LOCAL ALTERNATIVE

Meanwhile, the Santa Rosa City Council will consider legislation to protect renters within city limits from rent gouging at its meeting on Tuesday, Nov. 27. 

“City officials have been alerted to the possibility of continuing price gouging by persons offering housing for rent in the City of Santa Rosa, and have been informed that price gouging may also include eviction of existing tenants of rental properties so landlords may evade price gouging restrictions,” the ordinance states.

If the city ordinance is passed, it would stay in effect “as long as the City remains under a local declaration of emergency due to the wildfires of October 2017.”

An ordinance passed by the Santa Rosa City Council on Oct. 24, 2017, bared landlords from raising rental prices more than ten percent above the prices immediately before the ordinance was passed.

The same ordinance also bars landlords from evicting existing tenants and renting the same unit for more than 10 percent more than they did immediately before the fires.

Beatrice Camacho, an organizer with the North Bay Organizing Project and the Sonoma County Tenants Union, announced plans to advocate for the measure at the City Council’s meeting.

“We need to ensure that the 10 percent rent cap will be extended, otherwise we will start experiencing price gouging again and we will, at a faster rate, continue to see our community pushed out of the city due to an inability to afford to live here,” Camacho said at a meeting on Monday night.

LOCAL LANDLORDS CHARGED

By April, the county District Attorney's office had investigated over 220 price-gouging complaints in the county, according to a press release. The Sonoma County District Attorney's office and state Attorney General Xavier Becerra filed cases of rental price gouging against local landlords.

If the price gouging law is extended local and state law enforcement could continue to prosecute price gouging cases.

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