California lawmakers will soon resume consideration of two bills that could significantly expand the state’s emergency price gouging law, with potential implications for rental housing providers across the state. Both proposals would amend the same section of California law governing emergency rent caps, potentially increasing the situations in which landlords must comply with the state’s 10% pricing limit.
The bills are among the final pieces of housing legislation expected to move through the Legislature before the end of the 2026 session, making the coming weeks especially important for multifamily owners and investors.
Emergency Rent Cap Could Apply to More Rental Agreements
California’s emergency price gouging law, found in Penal Code Section 396, limits rent increases to no more than 10% above pre-emergency levels after a state or local emergency declaration. The law also applies to many goods and services during emergencies, and violations can carry criminal penalties.
One proposal, SB 1365, would remove the current exemption for residential leases longer than one year. If enacted, long-term leases would become subject to the same emergency rent restrictions that currently apply to shorter-term rental agreements during declared emergencies.
Supporters of the bill argue the change would strengthen consumer protections. However, business organizations contend it would add another layer of regulation on top of existing statewide rent caps under AB 1482 and local rent stabilization ordinances, while also increasing compliance risks for housing providers.
Additional Enforcement Authority Included
Beyond changes to emergency rent caps, SB 1365 would also expand enforcement authority by allowing city attorneys in California cities with populations exceeding 900,000 to bring claims under the state’s Cartwright Act. Currently, that authority is generally reserved for the attorney general and district attorneys.
According to supporters, the expanded authority could help local governments address alleged anti-competitive real estate practices, including property acquisition efforts in areas affected by recent natural disasters.
Second Bill Would Expand What Qualifies as an Emergency
A separate proposal, SB 493, would broaden the types of events that can activate California’s emergency price gouging protections.
Rather than limiting the statute to traditional emergencies such as fires, floods, or other disasters, the bill would add periods of war as a qualifying trigger. Under the latest version of the legislation, the definition would include:
- A formal declaration of war by Congress.
- Active U.S. military operations against a foreign power, with or without a declaration of war.
- U.S. participation in military operations supporting United Nations forces.
Opponents argue that overseas military conflicts do not create the same immediate supply disruptions in California as natural disasters and question whether expanding emergency pricing restrictions to international events is appropriate.
Legislative Timeline
Both bills are currently awaiting consideration in the Assembly Appropriations Committee, which must act by Aug. 14 for the measures to continue advancing this legislative session.
If approved, each proposal would still require passage by both the Assembly and Senate before reaching the governor’s desk. The Legislature faces an Aug. 31 deadline to send bills to the governor, who has until Sept. 30 to sign or veto them.
For multifamily investors and housing providers, these proposals underscore the importance of staying informed as California’s regulatory landscape continues to evolve. Monitoring legislative developments early allows owners to evaluate potential impacts, update compliance strategies, and make well-informed operational decisions before any new requirements take effect.
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