What is rent gouging?

Rent gouging is the predatory practice of landlords exploiting tenants by demanding inflated rent prices. Legally, it occurs when landlords raise rents beyond the allowed limit during a declared State of Emergency. Since January 7, 2025, LA County has been under such a declaration, which prohibits landlords from increasing rents by more than 10% of their pre-listed price as of one year before. Specific rules also apply to new listings and short-term rentals (STRs). 

Which law prohibits rent gouging?

Rent gouging during a state of emergency is prohibited under Penal Code Section 396, which bans landlords from drastically inflating rents and exploiting tenants in crisis. The law applies to all types of rentals, including single-family homes, apartments, condos, and short-term rentals (STRs). 

How does the law apply to different types of rentals? 

Previously listed rentals: Rent increases cannot exceed 10% of the most recent price advertised or charged in the year before the emergency.

Newly listed rentals or relisted rentals: For rentals not listed for rent since before January 7, 2024, the price cannot exceed 160% of the Fair Market Rent (FMR) for the ZIP code. Find the FMR for your area on the HUD website.

Short-term rental platforms like Airbnb and VRBO and hotels/motels: 

• Daily rental rates cannot increase by more than 10%

• If a short-term rental converts to a monthly or long-term rental after the emergency declaration, the rent cannot exceed 160% of the FMR set by HUD

• Rent increases cannot exceed 10% of the most recent price advertised or charged in the year before the emergency

What if the rental is furnished?

If furniture is added to a rental that was previously unfurnished, landlords may increase the price by up to an additional 5% above the 10% limit—but no more. This applies to both short-term and long-term rentals.

What practices are prohibited under the rent gouging law?

Justifying illegal rent increases by adding services like cleaning or utilities

• Charging higher rents because an insurance company is paying

• Accepting an illegally high amount of rent even if a tenant offers to pay the higher amount (no bidding wars)

How long are the protections in effect?

Rent gouging protections remain in place until January 7, 2026, per Governor Newsom’s Executive Order N-4-25.

What are the penalties for rent gouging?

According to the law: 

• Fines of up to $10,000

• Up to one year in jail