Rent gouging in post-emergency Sonoma may be on DA’s list

Even for those community members who did not lose their homes in the recent fires, the impacts were multiple: in many cases evacuation, health risk from smoke, loss of work or school days, and lingering anxiety and uncertainty. Adding to all this, for some, was threat of losing their homes to eviction, and being faced with sky-high rental increases that responded to increased demand for limited housing resources.

But according to the Sonoma County District Attorney, spiking rents to take advantage of a disaster is a violation of state law, even Sonoma may not be immune to allegations of such indiscretions.

According to one complaint the DA is said to be looking into, on Oct. 31 at least two residents of an East Sonoma apartment complex received 60 Day Notice to Vacate warnings, with no way to respond to the notice as their normal rental manager’s phone had been disconnected. Online rental services appeared to show newly advertised rates for one of the apartments that was almost 60 percent higher than the rent the tenants had been paying.

Another Sonoma rental property owned by the same company also showed dramatically increased rental rates in online listings, more than double the rates previously published. Screen shots of the revised rental listings were provided to the DA’s office when the evictions were reported, though the rental listings were later withdrawn.

Such increases raised concerns with the District Attorney over illegal price gouging, which is in violation of Section 396 of the California Penal Code. That prohibits the raising the price of consumer goods and services by more than 10 percent following a declared state of emergency. Though the City of Sonoma shied away from such a declaration, the county, state and the federal governments all took that step, triggering the special protections under the law.

The evictions and high rental increases reported to the DA were among many such complaints being investigated by District Attorney Jill Ravitch’s office. Ravitch told the Press Democrat that more than 60 reports of potential rental price gouging had been received, and said her staff is “aggressively pursuing evidence” on the cases that have not been cleared.

“We haven’t filed a case on any of the allegations we’ve received,” said Chief Deputy District Attorney Brian Staebell, but he confirmed that “a number of cases are under investigation.” Multiple sources confirm the Sonoma rent gouging incident is among them.

In Santa Rosa – faced with disastrous loss of hosing in Fountaingrove and Coffey Park – the City Council in October passed an emergency law limiting rent increases to 10 percent above the cost charged before the fires, and applied that 10 percent rule to hotels and vacation rentals as well.

Sonoma has taken no such steps, and aside from controlled increases in mobile home parks has no rent control policies in place. But the City Council may take up a number of issues related to housing in response to the disaster at their meeting on Monday, Nov. 20, according to City Planning Director David Goodison.

While PC Section 396 applies only to a 30-day period following a declared emergency, Gov. Jerry Brown issued an executive order on Oct. 18 that waived the 30-day period, extending price gouging controls an additional five months, to April 18, 2018.

Not all rent increases, even in the wake of a disaster, necessarily violate Section 396. For instance it applies only to previously-rented units, not to those that come on the market after a fire. A homeowner may choose to move out of his or her own home and rent it out at a high rate, but since it hasn’t been on the market as a rental this is not illegal, according to a statement from Ravitch.

It’s not just rental price gouging that’s illegal, and the DA’s office may be investigating other forms of gouging as well. Over-charging on food, emergency and medical supplies, building materials and gasoline are also covered, as are repair or reconstruction services, transportation and storage.

Violators of the price gouging statute are subject to criminal prosecution that can result in a one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $5,000 per violation, injunctive relief and mandatory restitution.

Contact Christian at christian.kallen@sonomanews.com.