Steve Welty

Issue# 81

January 2026

Happy Saturday, Housing Heroes!

We hope you had a chance to recharge over the holidays and ease into 2026. We’re kicking off the year with an important (and easy-to-miss) update for housing providers across Southern California. It’s one of those rules that doesn’t always make headlines, but can quietly affect rent increases, renewals, and listings if you’re not watching closely.

A Temporary 10% Rent Cap Is Back

In late December, Governor Newsom declared a state of emergency tied to severe winter storms. That declaration covered Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Shasta counties.

When a state of emergency is declared in California, one thing happens automatically: the state’s anti-price-gouging law is triggered. There’s no separate vote, no additional notice, and no grace period.

The practical impact is straightforward:

During the emergency period, rent and advertised rent generally cannot increase more than 10% above what was charged immediately before the declaration.

According to guidance from Cal OES, these storm-related rent-gouging protections are currently listed as running through June 22, 2026, unless lifted or extended again.

Why This Keeps Catching Owners Off Guard

This isn’t new - but it’s becoming more common.

In California, the sequence is familiar:

A natural event occurs.
A state of emergency is declared.
Penal Code Section 396 automatically kicks in, placing a temporary 10% cap on rent increases.

What makes this moment especially frustrating is the contrast. On the same day rent caps were lifted in parts of Wine Country after years of recovery from fires, new caps went into effect elsewhere because of heavy rainfall.

Too little rain? Emergency.
Too much rain? Also an emergency.
Either way, rent caps follow.

As California Apartment Association CEO Tom Bannon has noted, these emergency caps can leave owners “frozen in time,” unable to keep pace with rising costs like insurance, taxes, maintenance, and utilities costs that have little to do with the emergency itself.

The Details Matter More Than You Think

The biggest risks tend to come from how the 10% cap is calculated.

The law looks backward, not forward:

If a unit was rented or advertised within one year prior to the emergency, that amount becomes the base rent.
If the unit was vacant, you still need to identify what it was last offered for during that period.
If the unit was previously rent-controlled and vacant, you typically cannot reset to market rent during the emergency.
In certain cases, rents may be capped at 160% of HUD fair market rent.

None of this is intuitive and small missteps can turn into bigger issues later.

What About Evictions?

Landlords can still terminate tenancies where legally allowed. However, evicting a tenant in order to re-rent at a higher price that exceeds the emergency cap is not permitted.

Even when an eviction itself is lawful, the re-rental price still matters and improper pricing can undermine an otherwise valid action.

How to Stay Protected as a Landlord

With emergency declarations becoming more frequent, the safest approach right now is a conservative one:

Assume the 10% cap applies in the affected counties
Double-check all rent increases, renewals, and new listings
Be especially careful with vacant units and turnover pricing
When in doubt, pause and confirm before issuing notices

Emergency declarations may come and go, but improper rent increases tend to linger far longer than expected.

Thanks again for being part of the Housing Heroes community. Staying informedeven when the rules feel frustrating is still the best defense.

Enjoy the rest of your weekend, and we’ll see you next Saturday.

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