Chapter 17 EMERGENCY PRICE-GOUGING PROTECTIONS

CHAPTER 17
EMERGENCY PRICE-GOUGING PROTECTIONS

Sections:

41701 Prohibitions on Price Gouging.

A. Consumer Goods. During an emergency declaration period and for sixty (60) days thereafter, it is unlawful for a person, contractor, business, or other entity to sell or offer to sell any consumer food items or goods, including but not limited to goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels, for a price of more than ten (10) percent greater than the price charged by that person for those goods or services immediately prior to the emergency declaration period. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the emergency declaration period, and the price is no more than ten (10) percent greater than the total of the cost to the seller plus the markup customarily applied by the seller for that good or service in the usual course of business immediately prior to the onset of the emergency declaration period.

B. Rental Housing. During an emergency declaration period and for sixty (60) days thereafter, it is unlawful for any person, business or other entity to increase the rental price, as defined in CMC 41702, advertised, offered, or charged for housing, to an existing or prospective tenant, by more than ten (10) percent. However, a greater rental price increase is not unlawful if that person can prove that the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than ten (10) percent, or that an increase was contractually agreed to by the tenant prior to the proclamation or declaration.

C. Transient Housing. During an emergency declaration period and for sixty (60) days thereafter, it is unlawful for any person, business or other entity to rent or lease a hotel or motel room, or other short-term or long-term rental unit, for more than ten (10) percent above the hotel’s, motel’s, or other short-term or long-term rental’s regular rates, as advertised immediately prior to the emergency declaration period, unless that person, business or other entity can prove that the increase in price is directly attributable to additional costs imposed on it for goods or labor used in the business, to seasonal adjustments in rates that are regularly scheduled, or to previously contracted rates prior to the proclamation or declaration. (Ord. 20-2006U, § 3; Ord. 20-2007, § 3)

41702 Definitions.

1. “Building materials” means lumber, construction tools, windows, and anything else used in the building or rebuilding of property.

2. “Consumer food item” means any article that is used or intended for use for food, drink, or condiment by a person or animal.

3. “Emergency declaration period” means the period of effectiveness of a state of emergency or local emergency (whichever is longer if both exist concurrently), as provided in the declaration of the state of emergency or local emergency, and as may be extended from time to time.

4. “Emergency supplies” includes, but is not limited to, water, flashlights, radios, batteries, candles, blankets, soaps, diapers, temporary shelters, tape, toiletries, plywood, nails, and hammers.

5. “Gasoline” means any fuel used to power any motor vehicle or power tool.

6. “Goods” has the same meaning as defined in subdivision (c) of Section 1689.5 of the Civil Code.

7. “Housing” means any rental housing with an initial lease term of no longer than one (1) year, including, but not limited to, a space rented in a mobile home park or campground.

8. “Local emergency” means a natural or manmade emergency resulting from an earthquake, flood, fire, riot, storm, drought, pandemic, plant or animal infestation or disease, or other natural or manmade disaster for which a local emergency has been declared by the City Council or City official vested with such authority to make such declaration.

9. “Medical supplies” includes, but is not limited to, prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products.

10. “Rental price” for housing means any of the following:

A. For housing rented within one (1) year prior to the time of the proclamation or declaration of emergency, the actual rental price paid by the tenant. For housing not rented at the time of the declaration or proclamation, but rented, or offered for rent, within one (1) year prior to the proclamation or declaration of emergency, the most recent rental price offered before the proclamation or declaration of emergency. For housing rented at the time of the proclamation or declaration of emergency but which becomes vacant while the proclamation or declaration of emergency remains in effect, the actual rental price paid by the previous tenant or the amount specified in subsection (10)(B) of this Section, whichever is greater. This amount may be increased by five (5) percent if the housing was previously rented or offered for rent unfurnished, and it is now being offered for rent fully furnished. This amount shall not be adjusted for any other good or service, including, but not limited to, gardening or utilities currently or formerly provided in connection with the lease.

B. For housing not rented and not offered for rent within one (1) year prior to the proclamation or declaration of emergency, one hundred sixty (160) percent of the fair market rent established by the United States Department of Housing and Urban Development. This amount may be increased by five (5) percent if the housing is offered for rent fully furnished. This amount shall not be adjusted for any other good or service, including, but not limited to, gardening or utilities currently or formerly provided in connection with the lease.

C. Housing advertised, offered, or charged, at a daily rate at the time of the declaration or proclamation of emergency shall be subject to the rental price described in subsection (10)(A) of this Section, if the housing continues to be advertised, offered, or charged at a daily rate. Housing advertised, offered, or charged on a daily basis at the time of the declaration or proclamation of emergency shall be subject to the rental price in subsection (10)(B) of this Section, if the housing is advertised, offered, or charged, on a periodic lease agreement after the declaration or proclamation of emergency.

D. For mobile home spaces rented to existing tenants at the time of the proclamation or declaration of emergency which are subject to rent control pursuant to Chapter 7 of this Article, the amount authorized under that Chapter, and for new tenants who enter into a rental agreement for a mobile home space that is subject to rent control, but not rented at the time of the proclamation or declaration of emergency, the amount of rent last charged for a space in the same mobile home park. However, no rent increase shall be granted for any mobile home space that is subject to rent control pursuant to Chapter 7 of this Article except in accordance with that Chapter. For mobile home spaces not subject to rent control and not rented at the time of the proclamation or declaration of emergency, the amount of rent last charged for the space.

11. “State of emergency” means a natural or manmade emergency resulting from an earthquake, flood, fire, riot, storm, drought, pandemic, plant or animal infestation or disease, or other natural or manmade disaster for which a state of emergency has been declared by the President of the United States or the Governor of the State of California.

12. “Transportation, freight, and storage services” means any service that is performed by any company that contracts to move, store, or transport personal or business property or that rents equipment for those purposes, including towing services. (Ord. 20-2006U, § 3; Ord. 20-2007, § 3)

41703 Penalties for Violations.

Any person violating any of the provisions of this chapter shall be subject to a penalty of $10,000 for a first-time violation, and thereafter $10,000 for each additional violation. A violation of any provision of this chapter is also punishable as a misdemeanor pursuant to CMC 1200, and constitutes a basis for the City’s Finance Director to suspend or revoke the violator’s City business license, if any, pursuant to CMC 6383. (Ord. 20-2006U, § 3; Ord. 20-2007, § 3)