This is a companion update to our initial article on price gouging protections, “Navigating Fair Market Rent Calculations During California’s Price Gouging Protections,” initially published January 27, 2025. Click here to review the initial article (and/or view the video) and use this update in conjunction with the original article.
UPDATE: February 2025 Executive Order on Price Gouging Protections
On February 4, 2025, Governor Gavin Newsom issued Executive Order N-17-25, which modifies California’s price gouging protections in response to the devastating fires in Los Angeles and Ventura Counties. Key updates affecting rental housing include:
Expansion of Housing Protections – The definition of “housing” under Penal Code Section 396(j)(10), which previously applied only to rental housing with an initial lease term of no longer than one year, has been suspended. This means all rental housing, regardless of lease term length, is now subject to price gouging restrictions until further notice. This is a significant change as many landlords were opting to offer leases in excess of one year to avoid these protections, which is no longer the case.
Exemption for High-Value Single-Family Homes – Price gouging restrictions under Penal Code 396(e) and (j)(11)(B) (which pertains to use of the HUD calculations) have been suspended until March 8, 2025, for single-family homes with four or more bedrooms in select high-rent ZIP codes where the HUD Small Area Fair Market Rent (SAFMR) for four-bedroom units is at least $5,500. Affected ZIP codes and their respective areas include:
- 90015 – Los Angeles (Downtown, South Park)
- 90049 – Los Angeles (Brentwood)
- 90067 – Los Angeles (Century City)
- 90077 – Los Angeles (Bel Air)
- 90094 – Los Angeles (Playa Vista)
- 90210 – Beverly Hills
- 90263 – Malibu (Pepperdine University area)
- 90265 – Malibu
- 90266 – Manhattan Beach
- 90272 – Pacific Palisades
- 90274 – Palos Verdes Estates, Rolling Hills Estates
- 90275 – Rancho Palos Verdes
- 90290 – Topanga
- 90291 – Venice
- 90292 – Marina del Rey
- 90703 – Cerritos
- 91011 – La Cañada Flintridge
- 91105 – Pasadena
- 91210 – Glendale
- 91301 – Agoura Hills
- 91302 – Calabasas
- 91307 – West Hills
- 91354 – Valencia
- 91364 – Woodland Hills
- 91436 – Encino
- 91709 – Chino Hills
- 91789 – Walnut
Notably, this does NOT include any areas in Orange County, thus Newport Beach, Corona del Mar, Costa Mesa and other areas remain subject to the HUD calculations where appropriate.
Recall, the HUD calculations only come into effect if the property has not been listed for rent, or rented, in the prior year. Review our in depth original article here.
These updates expand the scope of price gouging protections for most rental housing while creating temporary exceptions for high-value rental properties in certain areas. Landlords and property managers in Newport Beach, Costa Mesa, and across Orange County should be mindful of these adjustments when setting rental rates.
Lucas Real Estate: Experts in Navigating Rental Laws
At Lucas Real Estate, we specialize in helping landlords in Newport Beach, Costa Mesa, and beyond navigate the complexities of property management during challenging times. Our deep understanding of California rental laws and HUD policies ensures that our clients remain compliant while maximizing their investments.
When disasters strike, we’re here to guide you through pricing strategies, legal compliance, and tenant communications with clarity and professionalism.
If you’re uncertain about which rent benchmarks to use during price gouging protections, reach out to us today. Together, we can ensure your rental business operates fairly and effectively, even in the most trying circumstances.
Contact Lucas Real Estate Today
Lucas Real estate specializes in assisting property owners and Trustees with real property. Devin Lucas is Real Estate Broker, Real Estate Attorney, and REALTOR®, Courtney Lucas is a CPA and REALTOR®. Together, they are experts in California Real Estate sales, capital gains issues, property tax matters including Propositions 13, 58, 193, 60, 90 and new Proposition 19 and property management.
If you’re preparing to sell, lease or manage real property in Newport Beach, Costa Mesa, or nearby communities like Huntington Beach or Laguna Beach, trust Lucas Real Estate to handle your transaction with precision and professionalism. From understanding key landlord tenant requirements, to taxation issues, to disclosure exemptions to fulfilling your obligations, we ensure a smooth and compliant sale.
For more insights and professional real estate services in Newport Beach, Costa Mesa, and the coastal areas of Orange County, contact Lucas Real Estate today. Let us guide you through your next property transaction with confidence and clarity.
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Author Devin R. Lucas is Real Estate Professional – a Real Estate Broker, Real Estate Attorney, and REALTOR® – specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individuals and Trustees in residential real estate.
Lucas Real Estate – Attorney Devin Lucas and CPA Courtney Lucas – are experts in California Real Estate sales, capital gains issues and property tax matters including Propositions 13, 58, 193, 60, 90 and new Proposition 19.
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Sources:
- Governor’s Order: https://www.gov.ca.gov/wp-content/uploads/2025/02/EO-N-17-25.pdf
- LA Times: https://www.latimes.com/homeless-housing/story/2025-02-04/gov-newsom-lifts-price-caps-for-new-rental-homes-in-wealthy-l-a-neighborhoods
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