UPDATE: March 7 2025 Executive Order Further Extends Price Gouging Protections

March 9, 2025
devinlucas

Governor Gavin Newsom’s Executive Order N-23-25, issued on March 7, 2025, extends and modifies price gouging protections related to rental housing and emergency housing relief until July 1, 2025. While these measures primarily target rental housing, they have major implications for real estate sales, leasing, and property management—particularly in high-demand areas like Los Angeles and Orange County.

Here’s what landlords, property managers, and real estate professionals in Newport Beach, Costa Mesa, and beyond need to know about these new rules.

Key Impacts on Leasing & Property Management

1. Price Gouging Protections Extended Until July 1, 2025

The 10% cap on rental increases remains in effect for all rental housing, hotels, and motels in Los Angeles County.
Landlords cannot evict a tenant solely to re-list the unit at a higher price—a crucial restriction for property managers to monitor.
Newport Beach, Costa Mesa, and all of Orange County remain fully subject to these protections.

2. Lease Term Restrictions Suspended – Now Applies to ALL Rentals

Previously, only leases of one year or less were subject to price gouging restrictions.
Now, ALL rental housing—regardless of lease length—is covered under Penal Code Section 396.
Key takeaway: Landlords cannot bypass price gouging laws by offering leases longer than one year—all lease terms are now regulated.

3. Exemptions for Certain Properties – Limited to HUD Fair Market Rent Rules Only

Some properties are not required to use HUD Small Area Fair Market Rents (SAFMRs) for price gouging calculations, but they are still subject to other rental restrictions.

Who Qualifies for the HUD FMR Exemption?
– Newly constructed multifamily and single-family homes (issued a certificate of occupancy on or after January 1, 2025).
– High-value single-family homes (4+ bedrooms) in select Los Angeles ZIP codes with HUD Small Area Fair Market Rents (SAFMR) of $5,500+ for 4-bedroom units.

ZIP Codes Exempt from Price Gouging Protections

ZIP Code	City/Area
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

What This Exemption Means (and What It DOESN’T Mean)

These properties do NOT have to use HUD Fair Market Rent (FMR) figures to calculate the base rent.
⛔ However, they are still subject to the general 10% rent increase cap.
⛔ Landlords CANNOT raise rent above the pre-existing rate if the property was previously leased or advertised in the last year.
⛔ The exemption does NOT allow landlords to evict tenants in order to list at a higher price.

This means that if a property was not previously leased or advertised for rent in the last year, the landlord is free to set the rent without using HUD’s rental benchmarks. However, once rented, it still falls under the 10% cap on increases

Key Considerations for Exempt Properties

Only applies to single-family homes with four or more bedrooms.
If the property has been rented or listed in the past year, the exemption does NOT apply.
Orange County properties are NOT included in this exemption—landlords in Newport Beach, Costa Mesa, and surrounding areas must comply with all price gouging restrictions.

4. Hotels & Short-Term Housing Regulations Extended

Protections against reclassifying hotel/motel stays as “tenancies” after 30 days are extended.
Property managers overseeing short-term rentals or extended stay hotels should be mindful of occupancy tax obligations and tenant rights laws when housing displaced residents.

Key Takeaways for Landlords & Property Managers in Newport Beach & Costa Mesa

ALL rental housing is subject to price gouging rules until July 1, 2025, regardless of lease length.
The 10% rent cap remains in place.
Landlords cannot evict tenants solely to re-list at a higher rate.
Orange County properties DO NOT qualify for exemptions available in certain LA neighborhoods.
Newly constructed properties (post-Jan 2025) are exempt, creating investment opportunities.

Lucas Real Estate: Your Partner in Compliance & Strategy

Navigating California’s rapidly changing real estate regulations can be complex, but Lucas Real Estate is here to help. Whether you’re a landlord, investor, or property manager, we provide expert guidance to ensure compliance while maximizing your returns.

📞 Need Guidance? Contact Lucas Real Estate today to discuss your leasing strategies, property sales, or investment opportunities in Newport Beach, Costa Mesa, and beyond.

Contact us anytime via phone (949-478-1623) or email ([email protected])

– Devin Lucas

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.

To discuss selling or professionally managing your home:
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Sources:

California Penal Code section 396.
Governor’s Office: https://www.gov.ca.gov/2025/03/07/governor-newsom-extends-protections-for-la-firestorm-survivors
Governor’s Emergency Order: https://www.gov.ca.gov/wp-content/uploads/2025/03/Extension-of-Housing-Protections-EO-N-23-25-_GGN-signed.pdf

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