The city council finds as follows:
A. Beginning on the morning of November 8, 2018, a series of wildfire events, identified as the Camp Fire burned over 125,000 acres in the County of Butte and surrounding areas and damaged or destroyed over 6,500 homes and 260 commercial structures where the majority were within the boundaries of the Town of Paradise; and
B. On November 9, 2018, the Governor of California proclaimed a State of Emergency for Butte County and on November 12, 2018, the President of the United States declared the existence of a major disaster in the State of California and ordered Federal aid to supplement State and local recovery efforts in the areas affected by wildfire; and
C. California Penal Code Section 396 controls price increases for rental housing, goods and services related to emergency response and recovery for an initial period of thirty (30) days after declaration of an emergency by the President, Governor or local agency, and generally prohibits charging a price that exceeds by more than ten percent (10%) the price of the rental units, goods or services as such existed before the declaration of an emergency event. Penal Code Section 396 permits a local legislative body to extend the price controls for additional thirty (30) day periods as needed to protect the lives, property or welfare of its citizens. Nothing in Penal Code Section 396 preempts a city's ability to prohibit the same or similar conduct and allows a city to impose a more severe penalty for the conduct prohibited by Penal Code Section 396. Penal Code Section 396 applies to hotels, motels and any other rental housing restricting set rates and lease to what was advertised immediately prior to the emergency declaration; and
D. The Council has previously found that the City of Chico is experiencing a housing crisis, and a severe lack of rental housing, particularly rental housing that is affordable to lower and moderate-income residents; and
E. The housing units damaged and destroyed by an emergency increase the rental housing shortage further impairing the ability of persons who live and work in the City of Chico to find housing or residents who have been displaced by an emergency to relocate to other housing in Chico; and
F. City officials have been alerted to the possibility of price gouging by persons offering housing for rent, goods and services in the City of Chico, and have been informed that price gouging may also include eviction of existing tenants of rental properties, so landlords may take advantage of victims of emergencies whose insurance companies may pay rental rates in excess of what was previously charged for existing tenants; and
G. While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions, when a declared state of emergency or local emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited, the events of the Camp Fire and other states of emergency highlight the need for the City of Chico to establish local regulations relating to price gouging during times of emergencies to protect residents from excessive and unjustified increases in the prices charged during or shortly after a declared state of emergency or local emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers; and
H. The City Council hereby finds that this Ordinance is necessary for preservation of the public peace, health or safety based upon the findings contained herein.
I. The City Council intends to extend the applicability of this Ordinance until December 31, 2020, or until such later date as established by a declaration of a state of emergency regarding the Camp Fire.
(Ord. 2522 §2 (part), Ord. 2527 §1 (part); Ord. 2542 §1)
A. Rental Housing. It is unlawful for any person, business or other entity during the emergency declaration period to rent, lease or offer to rent or lease, or increase the rental price, to any existing or prospective tenant for any housing unit, of any kind, within the City of Chico, for a price of more than 10% above the average retail price charged for that housing unit immediately prior to the occurrence of a Declared Emergency, unless that person, business or entity can prove that the increase in price is directly attributable to additional costs for labor or materials used to provide the rental unit, in which case, the price shall not be more than 10% above the total cost of providing that rental unit.
B. Transient Housing. It is unlawful for any person, business or other entity during the emergency declaration period to rent or lease a hotel or motel room, or other short-term or long-term rental unit, including a vacation rental unit, in the City of Chico, for more than 10% above the hotel, motel or other short-term or long-term rental's regular rates, as advertised immediately prior to the occurrence of a Declared Emergency, 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.
C. Sales of Goods and Services. It is unlawful for any person, contractor, business, or other entity during the emergency declaration period to sell or offer to sell any consumer food items or goods, 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, in the City of Chico, for a price of more than 10% above the price charged by that person for those goods or services immediately prior to the occurrence of a Declared Emergency. 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, provided that in those situations where the increase in price is attributable to additional costs imposed by the seller's supplier or additional costs of providing the good or service during the state of emergency, the price represents no more than 10% above 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 state of emergency.
(Ord. 2522 §2 (part), Ord. 2527 §1 (part))
A. It shall be unlawful for any person to evict an existing tenant or terminate an existing lease or month-to-month rental agreement during the emergency declaration period and subsequently rent or lease the same dwelling unit, including a vacation rental unit, in the City of Chico for more than the average retail price, unless such person can prove that the excess is directly attributable to additional costs resulting from the labor or materials necessary to provide the rental. In such instances, only the actual cost increase may be added to the average retail price. This section does not prohibit an owner from evicting a tenant for any lawful reason, including pursuant to Section 1161 of the Code of Civil Procedure. It shall not be a violation of this subdivision for a person, business, or other entity to continue an eviction process that was lawfully begun prior to the proclamation or declaration of emergency.
(Ord. 2522 §2 (part), Ord. 2527 §1 (part))
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