As wildfires spread throughout California, hundreds of thousands of residents have been forced to evacuate their homes. Many are looking for hotel rooms to provide shelter for themselves and their pets until they’re able to return. With a declared statewide emergency, anti-price gouging laws have gone into effect, designed to protect Californians from being exploited when they try to secure hotel rooms or other essentials. But what is price gouging, exactly, and what should you do if you think you might be a victim of it?
“Families in California are in the midst of dealing with devastating wildfires. They shouldn’t have to worry about whether they’re being illegally cheated out of fair prices,” California Attorney General Xavier Bercerra wrote in a statement on Sunday. “Our state’s price gouging law protects people impacted by an emergency from illegal price gouging on housing, gas, food, and other essential supplies,” he added, encouraging residents to report incidents of suspected gouging during the fire emergency though a form on his office’s website.
Anyone who has been the victim of price gouging, or who has information regarding potential price gouging, should file a complaint at https://t.co/eIJXAcZIOU or call (800) 952-5225, or contact their local police department or sheriff’s office. pic.twitter.com/tbpzG9k3A7
— Xavier Becerra (@AGBecerra) October 27, 2019
California has an anti-price gouging statute which lays out what behaviors are banned. Under Penal Code Section 396, companies are banned from raising the price on certain goods and services by more than 10 percent after a state of emergency is declared. The protected goods and services include essentials like lumber, gasoline, batteries, water, and lodging, in both hotels and temporary rentals. If a vendor gets caught violating state anti-gouging law, it’s a criminal offense which can carry penalties up to a year in prison, and a civil cause of action carrying penalties of up to $5,000 per violation.
LeBron James posted a tweet early on Monday morning, calling attention to his challenge finding an available hotel room for himself and his family after they were evacuated from their Brentwood home. In the fire-ravaged Bay Area, activist Alicia Garza posted a screencap that appeared to capture a Hilton Garden Inn in Emeryville going for $1,272 on booking app HotelTonight for a one-night stay on October 28; typical rates at that hotel tend to hover closer to $200. (Hilton responded to a Los Angeles request for comment on the situation by stating that they were surprised by the tweet and would be investigating. “We take these matters seriously and always seek to offer our guests a fair rate based on remaining inventory, as well as comply with local laws related to pricing,” the company representative said.)
But not every high price for a hotel room, even ones that seem eye-popping, constitutes gouging in a legal sense. The 10 percent rule applies to 10 percent over the hotel’s “rack rate,” a nightly rate which might be considerably higher than you’re used to seeing that same room go for on booking sites. And if a company can show that their costs to provide the good or service went up during the emergency–that they had to pay more for their own staff or supplies–that increase can also be passed on to the consumer without being considered gouging.
In response to the wildfires, some hotels are going the opposite way and have extended discounts on their typical rates to evacuees. The Mondrian Los Angeles has created a reservation site for evacuees offering prices 30 percent lower than they’d otherwise be. Visit West Hollywood has posted a list compiling offerings available in that area, including discounts at 1Hotel, Charlie Hotel, and elsewhere, and which hotels are able to accommodate pets. As of Monday, even as the Getty fire and others continue to grow, a search on Kayak.com finds a number of hotel rooms available in the Los Angeles area, offered at or below typical market prices.
Prosecutions under the anti-gouging statues have been relatively rare in California. A representative for the Los Angeles City Attorney’s office confirmed that there are no current cases about hotel price gouging in progress. In 2018, the Sonoma County District Attorney’s office did bring charges against a group of residential landlords in Sonoma and Marin, alleging the landlords hiked rent for some homes by thousands of dollars per month in the weeks following fires that destroyed many residences.
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