Emergency Rent Caps Are Permanent — Landlords Can't Recoup Lost Increases Later, California Court Rules

During wildfires, floods, and pandemics, California’s price-gouging law kicks in. Penal Code § 396 caps rent increases at 10% during a declared state of emergency. It’s been on the books for years. But a question that’s been lingering — and that just got answered by a California appeals court — is: what happens after the emergency ends?

Can a landlord who held off on a rent increase during the emergency impose it later, once the cap is lifted?

In April 2026, the California Court of Appeal said no. The ruling in Western Manufactured Housing Communities Ass’n v. City of Santa Rosa makes clear: emergency rent caps are permanent ceilings for the period they cover, not temporary pauses.

The case, briefly

Santa Rosa, like much of Sonoma County, has seen its share of emergencies — particularly wildfires. During a declared state of emergency, Penal Code § 396 limits rent increases to 10% above the pre-emergency rate. The cap applies on top of any local rent control ordinance.

The question in this case was whether a landlord of a manufactured housing community could “recoup” suppressed rent increases after the emergency declaration ended — essentially charging tenants later for increases they couldn’t impose during the cap period.

The court said no. Here’s the reasoning: Penal Code § 396 isn’t just a timing rule. It’s a substantive limit on the amount that can be charged. Once the emergency period passes, the rent that would have been charged without the cap is gone — it’s not stored up for later collection. Landlords can resume normal rent increases going forward (subject to any other applicable rent control), but they cannot reach back and make up for lost time.

The court also clarified that the 10% cap references the rent “authorized” under local rent control at the time the emergency was declared — not some hypothetical market rate.

Why this matters

California has been under some form of state of emergency for significant portions of the last decade: wildfires, the COVID-19 pandemic, atmospheric river floods. In 2025 and 2026 alone, multiple counties were under emergency declarations for weeks or months at a time. The interaction between emergency price-gouging laws and local rent control is becoming a recurring issue — and this is one of the first appellate decisions to address it head-on.

For landlords, the message is clear: if you held off on a rent increase during an emergency because Penal Code § 396 capped you, you cannot tack that increase onto future rents. It’s gone. Factor that into your financial planning.

For tenants, this is a significant protection. Without this ruling, the 10% emergency cap would function more like a deferral program — you’d pay less now but owe it back later. The court has now confirmed that’s not how the law works.

The manufactured housing angle

This case specifically involved a manufactured housing community (often called a mobile home park). That matters because manufactured housing tenants in California typically own their homes but rent the land underneath them — which creates a unique vulnerability. You can’t easily pick up and move a manufactured home, so tenants in these communities are especially sensitive to rent increases on the underlying lot.

Santa Rosa has its own local rent control for manufactured housing communities, and the interaction between that local law, the state emergency cap under Penal Code § 396, and the statewide Costa-Hawkins Rental Housing Act created a three-way legal puzzle that the court had to untangle.

The practical takeaway

If you’re a landlord:

• Emergency-period rent caps are permanent reductions for those months. Don’t try to recoup them.
• Keep careful records of what you charged during declared emergencies versus what the pre-emergency rate was — if a tenant or regulator challenges your post-emergency increases, you’ll need to show they’re genuinely forward-looking, not make-up increases.

If you’re a tenant:

• If your landlord tries to impose a large rent increase after an emergency ends, and you suspect it’s effectively recouping capped increases, this case gives you a strong argument that it’s illegal under Penal Code § 396.
• The case doesn’t create new rent control — it just reinforces what the price-gouging statute already says. But having an appellate court say it explicitly is valuable.

The case is Western Manufactured Housing Communities Ass’n v. City of Santa Rosa, decided April 17, 2026. Read the California Lawyers Association case summary for more detail.

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This article is for informational purposes only. Rent control and emergency price-gouging laws are complex, fact-specific, and interact with local ordinances in ways that can vary by jurisdiction. Consult a California landlord-tenant attorney for advice about your specific situation.