California's penal code 396 implements a price gouging law when a state of emergency is in place. Recently, a state of emergency was implemented due to drought conditions. As a result, housing providers may not increase rents more than 10% at the time of lease renewal OR for a new lease agreement. Many housing providers feel this is unfair, especially if they have spent money improving a unit for a new resident but may not increase the rent more than 10% form the prior rent. What happens if the prior lease holder had rent significantly below market rents? This could have an adverse effect on the owner.

Do you believe Penal Code 396 should apply to housing?