New Bill Caps Post-Disaster Price Hikes at 10% for Essentials, Lodging, and Rentals

This proposed legislation, the "Stop Disaster Price Gouging Act," aims to put a lid on extreme price increases for critical goods and services right after a major disaster or emergency gets declared by the President. Think hurricanes, wildfires, or other major events triggering federal involvement under the Stafford Act. The core idea is to prevent businesses from unfairly profiting off people's desperation by setting clear limits on how much prices can jump.

The Price Cap Rules: What Sellers Can (and Can't) Charge

Here’s the breakdown: once a disaster is declared, the bill generally prohibits selling essential consumer goods and services, hotel rooms, or rental housing for more than 10% above the price charged immediately before the declaration. This 10% cap lasts for 30 days. For repair or reconstruction services, crucial for rebuilding, the 10% cap extends longer, lasting 180 days.

What counts as "essential"? The bill defines this broadly to include basics like food, water, ice, batteries, generators, fuel, medical supplies, and construction materials – the stuff people desperately need in a crisis. There's also a rule for items a seller didn't offer before the disaster: they can't charge more than 50% above their own cost for the item, again for that initial 30-day period.

When Prices Can Go Up (The Exceptions)

It's not a total price freeze. The bill acknowledges that sometimes, a seller's own costs genuinely increase after a disaster. Price hikes are allowed if they are a direct result of increases in the cost of goods from suppliers, labor, materials, or new tariffs. Hotels can also adjust prices based on regular, established seasonal rates. For rental properties, increases are permitted if they were already agreed upon in a contract before the disaster, or if the increase is necessary because the landlord had to make significant repairs to the property itself.

Who Makes Sure This Happens? Enforcement and Penalties

The Federal Trade Commission (FTC) gets the job of enforcing these rules, using its existing authority under the Federal Trade Commission Act to tackle unfair practices. States aren't left out; they can bring civil lawsuits against price gougers on behalf of their residents, though they need to give the FTC a heads-up first.

Crucially, individuals who believe they've been victims of price gouging can also take action. The bill creates a "private right of action," meaning people can sue the seller directly for relief, including potentially recovering up to three times their losses if the violation was willful, plus court costs and attorney fees. You'd have two years from discovering the violation to file a suit.

Violators face civil penalties up to $25,000 per violation, although the total penalty for a series of related acts by one person is capped at $25,000 (these amounts will adjust for inflation). Any money collected from these penalties is earmarked to help fund disaster relief efforts in affected communities. Finally, this federal law is designed to work alongside state laws, meaning it won't override state-level price gouging protections that are consistent with its goals.