The requested rental for a two-bedroom condominium in Los Angeles’ Beverly Grove area has surged from $5,000 to $8,000 following a fire that ignited last week, leaving countless individuals without shelter.
In Venice, the prices for single-family residences increased by almost 60%. In Santa Monica, the proprietor listed a five-bedroom house for $15,000 over last year’s asking price, marking an escalation of more than 100%.
Temporary safeguards against price hikes established after the fires aim to curb such extreme increases, yet a Times examination of online listings this week revealed that unlawful price surges were rather common. It was demonstrated that such instances exist. These widely publicized properties on social platforms have incited a backlash, prompting demands for certain landlords to retract their actions and for officials to take action against exploitative profiteers.
“They need to respond swiftly and set a precedent against these individuals,” remarked Larry Gross, executive director of the Economic Survival Coalition, a local tenant advocacy organization.
Several property owner associations are joining the outcry.
“Throw the book at them,” Fred Sutton, executive vice president of the California Apartment Association, addressed the Los Angeles City Council on Tuesday.
California’s anti-price gouging regulations are activated after a state of emergency is declared and remain in effect for 30 days unless extended. In the context of local fires, this typically implies that landlords cannot charge more than 10% above their pre-January 7th prices.
California Attorney General Rob Bonta cautioned property owners and the public regarding these regulations and pledged to take action against offenders.
Bonta’s office did not disclose the number of complaints related to price gouging it received. However, according to an agency spokeswoman, Bonta has assembled a team of lawyers from his various offices statewide to assess the information provided.
“It is essential that the victims of these fires are treated with respect, dignity, and fairness,” Bonta stated at a press conference in Los Angeles on Saturday. “Price gouging is unlawful, and we will not stand for it.”
If found guilty, the landlord could face up to a year in prison and hefty fines. Yet historically, following significant wildfires, such matters have rarely been prosecuted, and some tenant advocates assert that the rampant price gouging now is due to a pervasive belief that it is acceptable.
In 2018, the attorney general’s office charged landlords and real estate agents in only two instances for allegedly illegally inflating prices after fires devastated thousands of homes in Northern California. Later that year, the state Legislature modified the law after advocacy groups and local prosecutors complained of its enforceability.
At the behest of Los Angeles City Council member Tracy Park, the city moved on Tuesday to elevate potential fines for price gouging to $30,000 and allocate resources to investigate and pursue cases.
In certain respects, contemporary technology has facilitated the tracking of possible violations more efficiently than ever before.
As fires continue to rage, tenant advocates and the public are combing through rental information sites and compiling shareable databases of suspected gouging for law enforcement, media, and social outlets.
Organizer Chelsea Kirk, who manages one such spreadsheet, commented that the behavior is “widespread,” with people directing their frustrations towards landlords and real estate agents.
“Individuals are telling me, ‘Contact everyone on this list and inform them that their actions are illegal,'” revealed Kirk, policy director for the nonprofit Strategic Action for a Just Economy.
So far, the approach seems to be effective. Numerous listings associated with price gouging have been removed or re-listed at prices below the 10% threshold.
Chad Singer, a real estate agent with Amalfi Estates, pointed out that part of the issue is landlords’ lack of understanding regarding the regulations.
“The individuals I educated made changes as soon as they realized it was illegal,” Singer remarked.
Nevertheless, challenges persist. Singer noted that leases are already being finalized at inflated prices, raising the potential for lawsuits from tenants who signed them. Competitive bidding is also taking place outside of official listings.
One individual recounted to the Times that his brother-in-law attended a rental open house near Brentwood, where a listing agent requested him to submit a form detailing his best offer.
“It seems that this situation is still unfolding behind the scenes,” expressed Anya Rohrer, a policy advocate at the California Rural Legal Assistance Foundation, indicating that such cases are likely to be harder to prosecute.
She also expressed concerns that price gouging might spike again after the initial recovery period subsides. “We are far from being out of the woods,” she noted.
Some real estate entities are taking steps where possible.
Zillow, a well-known real estate listing website, allows users to view the history of property rent changes and is also highlighted in social media posts.
Emily MacDonald, a spokesperson for the company, stated that while rental prices are determined by landlords or their agents, Zillow employs “internal systems” to identify potential violations and has commenced removing properties that exceed emergency threshold increases.
“Zillow takes its responsibility to promote fair rental practices seriously, particularly in times of crisis,” MacDonald affirmed. “If renters notice possible violations, we encourage them to report the property to Zillow and to California authorities.”
In total, fires in Los Angeles County have damaged or obliterated over 12,000 residences and structures, creating another wave of homeless families in a region already grappling with a housing affordability crisis.
Not solely due to apprehensions of price gouging, but also because relatively affluent displaced homeowners are seeking accommodation in other areas, resulting in increased rents in already pricey neighborhoods, and existing tenants facing pressure to vacate, there are broader repercussions of climbing costs.
Christopher Thornburgh, founding partner at Beacon Economics, indicated he anticipates rising costs in the short term; however, he believes pressure on the housing market should alleviate as rebuilding efforts commence. Following the devastating fires in Napa and Sonoma counties in 2017, rental vacancy rates plummeted while prices soared. Nevertheless, he says the influence was only temporary.
“After a year, it subsided, but then it returned to a trend,” Thornburgh explained.
However, given the magnitude of the destruction in Los Angeles County, reconstruction is expected to exceed one year, and the area is already struggling to provide sufficient new housing to satisfy demand.
State and local landlord industry representatives are aware that the region is experiencing a crisis and are encouraging property owners to provide rent reductions to residents impacted by wildfires.
The Apartment Association of Greater Los Angeles has developed a website for landlords to promote short-term and long-term rental listings.
These organizations inform their members about price gouging regulations and compel third-party listing services to include warnings. Deb Carleton, executive vice president of the California Apartment Association, termed the reports of widespread gouging “distressing” and advocated for stricter enforcement of the law.
“Landlords are exceedingly apprehensive,” Carlton noted.
Nevertheless, it appears that some of them hold differing viewpoints.
One real estate agent recounted that a client expressed, “a 10% cap is unrealistic given the level of demand in the market.” The agent, who chose to remain anonymous to speak candidly, stated that the landlord instructed her to increase the rent on the Santa Monica property beyond acceptable limitations, disregarding the agent’s cautions about the legal implications.
“They claimed it was unlikely there would be any repercussions.”