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Atty, California. General Rob Bonta this week accused real estate agent Iman Shagian of increasing the price of Beverly Hills rentals by more than 30% in the days following the January 7 fire. This is the fourth request submitted by Bonta since the price adjustment rules came into effect that prohibit rent increases of more than 10% after natural disasters.
“It’s illegal to take away Californian pain from price gouging and I don’t support it,” Bonta said in a news release.
A few weeks after the fire, city officials vowed to crack down on offenders after thousands of complaints had been filed. Some organizers have edited spreadsheets that record rent. Bonta has joined a team of lawyers to assess complaints, and his office is primarily targeting real estate agents.
However, some critics argued that officials weren’t doing enough to deal with ramp-scaling gouging that had appeared throughout the region in the wake of the fire, and said the charges filed represent only a small portion of complaints filed with the city and state.
“We need to do more,” said Chelsea Kirk, co-founder of activist organization The Rent Brigade. “It’s prioritized and all discourse from the press on elected officials and rent gouging has concluded.”
Kirk’s organization checked Zillow for example price gouging and said it currently has over 10,000 active lists. Her team submits weekly reports to government officials, but said transparency is an issue as no one knows exactly what is being investigated.
As a result, her team worked with LA City Councilman Hugo Soto-Martínez to draft a move that would require LA City Atty if passed. Hydee Feldstein Soto produces a monthly report detailing the total number of price raise complaints, response times and enforcement actions received. The motion has been introduced, but it has not yet been placed on the agenda.
“There’s a total lack of urgency,” Kirk said.
In addition to Shagiyan, Bonta filed accusations against La Kanjada Flintridge agents Mike Covessy and Glendale Agent Lasseven Chourzian in January. In February he indicted Hermosa Beach agent Willie Baronette Israel and property landlord Edward Kusinth.
All four cases are active. If convicted, the biggest penalty for a misdemeanor could be a one-year and a $10,000 fine in prison.
In addition to the charges, state Department of Justice officials said they sent over 750 warning letters to hotels and landlords accused of price gouging. The department is also investigating low-ball offers on fraud, fraud and burning properties.
Bonta is investigating on behalf of the state, while Feldstein Soto is filing a lawsuit on behalf of the city. So far, she’s targeted more than just a real estate agent.
In February, Feldsteinsoto’s office sued the rental giant Blue Ground, citing more than 10 priced gouging cases. In one example, Blue Ground is said to have increased rents at downtown LA apartments by 56% on January 7th, the day of the fire.
In March, Feldstein Soto’s office sued a group of homeowners and businesses for $62 million, citing not only price-raising violations, but also violations of the city’s short-term rental ordinance that imposes restrictions on rentals such as Airbnbs. The defendant group included four homeowners and five limited liability companies: Akibanuulla, Mikahiler, Heim amlandslihen, Rachel Florence Saadat, Hiller Hospitality, Hiller Hospitality Group, 1070 Bedford, Red Rock, Coastal Attractions.
The Times reached out to all individuals charged with price gouging or short-term rental violations, except for Zrihen and Saadat.
In the first few weeks after the fire, Feldsteinsoto’s office issued over 250 ceasefires and assumption letters to owners, landowners and property management groups, based on price adjustment tips.
The price adjustment rules are set to expire on July 1st.
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