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The asking rent for a two-bedroom condo in Los Angeles’ Beverly Grove neighborhood has jumped from $5,000 to $8,000 after a fire that started last week left thousands homeless.
In Venice, single-family homes rose by nearly 60%. In Santa Monica, the owner listed a five-bedroom home for $15,000 more than last year’s asking price. This is an increase of over 100%.
Temporary price increase protections in place in the wake of the fires are supposed to prevent such dramatic rent increases, but a Times review of online listings this week found illegal price hikes were relatively common. It was shown that there is. These highly publicized properties on social media have caused an uproar, leading to calls for some landlords to reverse course and for authorities to prosecute distress profiteers.
“They need to act quickly and take an example from these people,” said Larry Gross, executive director of the Economic Survival Coalition, a local tenant rights group.
Some landowner groups are also joining the choir.
“Throw the book at them,” Fred Sutton, executive vice president of the California Apartment Association, told the Los Angeles City Council on Tuesday.
California’s price gouging rules go into effect after a state of emergency is declared and last for 30 days unless extended. In the case of local fires, this generally means landlords cannot charge more than 10% more than what they were charging or advertising before January 7th.
California Atty. Gen. Rob Bonta warned property owners and the public about the rules and vowed to crack down on violators.
Bonta’s office would not say how many price gouging complaints it has received. But Bonta has convened a team of attorneys from his offices across the state to evaluate the submission, an agency spokeswoman said.
“It is important that the victims of these fires are treated with respect, dignity and fairness,” Bonta said at a news conference in Los Angeles on Saturday. “Price gouging is illegal and we will not tolerate it.”
If convicted, the landlord faces up to a year in prison and thousands of dollars in fines. But after past major wildfires, the issue has rarely been prosecuted, and some tenant advocates say the reason price gouging is so rampant now is because people believe they’re okay. He claims that it is because he thinks so.
In 2018, the attorney general’s office indicted landlords and real estate agents in just two cases for allegedly illegally gouging prices after fires destroyed thousands of homes in Northern California. The state Legislature expanded the law later that year after complaints from advocates and local prosecutors that the law was too difficult to enforce.
At the request of Los Angeles City Council member Tracy Park, the city moved Tuesday to increase potential price gouging fines to $30,000 and free up resources to investigate and prosecute cases.
In some ways, modern technology has made it easier than ever to track down potential violations.
As the fires continue to burn, tenant advocates and the public are scouring rental information websites and creating shareable databases of suspected gouging to share with authorities, the press and social media.
Organizer Chelsea Kirk, who oversees one spreadsheet, said the behavior is “widespread” and people are taking their anger out directly at landlords and agents.
“People are asking me, ‘Call everyone on this list and tell them what they’re doing is illegal,'” said Kirk, policy director for the nonprofit Strategic Action for a Just. My hobby today is to tell them that there is,’ he said. economy.
So far, it seems to be working well. Many price gouging listings are removed or relisted for less than 10%.
Chad Singer, a real estate agent with Amalfi Estates, said part of the problem is a lack of knowledge about the rules among landlords.
“The people I educated changed it as soon as they realized it was illegal,” Singer said.
Still, complications remain. Singer said leases were already being signed at high prices, increasing the likelihood of lawsuits from the lessors who signed them. Bidding wars are also occurring outside of the formal listing.
One man told the Times that his brother-in-law showed up to a rental open house near Brentwood and was asked by a listing agent to fill out a form with his best offer.
“It appears that this case is still going on behind the scenes,” said Anya Rohrer, a policy advocate at the California Rural Legal Assistance Foundation, noting that such cases are likely to be more difficult to prosecute. .
She also worries that price gouging could pick up again after the initial rebound subsides. “We are not out of the woods by any stretch of the imagination,” she says.
Some real estate companies are taking measures where they can.
Zillow, a popular real estate listing website, allows you to view a property’s rent change history and is also featured in social media posts.
Emily MacDonald, a spokeswoman for the company, said that while rents are set by landlords or their agents, Zillow uses “internal systems” to detect potential violations and “exceed emergency thresholds. He said he has begun removing properties with increased prices. ”
“Zillow takes seriously our responsibility from consumers to promote fair rental practices, especially in times of crisis,” McDonald said. “If renters discover potential violations, we encourage them to report the property to Zillow and California authorities.”
In total, fires in Los Angeles County have damaged or destroyed more than 12,000 homes and other structures, creating another wave of homeless families in an area already experiencing an affordable housing crisis.
Not only due to fears of price gouging, but also because relatively wealthy displaced homeowners seek housing in other areas, increasing rents in already expensive areas and existing tenants feeling pressure to leave. , there are also general knock-on effects of rising costs.
Christopher Thornburg, founding partner at Beacon Economics, said he expected higher costs in the near term, but pressure on the housing market should ease as rebuilding efforts get underway. After devastating fires in Napa and Sonoma counties in 2017, rental vacancy rates fell, but prices soared. But the impact was temporary, he says.
“After a year, it waned, but then it came back into trend,” Thornburgh said.
But given the scale of the destruction in Los Angeles County, rebuilding is expected to take more than a year, and the region is already struggling to find enough new housing to meet demand.
State and local landowner industry representatives understand the region is in the midst of a crisis and are encouraging property owners to offer discounts to residents affected by wildfires. He said there was.
The Apartment Association of Greater Los Angeles has created a website for landlords to advertise short-term and long-term rentals.
These organizations educate their members about price gouging laws and require third-party listing services to post warnings. Deb Carleton, executive vice president of the California Apartment Association, called reports of widespread gouging “upsetting” and advocated for stricter enforcement of the law.
“Landlords are really surprised,” Carlton said.
However, it seems that some of them have different ideas.
One real estate agent said a client told him that “a 10% cap is not realistic given the amount of demand in the market.” According to the agent, who requested anonymity to speak freely, the landlord ordered her to raise the rent on the Santa Monica property beyond acceptable standards, ignoring the agent’s warnings about the law.
“They said it was doubtful there would be any charges.”
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