As if life wasn’t difficult enough for thousands of people in Los Angeles County with no place to live because they lost their homes in the recent wildfires, some landlords have been jacking up rental prices for available houses, condos, apartments and rooms three to four times the fair market value.
The practice, known as price gouging, is illegal, reminded the L.A. County Board of Supervisors at their board meeting on Tuesday, Feb. 4. State and county laws allow rental increases during a declared emergency of no more than 10%, the county reported.
And the five supervisors didn’t just leave it at that. They voted to increase the civil penalty for anyone caught price gouging during the fire emergency from $10,000 to $50,000 per violation. The proposed higher penalty will be in a resolution at the Feb. 11 meeting, and it is likely to receive quick approval.
In addition, the board asked the county’s Department of Consumer and Business Affairs (DCBA) to stop corporate landlords from using algorithmic rental price fixing software that is often responsible for setting rents sky high — or they will face litigation. The report comes back to the board in 60 days and the plan will be modeled after a similar ordinance in San Francisco.
The county has received 915 complaints of price gouging, with about 90% related to rental prices, said DCBA director Rafael Carbajal. “As the market continues to use these algorithms, it is feeding into the increases,” Carbajal said.
The Rent Brigade, an online group that tracks rental increases on housing and apartment rental websites, looked at listings in L.A. County before Jan. 7 — the date the Eaton and Palisades fires started — through Jan. 31. The group found more than 2,800 instances of rent gouging in L.A. County, reported Chelsea Kirk, who testified about the group’s findings.
“Unless we prosecute and put landlords in jail for this, they won’t be stopped,” she said, adding that only two landlords have been criminally charged in the county.
The group said it looked at every Zillow listing in L.A. County from Jan. 7 to Jan. 18 in its first report posted on its site. The website said the group found “landlords and agents are illegally overcharging renters by $7.7 million per month, amounting to $92.4 million annually above the legal limit.”
The group said, “the number of reported rent gouging instances surged by 5,065% from Jan. 7 to Jan. 18.”
Fifth District Supervisor and Board Chair Kathryn Barger, whose district includes Altadena, where about 6,000 homes were lost in the Eaton fire, said she’s heard of cases where rents were doubled overnight.
“Taking advantage of people in this crisis is not tolerated by this board,” she said. Barger said she heard from a displaced resident who was outbid by $3,000 above the asking rent and walked away without any place to stay. “Accessible and affordable housing should not be a casualty of these wildfire disasters,” she said.
Barger said she knew of many fair, honest mom-and-pop landlords who have not used such practices.
Those looking for rentals are plunged into an already tight, overpriced market in L.A. County. In Altadena, more than 100 multifamily rental properties were destroyed. The city of Los Angeles Housing Department reported there were 751 multi-family units, out of 992 in the area, that were destroyed in the Palisades fire. Of those lost, 75% were rent stabilized units, the county reported.
Rent gouging has occurred not just in fire zones, but also miles away, the county and others who testified reported. Some landlords are raising rents so high that tenants move out, so the landlord can charge double for the new tenant, said Third District Supervisor Lindsey Horvath.
Jeff Torres told the board his friend was evicted three days after the fire. His friend saw high rents in Temple City, including a two-bedroom, two-bath apartment listed for $3,600.
Horvath announced she recently joined California Attorney General Rob Bonta in coordinating efforts at the local and state levels to ensure renters and consumers are protected from price gouging.
“The fires have already displaced thousands of Angelenos. We must act urgently to protect renters, homeowners, and small businesses from skyrocketing prices,” Horvath said.