The Los Angeles County Board of Supervisors approved a motion on Tuesday, Feb. 11, to increase the penalty for price gouging to a maximum of $50,000 per violation.
The supervisors voted 5-0 to increase the penalty. State law allows for up to one year in jail and a $10,000 fine for price gouging, which occurs when landlords or merchants charge more than 10% above what they were charging before a disaster occurs.
Supervisor Lindsey Horvath, who introduced the motion last week, noted then that “price gouging laws have been in effect limiting the amount of money that can be charged for goods and services including rent. Yet, there are bad actors who are taking advantage of this crisis.”
Horvath noted that the recent wildfires in Los Angeles County burned more than 16,000 structures including many homes and apartments and displaced tens of thousands of people, and she cited a study by Rent Brigade that found thousands of potential violations, including in areas not affected by fires, in the first 11 days after the blazes broke out Jan. 7.
Board Chair Kathryn Barger, who co-authored the motion, said she had witnessed a disturbing trend of price gouging in the area, preying on the most vulnerable communities. Barger called the increased penalty a “bold action.”
The County Counsel was also authorized to consider initiating or joining existing litigation involving price gouging and price fixing algorithm software used by housing websites.
Supervisor Holly Mitchell said the rent-fixing algorithms were predatory and compared them to red-lining practices that kept minorities from buying homes for decades.
In last week’s meeting, the county CEO was asked to draft a board letter requesting that online housing applications including Redfin, Zillow, Apartments.com, AirBnB, and VRBO, post a banner on their websites about the county’s state of emergency and price gouging laws.
The motion will remain in effect for the duration of the local emergency.