Los Angeles County supervisors are taking decisive action to combat price gouging in the wake of devastating wildfires, proposing a significant increase in fines for landlords who exploit the crisis by hiking rents. The proposed resolution, led by Supervisors Lindsey Horvath and Kathryn Barger, aims to raise the maximum penalty for price gouging from $10,000 to $50,000, reflecting the urgent need to protect vulnerable renters during such crises.
In the aftermath of the recent wildfires, which severely impacted areas like Pacific Palisades, both supervisors expressed concern over landlords who are taking advantage of those displaced by the fires. "There are still bad actors who are taking advantage of this crisis," stated Horvath, emphasizing the need for stricter regulations to deter predatory behavior.
Under California law, landlords are generally prohibited from charging more than 10% above previous rents immediately following a disaster. Offenders can face up to a year in jail and the current maximum fine of $10,000. However, some officials in Los Angeles are advocating for even higher penalties, with Barger suggesting a fine of $30,000 as a more appropriate deterrent. "No, it’s not a misunderstanding when you put it down for being $8,000 a month and then after the fires, it’s up to $23,000 a month," she remarked, highlighting the blatant nature of some rent increases.
Despite the proposed changes, tenant advocates are skeptical about the effectiveness of the new measures. Many argue that the current enforcement of price gouging laws is inadequate, with only a handful of landlords facing charges since the fires began. Chelsea Kirk, an organizer who has been tracking instances of price gouging, noted that only two landlords have been prosecuted out of approximately 2,800 reported cases. "What is that signaling to landlords?" she questioned, calling for more robust enforcement mechanisms.
California Attorney General Rob Bonta has taken steps to address price gouging, filing charges against real estate agents for significant rent increases. One agent was accused of raising a rental price by 38%, while another increased a Glendale property’s rent by over 50%. Bonta’s office has received 915 complaints of price gouging in Los Angeles County, not including those reported on a crowdsourced spreadsheet created by tenant advocates.
The surge in rent increases may be partly driven by rental pricing software used by property management companies. These algorithms suggest rental prices based on market trends, which some landlords claim they were unaware could lead to price gouging. Rafael Carbajal, head of the county’s Department of Consumer and Business Affairs, indicated that this software could be contributing to inflated rents.
As the county considers the proposed resolution, leaders are also exploring potential regulations on the use of such pricing software. "We anticipate that it is feeding into the increases," Carbajal stated, acknowledging the challenges faced by both renters and landlords in the current housing market.
The proposed changes are part of a broader effort to ensure that renters are not exploited during emergencies, reinforcing the county’s commitment to protecting those most affected by the wildfires. As discussions continue, the outcome of this resolution could set a significant precedent for how price gouging is handled in California going forward.