In Los Angeles County, landlords who were found price gouging during the wildfire disaster might potentially be fined up to $50,000.
The Board of Supervisors decided to raise the maximum fine from $10,000 to $50,000 per infraction as thousands of displaced people seek to locate housing only to be met with skyrocketing rental costs.
This week, Blueground, a short-term rental company that promotes properties on many platforms, was sued by the Los Angeles City Attorney’s Office.
City prosecutors claim that Blueground raised rent by more than 50% in certain instances following the recent wildfires, in violation of state anti-gouging rules.
The chief executive officer of Blueground denied the allegations, stating that the business abides with state law.
On January 7, Blueground advertised a downtown apartment whose price increased by 56% and a North Hollywood flat whose rent increased by more than 20%, according to the prosecution.
Peak vacation season prices, according to the corporation, are to blame for the rent rises.
On Tuesday, the Board of Supervisors reiterated that county and state regulations forbid increases in rental prices of more than 10% during an emergency, according to the Los Angeles Daily News.
This Tuesday is anticipated to see the passage of the resolution that will formally apply the higher fines.
The board also ordered the county’s Department of Consumer and Business Affairs (DCBA) to crack down on corporate landlords that use algorithmic software to rig rental rates.
Such technology has been associated with significant increases in rent.
There have been reports of several property management firms using computational tools to determine rental prices, including YieldStar from RealPage.
Several states and federal prosecutors have sued RealPage, claiming that the software violates antitrust rules by allowing landlords to align rents and exchange private information.
RealPage spokesperson Jennifer Bowcock told, “RealPage wants to express its deepest sympathies and help support local communities by reassuring them that our software can help avoid charging inappropriate or illegal rents, as the wildfires across California continue to devastate the region and cause terrible disruption to people’s lives.”
Other companies that have been recognized as using this software include Cortland, Camden Property Trust, Willow Bridge Property, Blackstone’s LivCor, Greystar Real Estate Partners, and Cushman & Wakefield’s Pinnacle.
The federal government took legal action against these companies after they were accused of coordinating and inflating rental costs using RealPage’s technology.
In order to safeguard renters and stop possible price-fixing, governments like San Francisco have banned the use of algorithmic rent-pricing software in response to these worries.
With legal action pending for violators, the DCBA has sixty days to create a plan based on a comparable San Francisco ordinance.
Nearly 90% of the county’s 915 price gouging complaints, according to DCBA Director Rafael Carbajal, have been connected to rent increases. “The market’s continued use of these algorithms is contributing to the increases,” he stated.
The Eaton and Palisades fires started on January 7 and the ads from that date through January 31 were analyzed by The Rent Brigade, an online watchdog group that keeps an eye on rental costs.
Throughout LA County, the group found over 2,800 cases of rent gouging. Chelsea Kirk emphasized the gravity of the problem in her testimony before the board.
She stated that only two landlords in the county have been charged with crimes, adding, “They won’t be stopped unless we prosecute and put landlords in jail for this.”
Renters have been overcharged by an estimated $7.7 million each month, or $92.4 million annually, according to the group’s data, which was collected from Zillow listings between January 7 and January 18.
According to the watchdog group, the number of reports of rent gouging increased by 5,065% during that period.
Board Chair Kathryn Barger, speaking on behalf of the Fifth District, which includes Altadena, which was devastated by the fire, described heartbreaking instances of displaced residents being priced out of housing opportunities.
According to Barger, “this board does not tolerate taking advantage of people in this crisis.” In one instance, she explained, a relocated resident was left without a place to stay after their bid was outbid by $3,000 over the asking rate.
An already competitive housing market in LA County has been made worse by the fires.
More than 100 multifamily rental buildings in Altadena were demolished.
In the meanwhile, the Palisades fire destroyed 751 multi-family units, 75% of which were rent-stabilized, according to the city of Los Angeles Housing Department.
Trump’s DOJ Targets Blue County Sheriff for Releasing Criminal Immigrant in College Town
County officials claim that price gouging has spread beyond the fire zones, impacting villages miles away.
According to Third District Supervisor Lindsey Horvath, some landlords are forcing out existing residents by boosting rates so much that they can demand twice as much for new renters.
According to local resident Jeff Torres, his friend was evicted three days after the fires, but there was a sharp increase in rental costs in adjacent Temple City. One advertising listed a two-bedroom, two-bathroom apartment for $3,600.
Mortgage Lender Executive Arrested for Allegedly Killing 88-Year-Old in Drunk Driving Incident
Horvath declared her partnership with California Attorney General Rob Bonta to enhance state and local enforcement.
In order to keep opportunistic landlords from taking advantage of people in crisis and to guarantee that affordable housing is still available to displaced households, county officials are pushing for tougher penalties and more regulation.
