In L.A. County, Price-Gouging Landlords Could Soon Face Fines of $50,000
County Supervisors Want to Raise Stakes for Post-Wildfire Price Gouging
Los Angeles County supervisors want to raise the stakes for post-wildfire price gouging, hammering landlords who dramatically hike rents with fines of up to $50,000. Supervisors Lindsey Horvath and Kathryn Barger, who both saw swaths of their districts decimated by fire, asked county lawyers to draft a resolution that would increase the maximum penalty for price gouging in L.A. County from $10,000 to $50,000.
Current Penalty for Price Gouging in L.A. County
In the immediate aftermath of a disaster, California law generally prohibits landlords from charging more than 10% above what they were previously asking. Violators could face up to a year in jail and a fine of $10,000. In Los Angeles, some officials want to increase the penalty to $30,000. Barger, whose district includes Altadena, said she wants to go further, contending that predatory landlords across L.A. County should pay a steep price.
Tenant Advocates Worry About Symbolic Penalties
Some tenant advocates worry that the beefed-up penalties will be purely symbolic. The state’s approach to price gouging, they say, is all bark and no bite. “We’re in week four of the wildfire crisis, and only two people have been charged,” said Chelsea Kirk, the 30-year-old organizer behind a widely circulated spreadsheet on which renters can report instances of price gouging they find on sites such as Zillow. “What is that signaling to landlords?”
Charges Filed So Far
California Atty. Gen. Rob Bonta charged a La Cañada Flintridge real estate agent last month for allegedly raising the price of a rental property by 38%. Bonta charged another agent for allegedly hiking the price on a Glendale property by more than 50%. A group of tenant advocates, including Kirk, released a report last month that found 1,300 instances of price gouging on Zillow in the first week and a half after the fires started. Since then, she said, the group has found an additional 1,500 examples.
County’s Efforts to Address Price Gouging
Since the fires began, L.A. County has received 915 complaints of price gouging, according to Rafael Carbajal, head of the county Department of Consumer and Business Affairs. He said the number does not include the examples on the crowdsourced spreadsheet. The price gouging could be fueled, in part, by rental pricing software, Carbajal said. Companies such as Yardi and RealPage have been under scrutiny by the U.S. Department of Justice for using this software, with the federal government arguing that the algorithms artificially inflate the price of housing.
Conclusion
The proposed increase in penalties for price gouging in L.A. County is a step towards holding landlords accountable for taking advantage of the wildfire crisis. While some tenant advocates worry that the penalties may be symbolic, it is clear that the county is taking the issue seriously and considering a crackdown on rental pricing software.
FAQs
Q: What is the current penalty for price gouging in L.A. County?
A: The current penalty for price gouging in L.A. County is up to a year in jail and a fine of $10,000.
Q: How many complaints of price gouging has L.A. County received since the fires began?
A: L.A. County has received 915 complaints of price gouging since the fires began.
Q: What is rental pricing software, and how is it contributing to price gouging?
A: Rental pricing software is a software used by property management companies to recommend the highest rent that property owners can charge based on the market. This software is believed to be contributing to price gouging by artificially inflating the price of housing.
Q: What is being done to address price gouging in L.A. County?
A: L.A. County is considering increasing the penalty for price gouging from $10,000 to $50,000 and cracking down on rental pricing software.
