In L.A. County, price-gouging landlords could soon face fines of $50,000

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 Tuesday to draft a resolution that would increase the maximum penalty for price gouging in L.A. County from $10,000 to $50,000.

“There are still bad actors who are taking advantage of this crisis,” said Horvath, whose district includes the blackened Pacific Palisades.

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.

“I always smile when I hear someone say it’s a misunderstanding,” Barger said. “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.”

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?”

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.

“The fact that we have this many instances of rent gouging and only two people have been prosecuted means it doesn’t matter what the penalties are, and it doesn’t matter what strong language the public officials use,” she said. “Statistically, what is two out of 2,800?”

Bonta has said his office is “making good on our promise to hold price gougers accountable, with more to come.”

L.A. City Atty. Hydee Feldstein Soto announced Tuesday that her office has charged rental platform Blueground with increasing prices by up to 50% in the aftermath of the wildfires.

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.

This software, popular among property management companies, use algorithms to recommend the highest rent that property owners can charge based on the market.

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. This summer, San Francisco became the first city in the nation to ban landlords from using this kind of software, panning it as “automated price-fixing.”

L.A. County leaders said Tuesday that they are considering a similar crackdown in the aftermath of the fires after some landlords scrutinized by the county for price gouging have pointed their fingers at these companies.

“We anticipate that it is feeding into the increases,” Carbajal said. “Some of them have apologized and said, ‘I wasn’t aware that I was price-gouging — I hope I’m not in trouble.’”