California officials warn against soaring rents after deadly firestorms
19 January 2025, 09:04
Thousands of homes and other structures were destroyed in the LA area.
Southern California’s expensive housing market is going to get a lot more competitive after deadly firestorms torched more than 12,000 homes and other structures in the Los Angeles area, leaving tens of thousands of people without a place to stay.
There are already reports of rent-gouging, prompting elected leaders to issue stern warnings against the practice and pleading with the public to report unethical property owners who hike rents above the allotted 10% cap.
California Attorney General Rob Bonta said it is illegal for landlords to accept rent that exceeds the cap, even if someone is offering to pay a higher amount.
“You cannot jack up prices and take advantage of disaster victims, plain and simple,” he said.
A modern three-bedroom condo in a high-rise in central LA, for example, was offered at 5,500 US dollars (£4,500) a month in October, but it reappeared in an online listing this week with a new asking rent of 8,500 US dollars (£6,900). On Saturday, the listing was removed.
The entire state has struggled with the twin crises of housing and homelessness, only recently starting to make inroads to build more affordable homes.
California law prohibits price-gouging after an emergency has been declared, meaning individuals and businesses cannot increase the price of goods and services such as fuel or rentals by more than 10% of the price before the emergency was declared.
Price-gouging is punishable with up to a year in jail and a 10,000 US dollars (£8,200) fine for each violation.
Protections related to housing are generally in effect for 30 days, but governor Gavin Newsom has extended them on motel, hotel and rental housing until March 8.
Tenants’ rights and landlord association groups have called for strict enforcement against rent gougers amid media reports of obscenely high prices.
People on social media are crowd-sourcing examples of egregious increases, and even inputting their findings into a shared Google document.
A four-bedroom, four-bath house in Encino, for example, seeking renters at 12,000 US dollars (£9,850) a month in December was re-listed on January 13 at 14,000 US dollars (£11,500).
A three-bedroom, four-bath house in LA listed for rent at 16,000 US dollars (£13,100) in September was re-listed this week at 29,000 US dollars (£23,800) a month.
All exceed the 10% cap. By Saturday, both listings had been removed.
Displaced people with homeowners or renters insurance can receive living expenses to stay at a hotel or rental.
The Federal Emergency Management Agency also has several programmes in place to help displaced residents, while Mr Newsom’s office has announced that five major bank lenders have agreed to provide mortgage relief to affected homeowners.
Short-term rental platform Airbnb has said hosts in Los Angeles and Ventura counties who try to raise prices by more than 10% will instead receive an error message. The company is also sending reminders to hosts that price gouging during a state of emergency is illegal.
Online listing market Zillow is posting “important information for renters during a state of emergency” on area rentals, informing applicants of the law.
