California authorities warn of price gouging as rents soar in fire-ravaged Los Angeles

Southern California’s pricey real estate market will become much more competitive after deadly firestorms burned more than 12,000 homes and other structures in the Los Angeles area, leaving tens of thousands of people without homes.

Reports are already emerging of rent hikes, prompting elected leaders to issue stern warnings against the practice and implore the public to report unethical property owners who raise rents above the allotted 10% cap. .

California Attorney General Rob Bonta said in a statement Saturday that it is illegal for landlords to accept rent above the cap, even if someone offers to pay a higher amount.

“You cannot raise prices and take advantage of disaster victims, pure and simple,” he told a news conference.

A modern three-bedroom condo in a downtown Los Angeles high-rise, for example, listed for $5,500 a month in October, reappeared on Zillow this week with a new asking rent of $8,500. On Saturday, the list was deleted.

The entire state is grappling with the twin crises of housing and homelessness, and has only recently begun building more affordable housing.

Are landlords allowed by law to increase rents?

California law prohibits price gouging after an emergency is declared, meaning individuals and businesses cannot raise the price of goods and services such as gasoline or rentals by more than 10% over before the emergency is declared.

Price gouging is a misdemeanor punishable by up to a year in prison and a $10,000 fine for each offense.

Housing protections are generally in effect for 30 days. But on Thursday, Gov. Gavin Newsom extended bans on motels, hotels and rental housing until March 8.

Is there evidence of rising rents in the Los Angeles area?

Tenants’ rights groups and landlord associations have called for strict enforcement against rent scammers, amid media reports of obscenely high prices.

People on social media search for examples of egregious increases and even enter their findings into a shared Google Doc.

For example, a four-bedroom, four-bath home in Encino, seeking tenants at $12,000 a month in December, was re-listed on Jan. 13 with a new price of $14,000. A three-bedroom, four-bathroom home in Los Angeles that was listed for rent at $16,000 in September was re-listed this week at $29,000 per month.

All exceed the 10% cap. By Saturday, both lists had been deleted.

How does FEMA help people who need housing?

Displaced people with homeowners or renters insurance may receive living expenses to stay in a hotel or rental.

The Federal Emergency Management Agency offers several programs for displaced residents. It will cover short-term stays at participating hotels and motels. It also provides cash advances for housing through its travel and rental assistance programs.

FEMA also reimburses lodging costs not covered by insurance.

What about mortgage relief for homeowners?

Newsom’s office announced Saturday that five major bank lenders have agreed to provide mortgage relief to affected homeowners, including a 90-day grace period on mortgage payments, a 90-day waiver of late fees and a moratorium 60 to 90 days on new seizures. .

The banks are Bank of America, Citi, JPMorgan Chase, US Bank and Wells Fargo.

Do housing platforms contribute to the application of the anti-scam law?

Short-term rental platform Airbnb said Wednesday that hosts in Los Angeles and Ventura counties who attempt to raise prices by more than 10% will instead receive an error message. The company also reminds hosts that price gouging during a state of emergency is illegal.

Zillow releases “important information for tenants in a State of Emergency” on area rentals, informing applicants of the law.