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California’s attorney general is making it clear that he will not tolerate price gouging for shelter in the wake of the Los Angeles wildfires. On Monday. the office of California Attorney General Rob Bonta announced it was pressing charges against a second unnamed Realtor for price gouging.
According to the attorney general’s office, the agent allegedly attempted to price gouge a family who was evacuated due to the Los Angeles Eaton Fire. The allegations are the result of a review of complaints received by the California Department of Justice (DOJ). Through the investigation, the attorney general’s office learned that after being evacuated in the Eaton fire, the family contacted their real estate agent to find a rental property and inquired about a home in Glendale.
The agent representing the rental property offered the family a new price on the rental “that exceeded the listing price by more than 50%, which is in excess of the 10% limit laid out in Penal Code section 396 while the Governor’s Emergency Orders are in effect,” according to the attorney general’s office.
“In the face of natural disaster, we should be coming together to help our neighbors, not attempting to profit off of their pain,” Bonta said in a statement. “Today’s charges are another example of DOJ’s commitment to put an end to price gouging.”
The state’s DOJ currently has several active investigations into price gouging open and the attorney general’s office said the department will continue to ramp up deployment of resources to Los Angeles County to investigate and prosecute price gouging, fraud, scams, and unsolicited low-ball offers on property during the state of emergency.
Those who are found to be in violation of the price-gouging statute are subject to criminal prosecution, which can result in up to one-year of imprisonment in county jail and/or a fine of up to $10,000. Civil enforcement actions can result in penalties of up to $2,500 per violation.
This is the second real estate agent in the state to be accused of price gouging related to the Los Angeles wildfires. Bonta’s office filed charges against another agent last Wednesday. In that investigation, the California DOJ found that after a couple applied to rent a home, they were informed that the price had increased by 38%.
The attorney general’s office said that the California DOJ has sent over 650 price gouging warning letters to hotels and landlords. The price gouging restrictions remain in effect until March 8.
Although an official number has yet to be tallied, it’s expected that tens of thousands of homes have been lost in the LA fires. Although the impacts vary by market, supply has shrunk in many neighborhoods and demand for rental housing options has skyrocketed.
Data from Altos Research shows that the LA metro area has a median home price of nearly $1.5 million, with much higher prices in affluent neighborhoods like Pacific Palisades that have been decimated by the fires. But inventory is rising and conditions favor sellers in many areas.
John Graff, the CEO of Ashby & Graff Real Estate in LA, recently told HousingWire that the search for temporary housing will be “problematic” even as many people seek to rebuild.
“The housing supply here — both rental and for purchase — is incredibly short and the prices are incredibly high as a result,” Graff said. “Obviously, there will be anti-gouging measures in place to prevent anything nefarious from going on, but the prices still are what they are.”
