California AG Files Charges Against Realtors Accused of Price Gouging Fire Victims

A house is available for rent in Los Angeles, Calif., on March 15, 2022. Mario Tama/Getty Images

California Attorney General Rob Bonta has charged a second realtor with price gouging during the fires that ravaged Los Angeles and Ventura Counties earlier this month.

Bonta accused the real estate agent who increased prices by more than the 10 percent allowed under California law during a state of emergency.

The charges,  announced by Bonta on Jan. 27, were brought against a real estate agent who allegedly attempted to price gouge a family who were forced to evacuate due to the Los Angeles Eaton Fire. The California Department of Justice (DOJ) had received complaints about the real estate agent’s activity.

The family, looking for a new rental through their real estate agent, inquired with another southern California real estate agent about a home in Glendale, which is located in the Verdugo Mountains region, as well as the San Fernando Valley, according to Bonta.

The real estate agent allegedly offered the family a price 50 percent higher than originally listed before the fire—exceeding the 10 percent allowed in California’s Penal Code section 396 during an emergency order. Gov. Gavin Newsom declared a state of emergency due to the fires on Jan. 7.

The charges are not the first price gouging charges Bonta has brought against a real estate agent in the Los Angeles area. His office previously filed charges against a real estate agent who tried to price gouge a couple whose home had been destroyed in the Eaton Fire. As in the recent case, the DOJ had received a complaint.

According to the allegations, the couple applied to rent a home and were subsequently informed the price had increased by 38 percent. They did not rent the house, citing the price increase.

“As part of Attorney General Bonta’s work to protect Californians following the Southern California wildfires, DOJ continues to actively investigate and prosecute price gouging, and has sent more than 650 warning letters—and counting—to hotels and landlords who have been accused of price gouging,” the attorney general’s office said in a statement.

The attorney general said that the DOJ is conducting several active price gouging investigations and is increasing its deployment of resources to Los Angeles County.

“We won’t stop until the price gouging does,” said Bonta.

Exploiting the Wildfires

Chelsea Kirk, who works for the economic justice nonprofit Strategic Actions for a Just Economy, anticipated that landlords would try to exploit the wildfires.

And so she took to Zillow and started researching rentals in her own neighborhood and quickly came across a listing for a three bedroom for $12,000. The rent had increased over 50 percent since Jan. 7. She noticed it was for short-term stays only and could be furnished if the new tenants needed it. It dawned on her that the landlord was advertising to those who had been displaced by the fires.

“I knew at that moment this was illegal,” she told The Epoch Times, citing the state’s price gouging law.

She started tracking landlords who appeared to be taking advantage of those who had lost their residences due to the fire. She created a Google spreadsheet, and posted the link to social media in an effort to crowdsource the initiative, which now has more than 1,400 manual submissions by more than 150 volunteers.

Kirk notes that some landlords are attempting to charge would-be tenants 70 percent and even 300 percent more than before the fires.

In her view, the rising prices during a natural disaster are a byproduct of a flawed housing system.

“We are seeing the shortcomings of our private housing market system that we’ve set up since post World War II, when we really moved away from any form of public housing and completely put the responsibility of providing shelter in the hands of the private market,” said Kirk, who is a Masters of Urban and Regional Planning from UCLA.

There are many lessons being learned right now, she said.

A violation of the price gouging statute can result in a maximum penalty of one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions, including civil penalties.