Last January, a series of massive wildfires broke out across the Los Angeles area, fueled by high winds and dry temperatures. The fires raged for weeks, incinerating entire neighborhoods in the wealthy Pacific Palisades and in middle-class Altadena. They killed at least 30 people and destroyed at least 10,000 homes.<\/p>\n
As the embers cooled, thousands of displaced Angelenos scrambled to find new housing in a rental market that was already among the nation\u2019s toughest. They scoured Zillow and Airbnb for units they could afford on short notice. What they found were sky-high prices gouged by property owners and real estate agents rushing to capitalize on the surge in demand.<\/p>\n
Dawn Smith and her family had rented in Altadena for nine years. After their home burned in the Eaton Fire, she combed through online listings for a similar alternative. But options were $10,000 a month or more, triple what she had been paying before the fire.<\/p>\n
Eventually, she found a smaller place in Sherman Oaks, more than an hour away, for a still-astonishing $7,800. Her renter\u2019s insurance would cover the difference for a few months, but not for the whole term of the lease. Now, as her insurance comes close to expiring, she and her husband are trying to figure out where to go next.<\/p>\n
\u201cThe prices were insane,\u201d she told Grist, \u201cbut because we had to find somewhere, we rented.\u201d<\/p>\n
Controversies over price-gouging play out all over the country in the wake of natural disasters as victims scramble for essential goods. Officials in New Jersey went after price-gouging gas stations after Hurricane Sandy; officials in North Carolina went after scam contractors after Hurricane Florence; and Florida prosecutors said they received more than 100 complaints after last year\u2019s Hurricane Milton. <\/p>\n
Most states have laws that prohibit such behavior, but they are difficult to enforce in the chaos of disaster, and some economists contend that they can backfire and cause shortages or hoarding.<\/p>\n<\/p>\n
A map of reported rent-gouging across Los Angeles County in the wake of the January wildfires, courtesy of The Rent Brigade<\/p>\n
But housing is a special case. Overpaying for water or gasoline might be difficult, but overpaying for a rental apartment is a long-term commitment that can lead to bankruptcy or eviction down the road. Concerns about price-gouging of rental apartments have appeared after numerous recent wildfires, including the 2018 Camp Fire in Paradise and the 2021 Marshall Fire in Boulder. But prosecutors and public officials have largely failed to deter or punish this illegal behavior.<\/p>\n
Two days after wildfires broke out in Los Angeles last January, tech founder Edward Kushins and real estate agent Willie Baronet-Israel hiked the price of a home they were renting out in the waterfront city of Hermosa Beach by 36 percent, likely an increase of more than $1,000. The city is about 15 miles from the Palisades burn zone.<\/p>\n
A month later, California Attorney General Rob Bonta sued the two, citing a state law that makes it a crime to raise prices for food and shelter during an emergency by more than 10%. If found guilty, Kushins and Baronet-Israel would face fines of up to $10,000 and as much as a year in prison.<\/p>\n
But the Hermosa Beach listing was just one of thousands that were spiking in price. According to a Washington Post analysis of listings data from the firm RentCast, the average rent in the L.A. area rose by 20% in the two weeks after the fire \u2014 double the maximum allowable increase under California law. The home-rental company Airbnb also allowed users to raise prices above legal limits on more than 2,000 properties, despite its assurances that it would block such behavior, according to prosecutors.<\/p>\n
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The burnt remnants of an apartment building in Altadena, California, following the Eaton Fire in January. Many fire victims struggled to find housing as rents skyrocketed. <\/p>\n
(<\/p>\n
Keith Birmingham <\/p>\n
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MediaNews Group\/Pasadena Star-News via Getty Images via Grist<\/p>\n
)<\/p>\n
This lack of enforcement is common after disasters. But this time, it triggered an unprecedented campaign for stricter regulation of housing prices \u2014 and one that got results.<\/p>\n
\u201cThe minimal enforcement that has happened has totally sent a signal,\u201d said Chelsea Kirk, a tenant advocate who organized against price-gouging after the L.A. wildfires. \u201cLandlords expect that enforcement does not exist.\u201d<\/p>\n
Three dozen states and the District of Columbia have laws that prohibit merchants from price-gouging during an emergency, but unlike California, which prohibits hikes of more than 10%, many of these laws are vague, prohibiting \u201cexcessive\u201d or \u201cunconscionable\u201d increases without specifying what that means or what goods are covered.<\/p>\n
\u201cThe laws are all over the place,\u201d said Teresa Murray, the lead consumer advocate at the Public Interest Research Group, a nonprofit that focuses on consumer protection. Furthermore, enforcement of these laws is minimal \u2014 the government can\u2019t be everywhere all at once after a hurricane or flood, and most disaster victims aren\u2019t aware of their rights and don\u2019t track or call out violators.<\/p>\n
The stakes are even higher when it comes to housing, which is already in shortage across the country. Around half the nation\u2019s tenants are rent-burdened, meaning they spend more than 30% of their income on rent. Wildfires and hurricanes often destroy thousands of homes in quick succession, exacerbating supply crunch in local housing stock.<\/p>\n
Research from across the country shows that landlords often hike prices after major fires and floods. Asking prices for rental apartments increased by 25%<\/a> after the 2018 Camp Fire in Paradise, California, for instance, and by 44%<\/a> in Lahaina following the 2023 Maui wildfires in Hawai\u02bbi. The increases even hit existing renters: More than a quarter of renters<\/a> in Boulder said they saw hikes of more than 10% after the 2021 Marshall Fire, and a study of multiple flood events found that inexpensive apartments see hikes of 5%<\/a> on average after a flood. These hikes hit low-income households hardest, forcing them to relocate or cut down on other expenses.<\/p>\n This same dynamic was on display in Los Angeles earlier this year following the Palisades and Eaton fires. One of the people who tested this market was Blanca, a woman who lived in an apartment building in Altadena, and who declined to give her last name because of her immigration status. The Eaton Fire destroyed her business and caused significant damage to the apartment complex where she and her husband lived. Even though their unit was intact, the building lacked water, gas, and electricity.<\/p>\n An aerial view of burned properties in Altadena, taken in July. Many of the homes destroyed in the January fires have not been rebuilt.\n<\/p>\n (<\/p>\n Allen J. Schaben<\/p>\n \/<\/p>\n Los Angeles Times via Getty Images via Grist<\/p>\n )<\/p>\n Blanca and her husband looked for other apartments, but all the available units they found were far too expensive, some thousands of dollars above what they had paid in Altadena for the same amount of space. They couldn\u2019t afford anything like what landlords were asking, so after a few weeks, they moved back to their unit in the damaged complex and lived there paying rent in unsafe conditions for months.<\/p>\n \u201cThe place has not even been inspected, and many people have returned since February,\u201d said Blanca in Spanish. \u201cBut there was nowhere else to go.\u201d<\/p>\n In the first days after the fire, California attorney general Bonta trumpeted the state\u2019s price-gouging ban several times \u2014 not only could landlords not raise prices by more than 10%, they also couldn\u2019t list new units for more than 160% of typical market value. But property owners seemed either not to know about the law, or not to care.<\/p>\n Bonta, the attorney general, has sent more than 750 warning letters since the fire to property owners who may have price gouged, but has initiated only four lawsuits, and so far not obtained a conviction. The city attorney of Los Angeles has filed a few of its own lawsuits, including against Airbnb, but the district attorney for much larger Los Angeles County has not filed a single price-gouging case. Legal nonprofits say they can\u2019t pick up the slack because they need a named victim in order to sue a landlord, and most disaster victims don\u2019t have the knowledge or resources to pursue litigation.<\/p>\n \u201cWe have been a little bit disappointed, I will say,\u201d said Rodney Leggett, the director of litigation at the Housing Rights Center in Los Angeles, which has sued a few property owners over the post-fire price gouging, including the company that owns the historic Villa Carlotta apartments in Hollywood. \u201cWe have gotten complaints of people seeing price gouging, [but] we have gotten relatively few \u2026 people saying, \u2018I am actively being price gouged.\u2019 I think a big part of that is it’s really hard for people to track, and to know, the sort of price changes that have occurred.\u201d<\/p>\n But the epidemic of price-gouging in L.A. after the fires has also triggered new progress on the difficult issue of enforcement. As Zillow flooded with overpriced homes, a group of tenant advocates began an unprecedented crowdsourcing campaign to track and shame price-gougers. Kirk, a policy advocate at the progressive nonprofit Strategic Actions for a Just Economy, was seeing numerous instances of price hikes, but she knew that Bonta\u2019s office and local prosecutors lacked the capacity to track and sue every landlord who was posting high-priced units.<\/p>\n Kirk partnered with Lauren Harper, a data analyst and fellow tenant advocate, and together they took enforcement into their own hands. Forming a new organization called The Rent Brigade, they created a spreadsheet that scraped Zillow for apartment listings that violated the price-gouging laws, and also encouraged fire victims and volunteers to submit proof of gouging. In the first few weeks after the fire, volunteers submitted more than 1,500 examples.<\/p>\n Mike Nemeth, the head of communications for the California Apartment Association, the state\u2019s biggest landlord lobby, told Grist that most landlords tried their best to comply with the law.<\/p>\n \u201cThe California Apartment Association takes seriously the legal and ethical obligations of rental housing providers during declared emergencies,\u201d he said. \u201cMost housing providers want to do the right thing, and our role is to help them navigate complex rules when it matters most.\u201d<\/p>\n (<\/p>\n Zoe Myers<\/p>\n \/<\/p>\n AFP via Getty Images via Grist<\/p>\n )<\/p>\n Thanks in part to the Rent Brigade\u2019s pressure, local officials in Los Angeles are now trying to step up enforcement. The Los Angeles County Board of Supervisors voted in July to create a new system for penalizing price spike activity. Instead of waiting for a prosecutor or a legal nonprofit to file a court complaint against a landlord, the local government could slap the landlord with an administrative fine, the same way it would punish a restaurant with cockroaches in its kitchen or a driver who parked near a fire hydrant. The fines could reach up to $1000 per violation per day, with an additional $500 per day for failing to cooperate with county investigations.<\/p>\n Jamie Court, president of the advocacy firm Consumer Watchdog, says this kind of ordinance could be a model for how to enforce price-gouging laws.<\/p>\n \u201cThis is desperately needed as a deterrent and to let people know that price gouging is not up to prosecutorial discretion,\u201d he told Grist. \u201cPeople need to know every violation could result in a fine, not just the few prosecutors choose to prosecute.\u201d<\/p>\n Los Angeles County\u2019s price-gouging ban lapsed at the end of July when the fire emergency ended, so the new rules will only apply the next time California declares an emergency for a fire, flood, or other calamity. But during the last months of the ban, Kirk and other advocates noticed something unexpected \u2014 and concerning. The rush of new housing demand from the fire had ended, but many landlords were still listing new units well above fair market rate.<\/p>\n The L.A. housing supply, Kirk and Harper concluded, was so limited that price gouging had become a normal part of the market. Even in the absence of a major shock like the fire, landlords were still asking for exorbitant rents, and tenants were still paying them. The emergency declaration had lapsed after an arbitrary period of a few months, but the overall housing picture was as bad as ever.<\/p>\n \u201cWhen the fire started, we were seeing a lot of these units coming online for absurd prices from people who don’t usually rent, maybe knowing that people coming from the Palisades would be able to afford those kinds of things,\u201d said Harper. \u201cBut the further that we get from the fires\u2026I think it’s reflective of just high rents.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Keep up with LAist. 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