Price Gouging in Los Angeles: Your Rights and Resources After a Wildfire

In the aftermath of a declared state of emergency, price gouging on rental properties is illegal in California. Governor Gavin Newsom’s emergency declaration on January 7th activated anti-price gouging protections that make it unlawful for landlords to increase rent by more than 10% for at least 30 days. With tens of thousands displaced by recent wildfires, understanding these laws is critical for finding fair housing and protecting your financial interests.

What Constitutes Illegal Price Gouging in California?

Price gouging is the unethical and illegal practice of drastically increasing prices for essential goods, services, or housing during a state of emergency. In California, this is prohibited under California Penal Code Section 396. The law explicitly forbids housing providers from raising the rental price of a unit by more than 10% above the pre-emergency price. For properties that were not on the market before the declaration, the initial listing price cannot exceed 50% of what the provider paid for the goods or services.

This protection is triggered by the governor’s declaration and remains in effect for 30 days, though it can be extended. The goal is to prevent housing providers from exploiting the surge in demand and the vulnerable position of displaced families.

How Are Illegal Bidding Wars Impacting the Rental Market?

The severe housing shortage has led to a competitive environment where illegal bidding wars are becoming more common. While multiple offers on a rental property are not illegal in themselves, any resulting agreement that pushes the final rent price more than 10% above the original asking price violates the anti-gouging statute.

This is distinct from the home-buying market, where bidding wars are legal. For renters, the law provides a crucial safeguard. Wealthier displaced homeowners may be able to outbid others, but housing providers cannot legally accept those offers if they breach the 10% cap, creating an uneven and challenging market for lower-income residents.

What Practical Steps Can You Take to Avoid Price Gouging?

Protecting yourself requires vigilance and a proactive approach. Based on our experience assessment, following these steps can help you secure a rental at a fair price.

• Research Market Rates: Before you search, compare rental prices across different neighborhoods to establish a baseline for what constitutes a reasonable rate. Sudden, drastic increases are a major red flag.
• Inspect Listings Carefully: Be wary of online listings with模糊 descriptions, few photos, or prices that seem too good to be true. Note the original listing date; a unit listed after the emergency declaration has different pricing rules.
• Ask Direct Questions: If a price seems suspiciously high, question the landlord or property manager. Ask for justification for any significant increase and reference the state’s anti-gouging law.
• Document Everything: Keep records of all communications, including emails, text messages, and listing screenshots. This documentation is essential if you need to file a report.

How and Where Should You Report Suspected Price Gouging?

If you believe you have encountered illegal price gouging, it is important to report it promptly to the appropriate authorities. Violators can face fines of up to tens of thousands of dollars and even county jail time.

You can file a report through two main channels:

• Los Angeles County: Report violations by filling out an online form on the Department of Consumer and Business Affairs (DCBA) website, calling (800) 593-8222, or emailing info@dcba.lacounty.gov.
• California Attorney General: Visit the official website at oag.ca.gov/report or call (800) 952-5225 to file a complaint with the state’s top law enforcement office.

Beware of real estate speculators offering to buy fire-damaged properties for cash at far below market value. This practice may also be illegal and should be reported to the Attorney General.

What Additional Resources Are Available for Displaced Residents?

Beyond anti-gouging protections, a range of support is available. Official emergency declarations and information are posted on the Governor’s website (gov.ca.gov). For a comprehensive guide to recovery, including temporary housing assistance and mental health resources, seek out official county and state-sponsored pages.

The key to navigating this difficult time is knowing your rights, conducting thorough research, and utilizing official channels for reporting and support. Taking these measured steps can help you find safe, fairly priced housing as you rebuild.