The landlord caught price gouging in Los Angeles County during the wildfire crisis.
The Board of Supervisors voted to increase the maximum penalty from $10,000 per violation to $10,000 as thousands of displaced people struggle to find shelter.
The Los Angeles City Attorney's Office filed a lawsuit this week against Blueground, a short-term rental company that promotes real estate on several platforms.
City prosecutors said the Blue Ground violated the state's anti-gang laws by jacking rents of 50% or more in some cases, city prosecutors.
Blueground's CEO rebutted the claim, claiming that the company was in compliance with state law.
Prosecutors said Blueground sold apartments in North Hollywood, rents exceeding 20%, with downtown units rising 56% on Jan. 7.
The company claims that the rent increase was due to the peak travel season.
That's what the lawsuit was about Reported by Bloomberg News.
The Board of Supervisors on Tuesday reaffirmed that state and county laws would ban rental prices from rising above 10% during declared emergencies. The Los Angeles Daily News reported.
A resolution officially implementing the increase in fines is expected to be passed on Tuesday in Japan.
Additionally, the board has directed the county's Bureau of Consumer and Business (DCBA) to take measures against corporate landowners to manipulate rental prices using algorithmic software.
The use of such technologies is linked to substantial rent increases.
Several property management companies, such as RealPage's AldeStar, have been reported to use algorithmic software to set rental prices.
Federal prosecutors and several states filed lawsuits against Realpage, claiming that the software allows landlords to share sensitive information, adjust rent and violate antitrust laws. .
Other employers such as Greystar Real Estate Partners, Blackstone's Livcor, Willow Bridge Property, Camden Property Trust, Cushman & Wakefield's Pinnacle, Cortland, and more. Work is identified as a user of such software.
These companies have been reportedly using Realpage's algorithm to adjust and inflate rental prices, leading to legal action by the Fed.
In response to these concerns, cities like San Francisco have enacted prohibitions regarding the use of algorithmic rent pricing software to protect potential price fixes and renters.
The DCBA has 60 days to develop strategies modeled after similar ordinances in San Francisco, and there are legal action against the offenders' table.
DCBA Director Rafael Carbajal reported that the county has received 915 price adjustment complaints, with nearly 90% linked to increased rents. “It's being devoted to increasing as the market continues to use these algorithms,” he said.
Rent Brigade, an online watchdog group that monitors rental prices, conducted an analysis of the listings until January 31st when Eaton and Palisades were fired.
The group has identified more than 2,800 instances of rent gouging across LA County. Testifying before the board, Chelsea Kirk highlighted the severity of the issue.
“Unless we prosecute for this and put our landlord in jail, they can't stop,” she said.
Group data collected from the Zillow listings from January 7th to January 18th revealed that landlords and agents were overcharged tenants for $7.7 million per month.
Rental gouging reports spiked 5,065% over that time frame, according to WatchDog Group.
Kathryn Burger, the board chairperson representing the fifth district, including Altadena, where the fire was damaged, spoke of the painful incidents of displaced people who were being paid prices from available rentals.
“Utilizing people in this crisis is not tolerated by this board,” Berger said. She described one case where displaced people were above $3,000 seeking rent, and explained that they didn't leave a place to stay.
The fire has exacerbated the already tough housing market in LA County.
Over 100 multi-family rental properties have been destroyed in Altadena.
Meanwhile, the Los Angeles City Housing Authority reported that the Palisade fire wiped out 751 multi-family units, with 75% of them stabilizing rent.
Price gouging has been extended beyond the fire belt, affecting communities a few miles away, according to county officials.
Some landlords have raised rents that are so high that they are kicked out that they can now allow new tenants to be charged twice as much, said Lindsay Horvas, District 3 supervisor.
Local resident Jeff Torres shared that his friend was kicked out just three days after the fire.
Horvath announced his cooperation with California Attorney General Rob Bonta to strengthen enforcement at both the local and state level.
“The fire has already driven out thousands of Angelenos. We must act urgently to protect tenants, homeowners and small businesses from surge in prices.” she emphasized.
With more severe fines and increased surveillance, county officials are determined to prevent opportunistic landlords from exploiting people in crisis and to ensure fair housing is available to displaced people.
