LA lawmakers threaten landlords with fines as high as $50K in rent-gouging crackdown

Landlords caught price gouging in Los Angeles County during the wildfire crisis now face fines as high as $50,000.

Board of Supervisors voted to increase the maximum penalty to $50,000 from $10,000 per violation as thousands of displaced residents struggle to find shelter — only to encounter exorbitant rental price hikes.

The Los Angeles City Attorney’s Office filed a lawsuit this week against Blueground, a short-term rental company that advertises properties across several platforms.

According to city prosecutors, Blueground violated state anti-gouging laws by jacking up the rent by more than 50% in some cases after the recent wildfires.

Blueground’s CEO refuted the claims, insisting the company complies with state laws.

According to prosecutors, Blueground marketed a North Hollywood apartment with a rent increase of over 20% and a downtown unit whose price spiked by 56% on Jan. 7.

The company claims the rent increases were due to peak travel season rates.

News of the lawsuit was reported by Bloomberg News.

The Board of Supervisors on Tuesday reaffirmed that state and county laws prohibit rental price increases exceeding 10% during a declared emergency, the Los Angeles Daily News reported.

The resolution formally implementing the increased fines is expected to pass this coming Tuesday.

Additionally, the board directed the county’s Department of Consumer and Business Affairs (DCBA) to take measures against corporate landlords using algorithmic software to manipulate rental prices.

The use of such technology has been linked to substantial rent hikes.

Several property management companies such as RealPage’s YieldStar have been reported to use algorithmic software to set rental prices.

Federal prosecutors and several states have filed suit against RealPage, alleging that its software enables landlords to share confidential information and align rents, violating antitrust laws.

Jennifer Bowcock, a spokesperson for RealPage, told The Post: “As the wildfires across California continue to devastate the region and cause terrible disruption to people’s lives, RealPage wants to express its deepest sympathies and help support local communities by reassuring them that our software can help avoid the charging of inappropriate or illegal rents.”

“All three of RealPage’s revenue management software solutions are specifically designed to allow property managers to quickly and comprehensively set rules to constrain rent adjustments or to hold rents flat in areas affected by the disaster,” Bowcock told The Post.

“Customers can apply policies and guidelines to all of their sites with one easy step, protecting residents against inappropriate rent increases and allowing them to ensure compliance with rent gouging laws in a declared state of emergency.”

RealPage posted a guide on its website to help its customers navigate the unexpected disaster events.

Other firms such as Greystar Real Estate Partners, Blackstone’s LivCor, Willow Bridge Property, Camden Property Trust, Cushman & Wakefield’s Pinnacle and Cortland have been identified as users of such software.

These firms allegedly used RealPage’s algorithm to coordinate and inflate rental prices, leading to legal action by the feds.

In response to these concerns, cities like San Francisco have enacted bans on the use of algorithmic rent-pricing software to prevent potential price-fixing and protect renters.

The DCBA has 60 days to develop a strategy modeled after a similar ordinance in San Francisco, with legal action on the table for violators.

DCBA Director Rafael Carbajal reported that the county has received 915 complaints of price gouging, with nearly 90% related to rent increases. “As the market continues to use these algorithms, it is feeding into the increases,” he said.

The Rent Brigade, an online watchdog group monitoring rental prices, conducted an analysis of listings from Jan. 7 — when the Eaton and Palisades fires ignited — through Jan. 31.

The group identified more than 2,800 instances of rent gouging across LA County. Chelsea Kirk, who testified before the board, highlighted the severity of the issue.

“Unless we prosecute and put landlords in jail for this, they won’t be stopped,” she said, noting that only two landlords have faced criminal charges in the county.

The group’s data, gathered from Zillow listings between Jan. 7 and Jan. 18, revealed that landlords and agents have been overcharging renters by an estimated $7.7 million per month — totaling an annual overcharge of $92.4 million.

Rent gouging reports surged by 5,065% in that timeframe, according to the watchdog group.

Board Chair Kathryn Barger, representing the Fifth District, which includes fire-ravaged Altadena, recounted distressing cases of displaced residents being priced out of available rentals.

“Taking advantage of people in this crisis is not tolerated by this board,” Barger stated. She described one case where a displaced resident was outbid by $3,000 above the asking rent, leaving them without a place to stay.

The fires have exacerbated an already tight housing market in LA County.

In Altadena, over 100 multifamily rental properties were destroyed.

Meanwhile, the city of Los Angeles Housing Department reported that the Palisades fire wiped out 751 multi-family units, with 75% of them being rent-stabilized.

Price gouging has extended beyond the fire zones, affecting communities miles away, according to county officials.

Some landlords are raising rents so high that current tenants are forced out, allowing them to charge double for new renters, noted Third District Supervisor Lindsey Horvath.

Jeff Torres, a local resident, shared that his friend was evicted just three days after the fires, only to find rental prices in nearby Temple City soaring — one listing showed a two-bedroom, two-bath apartment priced at $3,600.

Horvath announced her collaboration with California Attorney General Rob Bonta to strengthen enforcement at both the local and state levels.

“The fires have already displaced thousands of Angelenos. We must act urgently to protect renters, homeowners, and small businesses from skyrocketing prices,” she emphasized.

With stricter fines and increased oversight, county officials are determined to prevent opportunistic landlords from exploiting those in crisis and ensure fair housing remains accessible to displaced residents.