County Mulls $50,000 Penalty For Price Gouging Fires' Aftermath

LOS ANGELES, CA — The Los Angeles County Board of Supervisors directed the Office of County Counsel Tuesday to draft a resolution to increase the penalty for price gouging to a maximum of $50,000 per violation.

The resolution is expected to return for a full vote at the board's next meeting Feb. 11.

Supervisor Lindsey Horvath, who introduced Tuesday's motion, said the recent LA County wildfires burned more than 16,000 structures, many residential, and displaced tens of thousands of people.

"Price gouging laws have been in effect limiting the amount of money that can be charged for goods and services including rent," Horvath said, "Yet, there are bad actors who are taking advantage of this crisis."

She cited a study by Rent Brigade that found thousands of potential violations, including in areas not affected by fires, in just the first 11 days since the blazes broke out Jan. 7.

Board Chair Kathryn Barger, who co-authored to the motion, said she has witnessed a disturbing trend of price gouging in the area preying on the most vulnerable communities. Barger called the motion a "bold action."

Horvath stressed the measure would protect people from falling into homelessness.

The County Counsel was also authorized to consider initiating or joining existing litigation regarding price gouging and price fixing algorithm software used by housing websites.

Supervisor Holly Mitchell said the rent-fixing algorithms were predatory and compared it to red-lining practices that kept minorities from buying homes for decades.

"What really frankly pisses me off is when we look at the predatory way in which the electronic algorithms are used ... rent hikes outside of legal limits were steeper on the lower end of LA's housing market," Mitchell said.

"So it's almost red-lining that the algorithmic technology is preying on those who can least afford the rent hike and probably preying on geographic areas where affordable housing is most likely to be."

The county CEO was asked to draft a board letter requesting online housing applications, including Redfin, Zillow, Apartments.com, AirBnB, and VRBO, post a banner on their website about the county's state of emergency and price-gouging laws in effect.

The providers would also be asked to preserve rental price history for properties listed and removed from the platform for 30 days prior to the emergency declaration and through its duration.

Separately Tuesday, the board expressed support for a proposed state bill by Assemblyman Isaac Bryan, D-Los Angeles, that would freeze rental rates in the county and establish a $10,000 penalty for price gouging until January 2026.

City News Service