Skyrocketing Prices Post-Disaster? Know Your Rights Against Illegal Gouging

The recent fires in greater Los Angeles have left tens of thousands of homes in ruins and made numerous neighborhoods completely unreachable, making housing one of the most urgent concerns for local residents.

Following the destruction, “we observe some individuals exploiting the situation to turn a profit,” explained Natalie Maxwell, the managing attorney at the National Housing Law Project. “This kind of behavior is not uncommon following disasters. It tends to repeat itself.”

Therefore, it’s crucial for anyone renting or looking for a new place to live to be aware of their rights. It is unequivocally illegal to hike up housing prices in the aftermath of a disaster. Here’s an explanation of what this entails and the specifics that Californians should understand.

The LA Fires Are Declared a Disaster

A “disaster” is officially declared by the governor, the president, or a local authority. The “Los Angeles County Fires and Windstorm Event” has been recognized as such. California keeps a list of regions designated as disaster areas where price gouging is prohibited. Under California law, Penal Code 396 specifically bans price gouging.

Understanding Price Gouging

Price gouging is defined as increasing the rent, or the cost of other goods and services, by more than 10% compared to the most recent price. Current tenants will be aware of their ongoing rent rates, but newcomers seeking housing might find it more challenging to determine these rates, noted Lila Gitesatani, a staff attorney at NHLP.

Excessively high rents can be a warning sign, Gitesatani mentioned. Alternatively, you might conduct some preliminary research to uncover the latest rental price of the property or the rates for other similar listings.

Actions to Take Against Price Gouging

If you encounter price gouging, you can report it to the attorney general’s office, suggested Gitesatani. Local legal support organizations might also provide assistance. Some localities may enforce even stricter regulations against price gouging and offer enhanced protections for tenants and consumers than those mandated at the state level. You might reach out to organizations like Neighborhood Legal Services of Los Angeles County or the Legal Aid Foundation of Los Angeles for help.

Considering an Eviction Moratorium

Penal Code 396 also explicitly forbids evicting tenants to rent the property to someone else at a higher rate, but lawmakers might think about implementing more robust eviction protections, Maxwell suggested.

In the chaotic aftermath of a disaster, pausing evictions provides residents a chance to plan their next moves,” she explained. “It’s a critical legal safeguard that helps maintain normalcy while allowing government and community support to assess the situation, assist the affected population, and ease the pressure on the already strained housing market caused by the destruction of homes.”

This measure is especially significant as many residents in the LA area might face prolonged periods of lost income.