LA to Consider Rent Freeze and Eviction Ban After Fire

Los Angeles landlords may be barred from raising rents or evicting tenants impacted by the weeklong fires that torched thousands of homes.

To counteract illegal price gouging, L.A. City Councilmembers Eunisses Hernandez and Hugo Soto-Martínez introduced a motion to restrict rent hikes for a year, Bisnow reported. A timeline for the pending measure was not disclosed.

An estimated 12,000 structures burned up in the Palisades and Eaton fires, mostly single-family homes. The loss has launched a tide of renters into a city burdened by a housing crisis.

“Los Angeles is already in the midst of a housing and homelessness crisis — we cannot allow bad actors to take advantage of this catastrophe by price-gouging working class tenants,” Hernandez said.

“If we don’t take immediate action, we will see a second wave of disaster as rents and evictions skyrocket in a market that is already one of the least affordable in the nation.”

Many of the homes burned in Pacific Palisades, Malibu, Altadena and east Pasadena were valued in the millions and the tens of millions.

But demand-driven cost increases are expected to impact renters in lower income brackets, according to Bisnow. This, combined with reports of price gouging, factored into why the council members introduced the rent-freeze motion.

“It’s an unfortunate reality that people will try to use this crisis to raise rents, evict low-income tenants and take advantage of this horrific situation in pursuit of profit,” Soto-Martínez said in a statement.

Daniel Yukelson, CEO of the Apartment Association of Greater Los Angeles, pushed back against the idea of returning to policies that harken back to the pandemic.

“While all of us are dealing with trying to provide assistance during this emergency, to now take such drastic actions by re-instituting COVID-era emergency rent freezes and eviction moratoriums would be counterproductive and merely dissuade housing providers from making their rental units available,” Yukelson told Bisnow in an email.

A list of potential price-gouging compiled by Los Angeles Tenant Union member Chelsea Kirk added up to 600 submissions in two days, despite an anti-price-gouging law passed in 2018.

The law forbids landlords from raising rents by more than 10 percent in emergencies, but enforcement relies on tenants and housing advocates reporting the practice to authorities.

The Los Angeles County Department of Consumer and Business Affairs received about 200 complaints of jacked-up rents since the fires.

A note from Alexander Goldfarb, analyst with stock brokerage Piper Sandler, stressed “elevated demand” for West L.A. apartments, offices and warehouses for the next few years.

Goldfarb said a rent freeze and eviction moratorium could further drive institutional capital out of Los Angeles. Investors have hesitated to spend money on Los Angeles apartments since the pandemic, put off by outmigration from the market and Measure ULA, the city’s transfer tax.

Yukelson, of the L.A. landlords group, advocated for cooperation among agencies and residents, while highlighting landlords’ concessions, including rental discounts, no security deposit requirements and free application processing and credit screening.

California’s price gouging rules kick in after declared states of emergency and last for 30 days, unless they are extended, according to the Los Angeles Times. Rent increases are capped at 10 percent.

California Attorney Gen. Rob Bonta has vowed to drop the hammer on violators. If convicted, landlords face up to a year in jail and thousands of dollars in fines.

Deb Carlton, executive vice president with the California Apartment Association, said reports of widespread gouging were “maddening,” and advocated for strict enforcement of the law.

“Throw the book at them,” Fred Sutton, a senior vice president with the association, told the L.A. City Council.— Dana Bartholomew