SoCal Agent Hit With Price Gouging Charge, Law Limits Rents

Attorney General Rob Bonta has filed the first price-gouging charges related to the fires, accusing La Cañada-Flintridge real estate agent Mike Kobeissi of raising the monthly rent on a property by 38 percent, the Los Angeles Times reported.

Kobeissi allegedly jacked up the rent to $12,000 from $8,700, after a couple displaced by the Eaton fire applied to rent it.

California law prohibits rent increases exceeding 10 percent following a natural disaster.

Kobeissi denied the allegations, arguing the price reflected market value in the area. He emphasized that the property is now rented below market rate to fire victims.

Meanwhile, real estate agents and landlords argue that price-gouging restrictions are inadvertently worsening the housing crunch following this month’s firestorms, which burned more than 11,000 homes and led to a surge in demand for rental properties, according to the Times.

Under state law, newly listed properties cannot charge more than a federally determined cap, currently $9,554 per month in Los Angeles County, unless rented within the past year. Some say this limitation is keeping high-end homes in L.A.’s upscale neighborhoods, where rents often exceed $10,000 a month, off the market.

“These laws are working to prevent a lot of this supply from coming online,” Tyler Morant, a Manhattan Beach real estate agent, told the Times, adding that many affluent families displaced by the fires are struggling to find needed housing.

Reports of bidding wars and widespread price gouging have compounded the crisis.

Activists and officials have identified hundreds of alleged violations, with Bonta’s office sending over 500 warning letters to landlords and operators accused of gouging. Violators face fines and possible jail time.

The state’s balancing act between protecting vulnerable fire victims and maintaining rental supply is drawing scrutiny, as calls grow to reassess laws impacting high-end rental markets during emergencies.

“This is a housing crisis within a crisis,” Bonta said. “We will hold those exploiting disaster victims accountable while ensuring families have access to safe, affordable housing.”

— Dana Bartholomew