In Los Angeles' high-end rental market, it's long been the norm to find homes advertised for $10,000 a month or more.
But in the wake of this month's devastating wildfires in Pacific Palisades and Altadena, even as wealthy, displaced families look for places to go, new listings beyond that have been effectively blocked by state law.
The price cap also puts prospective landlords off the market for displaced families to offer, local real estate agents and brokers say, making it even tighter for people looking for a home. More than 11,000 homes have been confirmed destroyed in the fire Widespread inflation And Bidding wars Small quantities of available rental inventory are quickly snapped up and followed.
Palisades residents looking for rental housing elsewhere in Los Angeles would have been pressed for below-limit options compared to the homes they lost before the fires. Last year, two dozen four-bedroom homes near Manhattan Beach rented for a median price of $16,000 a month, according to data from the multiple listing service.
“These people are used to a certain standard of living,” says Tyler Morant, a Manhattan Beach real estate agent. “They go to markets that have that standard of living. But these laws work to prevent access to the Internet.
California's rate hike law limits rent increases after natural disasters. Landlords are prohibited from raising rent by more than 10% for properties leased or listed in the previous year.
There is a separate regulation in the Act for properties that were not in the market before. Potential landlords cannot charge more than a certain percentage A federal rent payment standard. While the amount varies by neighborhood and the number of bedrooms per unit, the highest allowable price for a newly listed property in Los Angeles County is $9,554 per month, according to a Times calculation. Federal data.
Nearly 1,400 homes and apartments in the county were listed on Zillow Wednesday for rent above that amount. If the units have been in the market within the last year and have not increased in price by more than 10%, they will be allowed at that price under the law. If they are new offers, they won't be.
That's even if the prices are higher for previously listed properties. In Tarzana, a landlord is asking $17,500 a month to rent a 3,000-square-foot home with a pool and views of the Santa Monica Mountains, up 9.4% from the December offer price, according to Zillow. Eleven miles away in Chatsworth, a 3,350-square-foot English Tudor-style home is on the market for the first time on Zillow for $11,900 a month.
Violators of price-gouging laws could face criminal penalties, says California Atty. Gen. Rob Bonda announced Wednesday First rate hike fee In connection with the fires, La Cañada accused a Flintridge real estate agent of inflating the listing price of a rental home by 38%. Amid bidding wars, the Attorney General warned landowners qualifies as price gouging.
Many of Morand's clients and acquaintances, including empty-nesters with other places to stay and property owners with empty vacation homes, told him they were considering putting their homes on the rental market in the past two weeks. But he advises them not to do so because of financial and legal risks.
“We tell them it's not worth it,” Morant said.
Prior to 2018, state law had no price limits for homes that were not on the rental market prior to a natural disaster.
After the Tubbs Fire destroyed 5,000 homes in Sonoma County, the district attorney complained there was nothing he could do to govern. New rental ads are sky high. Lawmakers wanted to tackle the problem.
Interest groups negotiating price standards for new listings have settled on 170% of rents set by the U.S. Department of Housing and Urban Development for a certain unit size and neighborhood, said Deb Carlton, executive vice president of the California Apartment Assn. , who was part of the discussions. The HUD statistic, based on Census data for typical apartment rents in an area, is used to ensure that landlords cannot overcharge low-income residents with housing choice vouchers. An amendment to the Act tightened price controls for properties already in the market. Passed by both Houses of Parliament Only a few votes against.
“No one expected us to have very wealthy people who needed big houses,” Carlton said.
When natural disasters hit and demand increases, the government should encourage the provision of homes that were previously vacant as vacation homes or Airbnbs or long-term rentals, said Shane Phillips, manager of the Randall Lewis Housing Initiative at UCLA Lewis. Center for Regional Policy Studies.
He estimated that potential landlords could be holding back homes in the “high hundreds to low thousands” because of the new listings' price limits. That amount is small enough to affect L.A.'s overall rental market, but makes it harder for displaced people to find housing, he said.
“Every home counts,” Phillips said. “It's important. No matter how fancy it is, someone from the Palisades can afford it.
A spokeswoman for Ponta said the attorney general's office would continue to enforce the price-gouging law and deferred questions about the policy implications to Gov's Newsom and state lawmakers.
“Broadly speaking, especially during a state of emergency, we continue to believe that we should do everything we can to accommodate our fellow Californians,” the spokeswoman said.