California Atty. Gen. Rob Bonta accused real estate agent Iman Shaghyan this week of increasing the price of a Beverly Hills rental by more than 30% in the days after the Jan. 7 fires. It’s the fourth charge Bonta has filed since price-gouging rules went into effect that prohibit rent hikes of more than 10% after a natural disaster.
“Profiting off Californians’ pain through price gouging is illegal and I will not stand for it,” Bonta said in a news release.
In the weeks after the fires, city officials vowed to crack down on violators as thousands of complaints poured in, with some organizers even compiling spreadsheets documenting the skyrocketing rents. Bonta enlisted teams of lawyers to evaluate complaints, and his office has primarily targeted real estate agents.
But some critics claim that government officials aren’t doing enough to address the rampant price gouging that appeared across the region in the wake of the fires, saying that the charges filed represent only a small fraction of the complaints submitted to the city and state.
“More needs to be done,” said Chelsea Kirk, co-founder of the activist organization the Rent Brigade. “It’s been de-prioritized, and all discourse from elected officials and the press around rent gouging has ended.”
Kirk’s organization checks Zillow for examples of price gouging and said there are currently more than 10,000 active listings that qualify. Her team submits weekly reports to government officials but said transparency is a problem since no one knows exactly what is being investigated.
As a result, her team worked with L.A. City Councilmember Hugo Soto-Martínez to draft a motion that, if passed, would require L.A. City Atty. Hydee Feldstein Soto to produce monthly reports detailing the total number of price-gouging complaints received, response times and enforcement actions. The motion has been introduced but not yet placed on the agenda.
“There’s an utter lack of urgency,” Kirk said.
In addition to Shaghyan, Bonta filed charges in January against La Cañada Flintridge agent Mike Kobeissi and Glendale agent Lar Sevan Chouljian. In February, he charged Hermosa Beach agent Willie Baronet-Israel as well as Edward Kushins, the landlord of the property.
All four cases are active. If convicted, the maximum penalty for the misdemeanor could result in a year in prison and a fine of $10,000.
In addition to the charges, state Department of Justice officials said they have sent out more than 750 warning letters to hotels and landlords accused of price gouging. The department also is investigating fraud, scams and low-ball offers on burned properties.
Bonta is investigating on behalf of the state and Feldstein Soto is filing lawsuits on behalf of the city. So far, she’s been targeting more than just real estate agents.
In February, Feldstein Soto’s office sued rental giant Blueground, citing more than 10 cases of price gouging. In one instance, Blueground allegedly jacked up the rent of a downtown L.A. apartment by 56% on Jan. 7, the day of the fires.
In March, Feldstein Soto’s office sued a group of homeowners and companies for $62 million, citing not only price-gouging violations but also violations of the city’s short-term rental ordinance, which places restrictions on rentals such as Airbnbs. The group of defendants included four homeowners and five limited liability companies: Akiva Nourollah, Micah Hiller, Haim Amran Zrihen, Rachel Florence Saadat, Hiller Hospitality, Hiller Hospitality Group, 1070 Bedford, Red Rock and Coastal Charm.
The Times reached out to all the individuals charged with price gouging or short-term rental violations — except for Zrihen and Saadat, whose contact information could not be located — and did not receive any on-the-record responses.
In the first few weeks after the fire, Feldstein Soto’s office issued more than 250 cease-and-desist letters to owners, landlords and property management groups based on price-gouging tips.
Price-gouging rules are set to expire July 1.
