How widespread is post-fire rent gouging? These volunteer sleuths analyzed the data

The ash hadn’t yet settled on thousands of destroyed homes when eagle-eyed tenant advocates started noticing the massive rent increases posted on a popular real estate website.

Within days of the historic fires in Los Angeles County, advocates began tracking listings for rental housing on Zillow that raised asking rents far above the 10% limit under California’s law banning post-disaster price gouging.

Now, after weeks of combing through listings (more below on the methodology), a group of volunteer rent gouging investigators has released their analysis, which they say is evidence of widespread illegal activity.

The study’s findings

Calling themselves The Rent Brigade, the group released a study Monday with their findings:

• Between Jan. 7 and Jan. 18, a total of 1,343 listings on Zillow appear to have violated the state’s price gouging ban.
• Those listings appear to have collectively sought to illegally overcharge tenants by $7.7 million per month, or $92.4 million per year.
• Rent hikes outside of legal limits were steeper on the lower end of L.A.’s housing market. The bottom quartile of listings by price saw a 46% median rent increase compared with a 27% increase in the top quartile. [Keep in mind that 10% is the post-disaster cap.]
• ZIP codes in areas including West Hollywood, Malibu and Venice had the most listings that appear to be over legal limits. But lower-income neighborhoods like Koreatown and Vermont Square also had high numbers of listings.
• Of the 1,343 listings analyzed, the study’s authors said Compass had 58 listings that appear to exceed legal increases, the most of any single real estate brokerage.

In her day job, Chelsea Kirk is a policy director with Strategic Actions for a Just Economy, an L.A. tenant rights nonprofit. She said she independently started this effort to track rent gouging by launching a crowd-sourced online spreadsheet.

“For lack of a better word, it became viral,” she said.

One alarming conclusion from analyzing all this data, Kirk said, is that more dramatic rent hikes have been happening on traditionally lower-priced housing.

“One of the most surprising things was seeing how widespread this is, not just in affluent areas,” Kirk said.

How the study came about

The Rent Brigade is a new independent collective made up of tenant advocates, web programmers, housing researchers and ordinary Angelenos. Those involved in the effort say they naturally gravitated toward working together after posts about alleged rent gouging flooded social media in the days after the fires.

Lauren Harper said they got involved after seeing an Instagram post by Kirk about her efforts to build a crowd-sourced rent gouging spreadsheet.

“I messaged her and said, ‘Hey, I think we can scrape that data,’” Harper said. “I got very quickly swept into this whole project.”

Initially, the group relied on user submissions to collect data on listings, looking for rentals where rates were increased above legal limits. By Jan. 15, tech savvy volunteers with The Rent Brigade had built a tool to systematically scrape data from Zillow listings in L.A. County.

Kirk said more than 150 volunteers have now contributed to this work.

“I've been fielding a lot of questions about who's responsible for this spreadsheet,” Kirk said. “We're just a group of people. But what connects us is that we're all Angelenos and we're really pissed off about what we're seeing in terms of rent gouging being rampant across the city in the wake of the wildfires. And we're committed to doing something about it.”

How the data was gathered

Monday’s study combines user submissions that have been filtered along with that scraped data to conclude that 1,343 listings appear to have broken the state’s price gouging law in one of two ways.

• Either the listings had increased their pre-fire asking rents by more than 10% in the days after the fires
• Or they newly came on the market after the fires at more than 160% of the area’s Fair Market Rent as determined by the U.S. Department of Housing and Urban Development

The study found 442 listings that increased pre-existing rents by more than 10% after the fires. But the majority (901 listings) were new listings that violated the Fair Market Rent threshold.

“There’s a question about all of these empty listings that are suddenly coming onto the market,” Harper said. “We're really interested in using this data set for further questions about vacancy rates in Los Angeles and getting a better picture of what's happening in the rental market.”

The study’s limitations

The study comes with some important caveats. Without a detailed investigation of each listing, it’s impossible to be certain that they all violated the law. Zillow users can sometimes misclassify or inaccurately input data for their listings, the study’s authors note.

In response to LAist’s questions about the study, Zillow representatives said they have already taken down many listings that appear to have illegally raised rents.

In an emailed statement, a company spokesperson said, “We believe it is essential for housing providers to follow local housing rules, including consumer protections against price gouging during and following a natural disaster, and we are providing resources to help them understand their responsibilities.”

LAist reached out to Compass to ask about the study’s findings, but we have not yet received a response.

Anne Russell, president of the Greater Los Angeles Realtors Association, said in an email to LAist, "Our association fields calls every day from our members with questions about the price gouging law to make sure that they are complying with both the letter and the spirit of the law. Realtors have a duty under the law and the Realtor code of ethics to not partake in rent gouging, and we would encourage anyone who feels that they are encountering price gouging in the market to report it to the Attorney General or the relevant authorities.”

What’s next for anti-rent gouging efforts

Prosecutors have started enforcement of the state’s price gouging laws.

Last week, California Attorney General Rob Bonta filed criminal charges against an L.A.-area real estate agent over alleged rent gouging for a La Cañada Flintridge home, allegations the agent strongly denied. The listing at the center of that case was on The Rent Brigade’s spreadsheet. Bonta has said more investigations are in the works.

Kirk said it’s not clear that threats of enforcement are deterring landlords and agents. Even after prosecutors pledged to crack down, the study finds that listings appearing to break the law grew, with the most of any single day posted on Jan. 16 — more than a week after the fires broke out.

“I kind of expected that it would be curbed — that we would see it kind of taper off,” Kirk said. “But I'm actually feeling like people are learning, oh, I can do this.”