Malibu real estate has always been a numbers game supply and demand. With more than 500 homes burned in the Woolsey Fire, local affected residents have been scrambling to find new homes while their former houses will be repaired or completely rebuilt. This has led to a few reports of price gouging, which is illegal.
According to law, businesses cannot increase the price of vital goods and services by more than 10 percent within 30 days of a declared emergency. This includes hotels and rental housing. Contractor-related services cannot be jacked up within a 180-day period.
On Dec. 4, Malibu City Council enacted even stronger rules on price gouging, according to a recap by City Attorney Christi Hogin, speaking at the Dec. 18 council meeting.
“The council adopted an ordinance that added chapter 5.46 to our municipal code, that takes the current state law, anti-gouging laws, and extend[s] them,” Hogin said.
She added that there have been documented complaints over price gouging.
“We have gotten a couple of complaints; we’re investigating them,” the city attorney described. “This afternoon, as a matter of fact, Kathy Shin, in my office, is meeting with the district attorney to put together a taskforce so that we can expedite prosecution of any claims that we find, if we find there’s evidence that warrants prosecution.”
Council Member Skylar Peak encouraged the move.
“I’d like to see to it that the district attorney prosecutes every one of those cases to the fullest extent of the law,” Peak said.
A few fire victims have reported to The Malibu Times that they were victims of price gouging. After being burned out of their Malibu property of two decades, one couple said they were about to sign a rental agreement on another Malibu home when at the 11th hour the landlord nearly doubled the rent. Needing a place to stay quickly and with no other options immediately available, the couple found a rental in Thousand Oaks far from their child’s school. Another longtime Malibu resident reported that, just as she was about to sign a lease on an apartment, the manager decided to raise the rent $500 higher per month.
Even local real estate agents are seeing it first-hand. One local agent (who asked to remain anonymous for fear of reprisal) calls the practice “scummy and reprehensible.” Days after the Woolsey Fire, the agent, who has been selling real estate in Malibu for four decades, said he found a property for his clients who were burned out. The property was on the Multiple Listing Service before the fire at a certain price. Then, the agent said the landlord’s wife decided to double the original rental listing price. The agent called it “unconscionable profiteering.” The listing agent was also appalled and told the landlord their agency could not represent him. The property now apparently is back on the MLS at a midway increase, but still over the legal 10-percent jump and now only for short-term rental.
Malibu City Planning Commissioner John Mazza, long an outspoken opponent of short-term vacation rentals in Malibu, said he has a solution for the housing shortage in Malibu. The activist has revived his push for city council to ban short-term rentals in order to free up housing for locals in this case, especially fire victims. Mazza said short-term rentals like Airbnb with daily rates like a hotel are a way to inflate profits. “It’s a way to make prices more than they should be.”
According to Mazza, “The planning commission has already come out saying [short-term rentals are] not legal in Malibu. The city attorney, Christi Hogin, was directed to come back with a report to the council on how they can be banned. Well, nothing ever happened. It disappeared off into the woodwork.
“I’m saying, we have a fire,” he continued. “We’ve got around 500 B-and-Bs. There’s probably double that, and that’s 20 percent of our housing stock. We’ve got to act quickly and ban Airbnbs and give the people that burned out a chance to rent something. There’s no places to rent unless you’re getting gouged or there are kindly people opening up their guest houses that were never rented to their friends.”
Mazza brought his proposal up at three recent city council meetings and said he will try again.
“A lot of the people who got burned out are old locals and they’re under-insured,” the planning commissioner described. “They’re having to move to Camarillo, Oxnard or someplace else to find a place to live because they can’t afford to pay these astronomical prices that insurance companies pay and they’re never going to come back if they don’t have the money to rebuild.
“They’re going to sell,” he continued. “That’s going to directly affect our school population. The big mansions, a lot of them are second homes, but the regular old houses and people with kids here they may never return.” Mazza speculated that, with some burned out families forced out of Malibu, some properties could be sold to speculators for big profits.
“We had a disaster,” Mazza said. “We need to accommodate the people who got burned out and we don’t need to favor the tourists over the people who got burned out. There’s a council policy 13 that says the council is supposed to support the residents over other people’s economic interests and that’s Airbnb versus the regular people the citizens.”
Previously, the city council has indicated a reluctance to an outright ban, citing concerns over beach access limitations and a likely California Coastal Commission objection. No council member has publicly addressed Mazza’s renewed suggestion at any of the council meetings in December.
To report incidents of price gouging, call the Department of Consumer and Business Affairs at 800.593.8222 or go to dcba.lacounty.gov. Hogin also suggested reaching out to the City of Malibu’s code enforcement department and sending her an email.