By Mike Ives and Conor Dougherty
California Governor Gavin Newsom, along with officials from the Los Angeles City Council, has commenced actions aimed at curbing property speculation and evictions amid rising fears that the catastrophic wildfires will exacerbate the city’s housing crisis.
On Tuesday, Newsom enacted an executive order designed to restrict speculation on properties in regions where fires have either demolished or compromised homes. Council member Eunisses Hernandez later mentioned that she had put forth a motion advocating for a year-long ban on specific kinds of evictions in neighborhoods impacted by the fires.
The wildfires have ravaged thousands of buildings and forced tens of thousands of individuals from their homes. There is increasing evidence that they have initiated bidding wars and led to significant hikes in rental prices, straining a housing market that was already one of the least affordable in the nation.
These bidding wars and rising rents are occurring despite the state of emergency that Newsom declared last week, which prohibits any rent increase exceeding 10% during the ongoing crisis.
The initial segment of Newsom’s two-part executive order prohibits unsolicited offers below a property’s fair market value prior to the fires. This ban is set to last for three months. In the order, Newsom indicated that he had received reports from owners about these unsolicited offers in the past week, noting that owners in this predicament could be “particularly susceptible to exploitative actions from unscrupulous individuals aiming to profit from this calamity.”
The second segment urges California’s Department of Real Estate to examine predatory practices directed at property owners and to educate the public regarding them.
The City Council motion, introduced by Hernandez and fellow councilor Hugo Soto-Martínez, suggested a hold on evictions in residences where tenants have faced financial or health challenges due to the fires. A draft of the motion shared by local TV channel KTLA specifies that the goal was to avert a “predatory trend” of rent hikes that has been observed following past wildfires in California and Hawaii.
“It’s a heartbreaking truth that some will seek to exploit this disaster to raise rents and displace tenants,” Soto-Martínez remarked. “Even before this crisis, housing was already out of reach for the working class.”
KTLA noted that the City Council motion will likely be discussed in the council’s Housing and Homelessness Committee before it is brought back to the entire council for a vote in the upcoming weeks.
