LA Real Estate Agent Hit With First Price Gouging Charges After Fires

A real estate agent in Los Angeles County is the first to face criminal charges for price gouging following the devastating wildfires that ravaged Southern California this month.

The state’s attorney general, Rob Bonta, said California authorities are “making good on our promise to hold price gougers accountable, with more to come,” the Los Angeles Times reported.

Newsweek contacted Governor Newsom’s office, the California Attorney General’s Office, and real estate agent Mike Kobeissi for comment via email on Thursday morning.

Why It Matters

The brutal wildfires that broke out on January 7, including Palisades and Eaton, have burned tens of thousands of acres and destroyed thousands of structures, leaving many homeless. Experts estimate it might be the biggest wildfire insured loss in United States history.

The displacement of thousands of Californians affected by the fires has caused demand for rental units in Los Angeles County to skyrocket at a time when inventory remains low statewide and has likely been decimated by the fires.

Officials have warned real estate agents, property managers, and landlords against taking advantage of the situation by increasing rent beyond what could be considered reasonable.

What To Know

Under California law, price gouging—increasing the price of goods, services, and commodities much higher than what could be considered reasonable or fair—is illegal in certain circumstances. During an emergency, businesses in the Golden State can increase prices by up to 10 percent over the previously advertised price, but no more.

The asking price for rentals not previously advertised cannot exceed 160 percent of the fair market rent (FMR) established by the U.S. Department of Housing and Urban Development (HUD). This depends on the bedroom size of the rental unit.

An emergency was declared in California on January 7, when the fires started. On January 12, Governor Gavin Newsom signed an executive order that extended laws “prohibiting price gouging in times of emergency” until January 7, 2026, in Los Angeles County.

Those violating the law can receive a fine of up to $10,000 and/or be sentenced to a year in county jail.

Who’s Being Charged?

A Justice Department investigation revealed that real estate agent Mike Kobeissi tried to rent out a home in La Cañada Flintridge, in Los Angeles County, to a couple who had lost their home in the Eaton fire at a rental price that was 38 percent higher than advertised before the fires. The couple decided against renting the home because of its cost.

Kobeissi said in an interview mentioned by the Los Angeles Times that the price increase “had nothing to do with the fires or anything.” According to the real estate agent, the price increased from $8,700 to $12,000 a month after confirming that the property was within the boundaries of the prestigious La Cañada Flintridge school district.

“Right now, the home is rented away below the market,” Kobeissi said, adding that the owner offers a free month of rent and furniture and has decided to rent the property out for less than $10,000 to victims of the wildfires.

On Wednesday, Kobeissi became the first person charged for price gouging after the Los Angeles fires. He’s facing one misdemeanor count of price gouging.

What People Are Saying

California Attorney General Rob Bonta, in a release: “May this announcement serve as a stern warning to those who would seek to further victimize those who have lost everything. [The] Department of Justice is aggressively and relentlessly pursuing those who are trying to make a quick buck off someone else’s pain.”

Los Angeles County Sheriff Robert Luna, at a press conference on January 12: “Anyone taking advantage of anyone who’s been victimized already, whether it is burglary, looting, or any other crime, whether it’s a scam of some kind that you’re conjuring up to make money off of the poor people that have been involved in this.”

Zillow, in a statement shared with media earlier this month: “If renters see a potential violation, we encourage them to report the listing to Zillow and California authorities. 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.”

What Happens Next

More charges for price gouging in the Los Angeles County rental market will likely follow that against Kobeissi. An analysis of data obtained by ABC News this week found nearly 400 listings with prices that have skyrocketed since the fires struck the region.