Los Angeles City Atty. Hydee Feldstein Soto has sued the apartment behemoth Blueground US Inc., alleging the provider of furnished rentals engaged in multiple instances of price gouging in the wake of the region’s fires.
Under a state of emergency, landlords and their representatives are generally barred from raising rent more than 10% above what they charged or advertised before the fires broke out Jan. 7. The restrictions expire March 8 unless extended.
In its lawsuit, announced Tuesday, the city attorney’s office cited more than 10 cases in which it alleged Blueground engaged in price gouging, including at one apartment in downtown Los Angeles where the company raised rent more than 30%, from $4,140 a month to $5,400.
Blueground denied the company broke the anti-gouging law and said most of the listings cited by the city attorney were for future dates that weren’t subject to price gouging restrictions.
“We are heartbroken by the devastation caused by the recent wildfires in Los Angeles and the surrounding areas,” Blueground spokesperson Jamie Goldstein said in a statement. “We are working closely with the City Attorney’s office to provide additional information and to clarify any concerns, and will continue to revisit our pricing model until the housing crisis in LA subsides.”
Blueground is not a typical apartment company, and its offerings can be ideal for people who lost their homes in fires and don’t want to purchase a new couch and bed. Blueground leases units from property owners, furnishes the apartments and then rents the units to tenants and businesses that need long-term housing for their workers.
Its website says Blueground operates worldwide, though it’s unclear whether the entity the city attorney sued, Blueground US Inc., is only an American subsidiary.
“It is not only unconscionable for Blueground to take advantage of Angelenos when they are at their most vulnerable, it is illegal and must stop immediately,” Feldstein Soto said in a statement.
The action announced Tuesday is the latest authorities have made since widespread reports of price gouging became known after the fires.
The California attorney general’s office has filed at least two criminal cases against L.A.-area real estate agents. Some real estate listings firms such as Zillow also have moved to take down listings in which rent was raised beyond the 10% threshold.
In addition to the civil case filed against Blueground, the city attorney’s office also announced Tuesday it filed criminal charges against a homeowner and her real estate agent for alleged price gouging.
The real estate agent and his attorney said the listing at question was removed once the agent learned of the price gouging rules and it was never rented at that price.
