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Concerns of price gouging after L.A. wildfires at Cal Poly

SAN LUIS OBISPO, Calif. - A Cal Poly business professor is raising caution flags about housing, rental rates, and price gouging as people begin moving forward after the destruction of the L.A. wildfires.

Cal Poly professor Daniel Scheitrum says the cost of housing is about to go up due to the fires.

“The Palisades fire and the other fires disrupted housing, displaced a lot of people. They were looking for other places to rent. And we noticed that prices were increasing for rental properties, hotel rooms, short term vacation rentals, and that's prohibited by law,” says Prof. Scheitrum. 

He cautions that California has restrictions on how much rent can increase when a state of emergency is declared.

“Those are referenced on the US housing and Urban Development's Fair market rents, which are published by ZIP code. You can look them up,” says Prof. Scheitrum. 

The domino effect starts with those displaced by the Los Angeles fires, as they look for a new home, or temporary lodging while they rebuild. 

“This is nothing new, but now we have the Bay Area and people from L.A. searching for housing. But I mean, who wouldn't want to live in SLO?” says Cal Poly student Dominic Cipolla.

Professor Scheitrum says we are already observing an influx of people from Los Angeles seeking to purchase and rent homes on the Central Coast, and that this will make it more difficult for students to find housing this summer.

“Yesterday the attorney general of California issued 200 warnings about price gouging to people listing properties for sale. It's something to keep in mind, and it's being actively addressed by the attorney general,” says Prof. Scheitrum. 

While housing costs will rise due to more people competing for limited housing, price gouging is when sellers go beyond the fair market value. 

Professor Scheitrum recommends to look up fair market pricing on the website for Housing and Urban Development if you have property to list.

And students are encouraged to begin looking for summer housing right away.

“I know LA County is a pretty expensive I mean, up here is expensive, but, you know, if they need housing, they obviously have a right to housing up here. And any way we can help them, you know, I totally believe in that scenario,” says Cipolla.

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Jarrod Zinn

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