'Million Dollar Listing' stars warn against illegal price hikes in LA real estate market

Josh Flagg and Josh Altman of "Million Dollar Listing" are already working to assist the victims of the Los Angeles fires in navigating the real estate market after losing their homes.

In an interview with Planet Chronicle Digital, Flagg discussed the issue of illegal price gouging in the rental and housing market.

Flagg stated that while he is not certain about the specific laws, there are legal repercussions for price gouging. For instance, if a house was previously listed for sale and then its price was increased five times during a natural disaster, this action is illegal.

So, what people are doing and, to not do it illegally, is taking advantage of the fact that people who were not marketing their homes before are now doing so because you can ask whatever you want for a house. However, if a natural disaster happens, you can triple the price, which is the problem.

In Pacific Palisades and Altadena, homes have been destroyed due to the ongoing fires in Los Angeles County, as reported by Cal Fire.

"Well, the thing is, you know, I don't know the exact laws, but there are legal consequences for price gouging. For example, if the house was on the market prior to this happening, and then you just raise it five times the price during a natural disaster, that's against the law." — Josh Flagg

Over 12,000 homes, businesses, and schools have been destroyed by the fires, and more than 100,000 individuals have been displaced.

Flagg states that there is a shortage of inventory in Los Angeles to accommodate all the displaced individuals.

Open houses with long lines of people are a result of limited inventory. Many of my clients own investment properties, which means they fill up these properties. However, it's important to note that these people are not homeless and will not be on the streets.

Currently, the situation is quite terrifying. However, in the end, there will be a place for everyone to go. Despite the chaos and confusion, it's like any disaster. Initially, it's a nightmare, but eventually, everything falls into place. But it's not enjoyable while waiting.

Josh Flagg, star of 'Million Dollar Listing,' warns against illegal price gouging.

Josh Altman, Flagg's former "Million Dollar Listing" co-star, stated to Planet Chronicle Digital that the housing market in Los Angeles is "insanity" following the fires.

"It's far worse than you could ever imagine," he said. "My friends and those in the police force I'm friends with who have toured it say it's something you have to see to truly comprehend. And it's a hundred times worse in real life than you can imagine by just watching it on TV, the internet, Instagram, or TikTok."

Since the election, the real estate market has been "a little quiet," but it started to pick up before the fires. Now, there are thousands of people in the market, not by choice.

Altman stated that the inventory is limited, and now there are over a thousand new individuals in the market, whether they are purchasing or renting, depending on their financial and family circumstances.

WATCH: Josh Altman calls aftermath of Palisades Fire 'madness'

It will take two years to build a house and another year to obtain permits. After that, you will have to live among 10 other houses on the street that are being developed, which may not be ideal for you and your children.

Across the board, people are choosing to buy a house and sell the land instead of renewing their three-year lease. This is because their kids are growing up and will be in different schools by the time the lease expires. They are opting to use the insurance money to invest in a new home.

Jason Oppenheim and Ben Belack wrote a letter to Gov. Gavin Newsom and Los Angeles Mayor Karen Bass, urging them to make "practical changes" to the current California laws that impact displaced individuals.

Oppenheim and Belack requested that the California Fair Plan Insurance increase their coverage to $6 million and include liability insurance. Additionally, they requested that individuals who have lost their homes and are looking to sell their land be exempt from the mansion tax (ULA transfer tax).

Josh Flagg claims that the housing market in Los Angeles is experiencing a shortage of inventory due to the fires.

The property taxes for any properties affected by fire should be paused until they are rebuilt or immediately re-assessed at land value, as requested.

The letter signed by Oppenheim and Belack received 48 endorsements, including those from Altman and Umansky.

The Agency, founded and led by Umansky, is a real estate and brokerage firm primarily based in Southern California, and they have been actively working to secure housing for their displaced clients residing in areas such as Pacific Palisades. Additionally, Umansky is known for his role in the Netflix reality series "Buying Beverly Hills."

He said 25 staff members and agents there have also lost their homes.

"He stated that dealing with the fires has been extremely challenging, as they have offices in the areas where everything is happening, including the Altadena Fire, Pacific Palisades Fire, Malibu Fire, and many clients, colleagues, friends, and family members affected by the fires. The most devastating aspect is the complete loss of homes and the displacement and evacuation of people, making it impossible for them to return home."

Finding a place to stay is the most challenging task for homeless people, as he stated.

He stated that they make a living by doing this, while also urging landlords not to exploit the dire circumstances.

"People have been wanting to be helpful for the most cases," he added, emphasizing the positive aspects of humanity.

Pacific Palisades will require years to recover from the fire, according to 'Million Dollar Listing' star Josh Altman.

During the crisis, his team has also considered ways to increase housing availability.

"A shortage of housing, specifically short-term housing and rentals, is expected to occur. In response, developers in Los Angeles have been asked to consider converting vacant homes and unsellable condominiums into short-term rental properties."

He mentioned that they have been discussing with staging companies ways to furnish homes more quickly.

The Agency is also helping clients file claims with their insurance company.

Realtor Jason Oppenheim discusses his efforts to assist those impacted by the California fires.

"These individuals are facing significant challenges with their thoughts and mindset, which is affecting their ability to think clearly. They are anxious and the calls they make are intense. We are doing our best to provide them with as much support as possible and to be empathetic during this difficult time."

They have a significant customer base in the affected regions and are working with the real estate industry.

"He stated that the focus of the initiative was not on comparing individuals or determining superiority, but rather on bringing everyone together to benefit the community in which they reside. As such, they were partnering with all real estate agencies in a collaborative effort to improve the community."

Those with available guest houses or spare rooms can assist in the crisis by accommodating people.

"A large number of individuals are currently searching for homes, resulting in a competitive market with numerous applicants for the same properties. It is crucial that no one takes advantage of the situation, as humanity has generally been kind so far."

Planet Chronicle Digital's Emily Trainham contributed to this report.