California Governor Gavin Newsom issued an executive order on Tuesday, January 14th, to restrict predatory real estate transactions in areas recently devastated by deadly wildfires. Within a three-month period, unauthorized and undervalued property purchases are banned in areas heavily impacted by disasters, including Altadena in Los Angeles County.
During a meeting with leaders in Altadena, Newsom signed the order, stating, “I have personally heard from community members and victims who have received predatory offers from speculators, well below market value, some even while their homes were burning.”
In a video posted on X, Newsom expressed, “This is disgraceful. We will hold these individuals accountable.” According to the California Department of Forestry and Fire Protection, the Eaton Fire has destroyed 4,627 homes and structures, with 486 others damaged.
The order covers zip codes 90019, 90041, 90049, 90066, 90265, 90272, 91001, 91104, 91106, 91107, 93353, and 93536. Purchasing or acquiring property rights in these areas at a price lower than the fair market value on January 6th (the day before the fire occurred) will be considered a violation of the order.
Under California law, violating a governor’s order during a state of emergency is a misdemeanor and can be prosecuted by the Attorney General or local district attorney’s office. Newsom urges residents to report violators at oad.ca.gov/report. The executive order notes that individuals affected by the fires, especially property owners, may feel vulnerable, uncertain, and particularly susceptible to exploitation by speculators.
Newsom also directed the Department of Real Estate and other state agencies to publicize the legal rights of the public, information resources, and contact information for enforcement agencies responsible for implementing the order.
The order has received mixed reviews on social media. Real estate trader and marketer Mark Valorian described it as “good policy,” despite considering himself a supporter of the free market. Valorian stated on Tuesday that after much consideration, he believes this measure can “protect high-risk individuals from exploitation at a relatively low cost.”
Marc Joffe, president of the Contra Costa Taxpayers Association, holds a different view, calling the order “very bad.” In a post on X on Wednesday, he sarcastically noted that if these houses were sold at lower prices, California’s Proposition 13 would lock in the undervalued assessment, reducing local government revenue.
Joffe commented, “These properties have already lost value, and some owners undoubtedly need cash. Under this order, they may not even be able to get $1 rounded down to 95 or 99 cents.”
Newsom’s office stated that the Altadena area, located about 15 miles east of Los Angeles, was severely impacted by the Eaton Mountain Fire, affecting mostly working-class families. As of Thursday afternoon, the Eaton Fire had burned 14,117 acres of land with a containment rate of 55%.
Recovery and enforcement teams, including the county coroner’s office, are still actively searching for residences destroyed in the fire. As of the 15th, officials have reported 16 fire-related deaths and 6 injured firefighters linked to the Eaton Fire.