Speculators hit with warning from California governor

California's governor issued a new executive order on Tuesday, seeking to protect Los Angeles wildfire victims from speculatory investors.

Citing reports from local residents of investors appearing in affected communities and proposing cash deals to purchase the land their homes once sat on, Gov. Gavin Newsom announced a 90-day ban on unsolicited offers.

"As families mourn, the last thing they need is greedy speculators taking advantage of their pain. I have heard first-hand from community members and victims who have received unsolicited and predatory offers from speculators offering cash far below market value — some while their homes were burning," Newsom said. 

The prohibition applies to 15 ZIP codes throughout the Los Angeles area, many located in the racially diverse community of Altadena. Several reports of land speculators came from Altadena businesses and homeowners, who were especially hard hit by the Eaton Fire. 

"We will not allow greedy developers to rip off these working-class communities at a time when they need more support than ever before," Newsom said. 

Violators of the order face misdemeanor prosecution and will be subject to penalties of as much as six months in prison and a fine of $1,000. The governor noted the need to protect not only financial interests of fire victims but also the history in stricken communities. 

The fires "destroyed entire neighborhoods and communities, uprooting families that have called these places home for generations, destroying businesses that owners have struggled and sacrificed to build and disrupting community ties that cannot be easily re-established," the governor said.

Newsom's directive was modeled after a similar order introduced last year in Hawaii in the wake of the Maui wildfire. Hawaii Gov. Josh Green vowed to protect local and cultural interests from exploitation after destruction of the town of Lahaina and nearby communities in August 2023. 

After flames first erupted in the Los Angeles area on Jan. 7, several different fires have engulfed over 40,300 acres as of late Tuesday, with sparks carried by fierce Santa Ana winds. Approximately 12,300 structures have been either destroyed or damaged, according to Gov. Newsom's executive order. 

The Eaton and Palisades fires, both still less than half contained, now rank as the two most destructive in Southern California history, state officials said.  

The latest announcement comes days after Gov. Newsom issued a separate executive order aimed to ease rebuilding efforts in areas hit by this month's devastation. In the announcement issued Sunday, the state said it will temporarily suspend review and permitting processes currently in place to quickly allow for redevelopment. 

The state's initial emergency declaration last week also immediately triggered a ban on price gouging for building materials and housing and storage services.