Los Angeles City Attorney Hydee Feldstein Soto announced that her office has filed a civil enforcement lawsuit against Airbnb, accusing the short-term rental platform of unlawfully inflating prices following the January wildfires in Pacific Palisades and Altadena.
According to the lawsuit, Airbnb raised prices on at least 2,000 and possibly more than 3,000 rental properties within Los Angeles city limits by more than 10% after a state of emergency was declared on Jan. 7.
California’s Anti-Gouging Law prohibits raising prices on essential goods and services, including rental housing, by more than 10% during a declared emergency.
Airbnb has a feature called “Smart Pricing,” which allows hosts or the website to adjust prices in the area based on demand.
At the request of California Attorney General Rob Bonta, the company disabled the feature on Jan. 17. The company also sent error messages to some hosts that attempted to raise prices by more than 10%, as reported by Courthouse News Service.
The lawsuit states that Gov. Gavin Newsom’s emergency order, along with declarations by Mayor Karen Bass and the Los Angeles County Board of Supervisors, has remained in effect and was most recently extended on June 24. These declarations triggered price protections intended to keep housing accessible during disasters.
“It’s unconscionable that Airbnb permitted prices to be jacked up on thousands of rental properties at a time when so many people lost so much and needed a place to sleep,” Feldstein Soto said in a statement. “This lawsuit sends a clear message that we will not allow people, particularly at their most vulnerable moments, to be exploited without consequences.”
The city is seeking restitution for affected renters and civil penalties of up to $2,500 for each violation. The lawsuit also seeks a permanent court order to stop Airbnb from continuing to charge high rates during the ongoing emergency and from misrepresenting host identities and property details.
The lawsuit further claims that Airbnb misleads users by promoting “verified” hosts and listings, despite what the city describes as a flawed verification process.
According to the complaint, some hosts use false or non-existent identities, and some property addresses listed on the site are inaccurate or entirely fabricated. The city argues this misrepresentation may cause renters to feel a false sense of security when booking.
Airbnb has not returned KTLA’s request for comment as of 1:26 p.m.
Following the January wildfires, hundreds of residents were displaced, resulting in a surge in demand for short-term rental housing.
Airbnb, which accounts for an estimated 80% of the short-term rental market in Los Angeles, is believed to have hosted many evacuees from the affected and nearby areas, according to the City Attorney’s Office.
The lawsuit also cites reports of Airbnb renters becoming victims of identity theft, robbery, sexual assault and other crimes. City officials suggest these incidents may be linked to the platform’s insufficient safety and identity verification measures.
The case is being handled by the City Attorney’s Public Rights Branch.
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