LA Sues Airbnb: City Attorney Alleges Price Gouging, Deception During Wildfires

LOS ANGELES — City Attorney Hydee Feldstein Soto July 18 filed a civil enforcement action against Airbnb. The lawsuit alleges that the home renting platform, in the wake of the January wildfires in the Pacific Palisades and Altadena, increased rental prices of at least two thousand, and possibly over three thousand, properties within the City of LA in violation of California Penal Code section 396, the Anti-Gouging Law.  

The protections of this law came into effect on January 7, 2025, when Gov. Gavin Newsom declared a state of emergency in Los Angeles. The law prohibits the prices of essential goods and services – including rental housing – from being increased by more than 10% after an emergency is declared. 

Since then, the Governor, Mayor Bass and the LA County Board of Supervisors have repeatedly extended the state of emergency – most recently by the supervisors on June 24 – making it illegal for Airbnb to increase the pricing of its rentals by more than 10%.   

In addition, the suit alleges that Airbnb misleadingly represents to prospective renters that Airbnb has “verified” the accuracy of the identities of hosts and locations of properties on the site. In reality, Airbnb’s “verified hosts” include “hosts” with non-existent or false identities, and “verified” property addresses include addresses that are incorrect or non-existent. 

Feldstein Soto’s lawsuit, filed for violations of the CA Unfair Competition Law, seeks a permanent injunction barring Airbnb from charging illegal rents during the current state of emergency and from misrepresenting host identities or property locations, and requests  restitution to consumers who were charged illegal rents. The suit also seeks civil penalties of up to $2,500 for each violation to deter price-gouging and unfair, unlawful and/or fraudulent representations to consumers. 

“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,” said LA City Attorney Hydee Feldstein Soto. “Although Airbnb subsequently took steps to curtail price gouging, evidence indicates that illegal gouging on the site continues and may be ongoing. This lawsuit sends a clear message that we will not allow people, particularly at their most vulnerable moments, to be exploited without consequences.”

The wildfires in early January created an immediate and overwhelming need for local short-term rental housing. Airbnb, the world’s most popular online advertiser and broker of short-term rentals, had 2024 revenue of $11.1 billion with estimated 80% market share in Los Angeles. It is believed that hundreds and perhaps thousands of Angelenos who were forced to evacuate their homes in the Pacific Palisades and Altadena, as well as residents of nearby neighborhoods at risk for being evacuated, booked rentals on Airbnb. 

Airbnb is aware that its verification processes are inadequate, yet it continues to falsely, deceptively, unfairly, and/or misleadingly represent otherwise, potentially luring prospective tenants into a false sense of security about its hosts and locations. Tenants at Airbnb properties have been victims of identity theft, robbery, sexual assault, invasion of privacy, voyeurism and other crimes.

This litigation is being managed by the City Attorney’s Public Rights Branch.

Link to press release online: https://shorturl.at/2nKKG