Key facts
- Airbnb must face a lawsuit filed by the city of Los Angeles.
- The lawsuit alleges Airbnb engaged in price gouging during the January 2025 wildfires.
- The company is accused of violating California's Anti-Gouging Law by increasing rental prices by more than 10% after a state of emergency was declared.
- The suit also claims Airbnb misled renters about the verification of host identities and property locations.
- The city is seeking restitution for affected guests and civil penalties.
Airbnb must face a lawsuit filed by the city of Los Angeles alleging that the company engaged in price gouging during the January 2025 wildfires. City Attorney Hydee Feldstein Soto announced that the lawsuit accuses Airbnb of violating California's Anti-Gouging Law by allowing prices for over 2,000 properties to increase by more than 10% after Governor Gavin Newsom declared a state of emergency on January 7, 2025.
The state of emergency has been extended multiple times, most recently on June 24, making it illegal for Airbnb to increase rental prices beyond the 10% threshold. The lawsuit, filed under the state's Unfair Competition Law, also claims that Airbnb misled prospective renters by falsely representing that it had verified the accuracy of host identities and property locations. Some "verified" hosts allegedly had non-existent identities, and "verified" addresses were incorrect or non-existent.
Feldstein Soto stated that it is "unconscionable" that Airbnb permitted prices to be increased at a time when many people had lost their homes and needed shelter. The wildfires in early January created an urgent need for short-term housing, with many evacuees turning to Airbnb. The lawsuit seeks a permanent injunction to prevent Airbnb from charging illegal rents and requests restitution for consumers who were charged excessive amounts. It also seeks civil penalties of up to $2,500 for each violation.
Airbnb disputes the claims, stating that it took action to help hosts understand their obligations regarding price increases in response to the emergency declarations. A spokesperson noted that hosts attempting to increase prices by more than 10% received an error message. The company also highlighted its own relief efforts, including nearly $30 million in donations and free emergency housing for 24,000 people through Airbnb.org.