The city of Los Angeles has taken legal action against Airbnb, accusing the company of allowing rental prices to skyrocket during the recent wildfires that hit Southern California. The lawsuit claims that between January 7 and 17, at least 2,000 Airbnb listings in the city increased their prices by more than 10%, violating California’s law against price gouging during emergencies.
The wildfires, which began in early January, caused widespread devastation, leading Governor Gavin Newsom to declare a state of emergency in Los Angeles. This declaration activates a law that limits price hikes on essential services and goods, including housing. According to the city attorney, Hydee Feldstein Soto, the price surges happened before Airbnb disabled its “smart pricing” feature for Los Angeles and Ventura counties. This tool automatically raises rental rates based on demand.
Los Angeles city officials say Airbnb holds about 80% of the short-term rental market in the area. Despite efforts by the company to curb excessive price increases, the city believes some hosts continued to charge inflated rates during the emergency. The lawsuit also alleges that Airbnb misled renters by claiming it “verified” hosts and property locations, while some listings do not actually exist.
In response, Airbnb highlighted its efforts to help those affected by the wildfires, noting that CEO Brian Chesky and Airbnb.org have contributed nearly $30 million to aid recovery. The company also stated that its system warns hosts if they try to raise prices beyond the 10% limit set by emergency rules.
The city is suing under California’s unfair competition law and wants a court order to stop the illegal pricing. They are also seeking fines of up to $2,500 for each violation.
The wildfires were deadly and destructive, killing at least 30 people and damaging or destroying more than 16,000 buildings. Major fires like the Palisades Fire and the Eaton Fire burned an area larger than the size of Paris, leaving many communities struggling to recover.
This lawsuit brings attention to the challenges of short-term rental platforms during crises, especially when basic needs like housing become critical. As the wildfire season continues to be a threat, cities like Los Angeles are watching closely to ensure laws meant to protect residents are followed.