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LA Sues Airbnb for Alleged Price Gouging During Wildfire

By  |  July 20, 2025
LA Sues Airbnb for Alleged Price Gouging During Wildfire

The City of Los Angeles has filed a lawsuit against Airbnb, accusing the short-term rental giant of enabling widespread price gouging during the deadly wildfires that ravaged Southern California in January. City Attorney Hydee Feldstein Soto announced the legal action on Friday, citing violations of state emergency pricing laws.

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    According to Reuters, the complaint filed in Los Angeles Superior Court alleges that more than 2,000 — and potentially over 3,000 — Airbnb listings saw rental price increases exceeding 10% between January 7 and January 17, during a declared state of emergency. The city contends that these increases occurred before Airbnb disabled its “smart pricing” tool for the affected areas. This feature automatically adjusts rental prices based on market demand, which officials argue exacerbated price hikes when vulnerable residents needed shelter the most.

    Governor Gavin Newsom declared a state of emergency in Los Angeles County on January 7 in response to the escalating wildfires. The declaration activated California’s anti-gouging law, which prohibits raising prices of essential goods and services by more than 10% during such emergencies. Per Reuters, the emergency order has been extended several times since its issuance.

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    While Airbnb has stated that it took action to prevent price hikes — including generating error messages for hosts attempting to raise prices above legal thresholds — the city attorney said that evidence suggests violations continued beyond the initial emergency period. Feldstein Soto also accused the San Francisco-based company of misleading users with claims that it “verified” hosts and property listings, pointing out that some of the advertised rentals were found to be nonexistent.

    Related: Airbnb Caught in Contradiction Over EU’s Digital Markets Act

    The lawsuit seeks a court injunction to block further pricing violations during the ongoing emergency declarations and requests civil penalties of up to $2,500 for each infraction. It also accuses Airbnb of breaching California’s unfair competition laws by failing to adequately police price manipulation on its platform.

    According to Reuters, Airbnb responded by highlighting its contributions to wildfire relief efforts, stating that it, CEO Brian Chesky, and its affiliated nonprofit Airbnb.org have together donated nearly $30 million to recovery initiatives. The company also noted that it provided free emergency housing to almost 24,000 individuals displaced by the fires.

    The wildfires, among the most destructive in recent state history, claimed at least 30 lives and damaged or destroyed over 16,000 structures. Much of the destruction was attributed to the Palisades Fire in Pacific Palisades and the Eaton Fire in Altadena. Combined, the blazes scorched an area exceeding the size of Paris.

    Source: Reuters