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Los Angeles has filed a lawsuit against Airbnb, accusing the home rental giant of price gouging during January’s wildfires that devastated Southern California. City Attorney Hydee Feldstein Soto announced the suit on Friday, alleging that rental prices on over 2,000 Airbnb properties in Los Angeles rose more than 10% between January 7 and 17—after Governor Gavin Newsom declared a state of emergency.
The complaint, filed in Los Angeles Superior Court, claims Airbnb failed to disable its “smart pricing” tool promptly. This feature automatically adjusts rental prices based on demand and remained active for listings in Los Angeles and Ventura counties during the emergency period.
Under California law, prices for essential goods and services—including housing—cannot increase by more than 10% during a declared state of emergency. The lawsuit states Airbnb violated this law and seeks an injunction to halt further unlawful price hikes, along with civil penalties of up to $2,500 per violation.
Feldstein Soto also accused Airbnb of misleading renters by claiming it had verified hosts and property locations, some of which reportedly did not exist.
Airbnb responded by highlighting its contributions to wildfire relief, including $30 million in support and emergency housing for nearly 24,000 people. The company added that its platform alerts hosts with error messages if they attempt to raise prices more than 10% above pre-emergency rates.
The wildfires, including the Palisades Fire and Eaton Fire, killed at least 30 people and damaged or destroyed over 16,000 structures, burning an area larger than Paris. Airbnb currently holds an estimated 80% market share of the short-term rental market in Los Angeles.
The case highlights the tension between digital platforms and regulatory compliance in times of crisis.
