Topline:
The city of Los Angeles filed a lawsuit against Airbnb, alleging the popular rental platform raised prices above legal limits for at least 2,000 — and possibly more than 3,000 — properties after January’s fires, the city attorney announced Friday.
Why it matters: L.A. is accusing Airbnb of violating California’s Anti-Gouging Law, which bans property owners and landlords from raising prices by more than 10% in the wake of a state of emergency being declared.
Why now? City Attorney Hydee Feldstein Soto said Friday it’s “unconscionable” that the company allowed prices to be raised on thousands of rentals at a time when so many people needed a place to sleep.
Airbnb's response: Airbnb disputes the allegations. A spokesperson said in a statement to LAist that the company has and will continue supporting the city in its post-fire recovery and rebuilding efforts.
Read on ... for more about the lawsuit and Airbnb's response.
The city of Los Angeles filed a lawsuit against Airbnb, alleging the popular rental platform raised prices above legal limits for at least 2,000 — and possibly more than 3,000 — properties after January’s wildfires, the city attorney announced Friday.
L.A. is accusing Airbnb of violating California’s Anti-Gouging Law, which bans property owners and landlords from raising prices by more than 10% in the wake of a state of emergency. The lawsuit also accuses Airbnb of misleading potential renters with “verified” hosts and properties that included fake, incorrect or non-existent addresses and identities.
Airbnb disputes the allegations and says it has taken action to inform hosts about raising rents after the disaster.
Gov. Gavin Newsom declared an emergency in the Los Angeles area on Jan. 7, shortly after the Palisades and Eaton fires erupted. It was most recently extended by the county Board of Supervisors last month.
City Attorney Hydee Feldstein Soto said Friday it’s “unconscionable” that the company allowed prices to be raised on thousands of rentals at a time when so many people needed a place to sleep.
"Although Airbnb subsequently took steps to curtail price gouging, evidence indicates that illegal gouging on the site continues and may be ongoing,” Feldstein Soto said in a statement. “This lawsuit sends a clear message that we will not allow people, particularly at their most vulnerable moments, to be exploited without consequences.”
A spokesperson for Airbnb said in a statement to LAist that the company has and will continue supporting the city in its post-fire recovery and rebuilding efforts.
About the lawsuit
According to the City Attorney’s Office, Airbnb was aware that its verification processes for hosts and properties were “inadequate.” The lawsuit, filed in Los Angeles County Superior Court, accuses the platform of luring prospective renters into a false sense of security. Renters have been victims of identify theft, robbery, sexual assault and other crimes at Airbnb properties, according to the lawsuit.
LA sues Airbnb, accusing rental platform of price gouging after January fires
The city wants a judge to ban Airbnb from charging rents that violate state law and order that restitution be paid to people who paid those higher prices.
According to the lawsuit, the city also seeks to ban Airbnb from misrepresenting information about hosts and property locations, with potential penalties of up to $2,500 for each violation.
Airbnb’s response
An Airbnb spokesperson said the company took action to help hosts understand their obligations around price increases in L.A. after the emergency declaration.
“Hosts who attempt to raise their prices by more than 10% above their pre-emergency rates receive an error message,” the spokesperson said in a statement. “California Attorney General [Rob] Bonta praised Airbnb’s efforts to help hosts comply with the state's emergency declarations.”
Bonta has commended Airbnb, saying in January “they’re doing the right thing.”
He continued: “I thank them for doing that. We hope other platforms will follow suit and do the same.”
According to the spokesperson, Airbnb and company leaders have contributed nearly $30 million to fire recovery efforts, including free emergency housing to nearly 24,000 people and a $16 million donation to help rebuild and repair homes.
How to report price gouging
In L.A. County, you can file a complaint with the Department of Consumer and Business Affairs at this link.
The California Attorney General's Office recommends residents visit the state's website here or call (800) 952-5225.
