Los Angeles City Attorney Hydee Feldstein Soto
Los Angeles’ city attorney is suing Airbnb after the home-rental platform allegedly increased prices on potentially thousands of its properties in the city beyond the limits imposed by the post-wildfire anti-gouging declarations.
City Attorney Hydee Feldstein Soto’s office filed the civil enforcement action July 16 in Los Angeles County Superior Court. After Gov. Gavin Newsom declared a state of emergency existed as a result of the Palisades and Eaton fires, price increases higher than 10% were prohibited for essential goods and services, such as rental housing.
The lawsuit also alleges Airbnb misled renters into believing that the company verified the identities of its hosts when many of the hosts had identities that either were not accurate or false. Some addresses were also not correct or simply did not exist, according to the complaint.
The online rental platform had revenue of $11.1 billion last year and controls 80% of the short-term rental market in Los Angeles, according to the City Attorney’s Office.
“It’s unconscionable that Airbnb permitted prices to be jacked up on thousands of rental properties at a time when so many people lost so much and needed a place to sleep," Feldstein Soto said in a prepared statement. "Although Airbnb subsequently took steps to curtail price gouging, evidence indicates that illegal gouging on the site continues and may be ongoing. This lawsuit sends a clear message that we will not allow people, particularly at their most vulnerable moments, to be exploited without consequences.”
Airbnb said it disputes the charges in the lawsuit and will continue to support rebuilding and recovery efforts in the wake of the January wildfires, which caused more than 100,000 city residents to evacuate their homes.
“Since the wildfires broke out, Airbnb, Airbnb.org and Airbnb co-founder and CEO Brian Chesky have contributed nearly $30 million to fire recovery efforts in Los Angeles, including free emergency housing to nearly 24,000 people impacted by the fires and a $16 million donation to Habitat for Humanity of Greater Los Angeles to help rebuild and repair homes,” an Airbnb spokesperson told the Southern California Record in an email.
In response to the wildfire emergency, the company took action to inform its hosts about the price limitations put in place after the fires. Hosts who tried to raise rents by more than 10% after the emergency was declared received error messages on the platform, according to Airbnb.
State Attorney General Rob Bonta has complimented the company on its efforts to urge hosts to comply with the post-wildfire declarations.
“They’re doing the right thing, I thank them for doing that,” Bonta said. “We hope other platforms will follow suit and do the same.”
The company’s contributions included $1 million to several groups supporting recovery efforts – the Los Angeles Fire Department Foundation, Neighborhood Housing Services of Los Angeles County and Brotherhood Crusade – and another $1 million to help area union members left homeless by the fires.
The city attorney is asking the court to issue an injunction to stop the alleged rent-gouging practices, to impose civil penalties of up to $2,500 per violation under California’s Unfair Competition Law and the recovery of legal costs.
