Los Angeles City Attorney Feldstein Soto files suit against Airbnb, alleging price gouging

The city of Los Angeles has filed a civil enforcement action against Airbnb over allegations the company price-gouged rental proprieties in the wake of January’s wildfires in fire-impacted communities, it was announced on Friday, July 18.

The lawsuit claims the short-term rental platform raised rental prices on at least two thousand — and possibly more than 3,000 — proprieties within the city’s jurisdiction in violation of the state’s anti-gouging law.

City Attorney Hydee Feldstein Soto’s office filed the suit under the state’s Unfair Competition Law, seeking a permanent injunction barring Airbnb from charging illegal rates during the ongoing state of emergency and from misrepresenting host identities or property locations. The suit also seeks restitution for renters charged unlawful rates, and civil penalties of up to $2,500 per violation.

“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 statement.

She acknowledged Airbnb took some steps to curb price increases but said the issue is ongoing.

“This lawsuit sends a clear message that we will not allow people, particularly at their most vulnerable moments, to be exploited without consequences,” Feldstein Soto added.

In a statement to City News Service, a spokesperson for Airbnb said the company disputes the allegations and emphasized its support for the city’s recovery efforts.

“In response to the state’s emergency declarations, Airbnb took action to help hosts understand their obligations with respect to price increases in Los Angeles,” Airbnb said in a statement. “Hosts who attempt to raise their prices by more than 10% above their pre-emergency rates receive an error message.”

Airbnb noted that California Attorney General Rob Bonta previously commended the company’s efforts to ensure host compliance during emergencies.

Gov. Gavin Newsom declared a state of emergency in Los Angeles in January, triggering a state law prohibiting rent increases of more than 10% for essential goods and services.

That emergency declaration has since been extended multiple times by Newsom, Mayor Karen Bass and the Los Angeles County Board of Supervisors —most recently on June 24.

According to the city attorney’s office, Airbnb also allegedly misled renters through its list of “verified” hosts and property locations. The lawsuit contends some “verified hosts” used false identities and listed inaccurate or non-existent addresses.

Airbnb, the world’s largest platform for short-term rentals, reported $11.1 billion in revenue in 2024 and is estimated to hold 80% of the market share in Los Angeles.

The company has contributed to local fire recovery efforts through its nonprofit Airbnb.org, which it says has provided free emergency housing to nearly 24,000 people in Los Angeles.

Other contributions, according to Airbnb, include:

— $10 million and $6 million in donations from co-founder and CEO Brian Chesky to Airbnb.org;

— A $16 million donation to Habitat for Humanity of Greater Los Angeles;

— $1 million to organizations including the L.A. Fire Department Foundation, Neighborhood Housing Services, and Brotherhood Crusade; and

— $1 million in Airbnb credits to the L.A. County Federation of Labor.