The City Attorney of Los Angeles, Hydee Feldstein Soto, has initiated a civil enforcement lawsuit against Airbnb, accusing the short-term rental platform of violating California’s Anti-Gouging Law in the aftermath of the January wildfires in Pacific Palisades and Altadena.
The legal action claims that Airbnb unlawfully increased rental prices on at least 2,000 properties—and potentially more than 3,000 within the City of Los Angeles, in breach of California Penal Code section 396. The code restricts rental increases of essential goods and services, including accommodation, to no more than 10% following the declaration of a state of emergency. hese legal protections came into force on 7 January 2025, following Governor Gavin Newsom’s declaration of a state of emergency for Los Angeles County. This emergency status has since been extended multiple times, most recently by the LA County Board of Supervisors on 24 June, maintaining the price cap on rental housing. Despite these restrictions, the City alleges that Airbnb permitted unlawful price increases throughout the affected period.
The suit further alleges that Airbnb misrepresented the legitimacy of its platform, claiming to have “verified” hosts and property locations that were, in some cases, false or non-existent. According to the City Attorney, this has created a false sense of security among renters, potentially putting them at risk.
“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,” said City Attorney Hydee Feldstein Soto. “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.”
The wildfires earlier this year caused significant displacement, resulting in urgent demand for short-term accommodation. Airbnb, which recorded US$11.1 billion in revenue in 2024 and holds an estimated 80% market share in Los Angeles’ short-term rental market, is believed to have housed thousands of residents who were evacuated or living in at-risk areas.
The lawsuit, filed under California’s Unfair Competition Law, seeks:
- A permanent injunction prohibiting Airbnb from increasing rental prices beyond legal limits during the state of emergency;
- A ban on misleading representations about host identities and property locations;
- Restitution for affected consumers;
- Civil penalties of up to US$2,500 per violation.
The City Attorney’s Office also highlighted broader concerns around Airbnb’s vetting processes, alleging that weak verification standards have exposed renters to serious safety risks including identity theft, robbery, and other crimes.