By Jonathan Stempel
June 30 (Reuters) – Airbnb must face a lawsuit by the city of Los Angeles, which accused the home rental company of price gouging during the January 2025 wildfires in southern California, City Attorney Hydee Feldstein Soto said on Tuesday.
Judge Robert Broadbelt of the California Superior Court ruled that even if it is hosts who set prices, Los Angeles’ allegations that Airbnb’s advertising those prices and charging for rentals violated California’s penal code and Los Angeles’ municipal code.
The lawsuit filed in July accused Airbnb of illegally raising rental prices on more than 2,600 properties, violating a California law that prohibits prices of essential goods and services from rising more than 10% following a state of emergency.
Governor Gavin Newsom’s declaration of a state of emergency in Los Angeles triggered the state’s anti-gouging law, and it has been extended several times.
An Airbnb spokesperson said the company disputes the “inaccurate allegations” in the lawsuit, but supports Los Angeles’ recovery and rebuilding efforts.
Airbnb has said that the company, Chief Executive Brian Chesky and the nonprofit Airbnb.org contributed nearly $30 million to fire recovery efforts, including free emergency housing to nearly 24,000 people.
Feldstein Soto challenged Airbnb’s offering that it hosts a “Smart Pricing” tool, which when turned on lets the San Francisco-based company adjust and advertise prices based on demand.
The Southern California wildfires killed at least 31 people and destroyed or damaged more than 16,000 structures, charring an area larger than Paris.
Much of the damage came from the Palisades Fire in the Pacific Palisades and the Eaton Fire in Altadena.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese and Mark Porter)
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