Airbnb must face a lawsuit from the city of Los Angeles alleging price gouging in connection with short-term rentals following the January 2025 wildfires, according to a state judge’s ruling on Tuesday.
L.A. City Attorney Hydee Feldstein Soto filed the civil enforcement action against Airbnb last year, alleging the San Francisco-based rental platform illegally increased rental prices for at least 2,600 properties during last year’s conflagration.
The judge in the case declined Airbnb’s request to dismiss the lawsuit.
The suit seeks injunctive relief, civil penalties, restitution and other remedies authorized by law.
Judge Robert Broadbelt of the California Superior Court wrote in the four-page ruling that Airbnb violated a California law that prohibits prices of essential goods and services from rising more than 10% following a state of emergency.
The judge also wrote that Airbnb advertised and charged unlawful rental prices during the fires based on a tool called “Smart Pricing.” That company’s algorithm automatically adjusts nightly rates based on demand, seasonality and local market data.
While the company argued that the Airbnb hosts — or homeowners — set the prices, the lawsuit alleged that when Smart Pricing is turned on, Airbnb actually sets and advertises the rental prices.
“We continue to dispute the inaccurate allegations in the city attorney’s lawsuit,” an Airbnb spokesperson said. “We have been, and will continue to support the city of Los Angeles in its recovery and rebuilding efforts.”
The spokesperson said the judge’s order is “a preliminary step in the litigation” process.
Since the wildfires broke out, Airbnb said it has contributed nearly $30 million to fire recovery efforts in Los Angeles, including providing more than 75,000 nights of housing to people affected by the fires, plus a $16 million donation to Habitat for Humanity of Greater Los Angeles to help rebuild and repair homes, according to the spokesperson.
The January 2025 firestorms in the seaside community of Pacific Palisades and in neighboring Malibu turned to ash more than 23,448 acres, killed a dozen people, destroyed 6,837 structures and damaged nearly 1,000 others before extinguished on Jan. 31.
In Altadena, the fire burned more than 14,021 acres, killed 19 people, destroyed 9,414 structures, and badly burned another 1,074.