Airbnb must continue defending itself against a lawsuit alleging the company profited from soaring rental prices during one of Southern California's most devastating disasters.
A California judge ruled that Los Angeles can continue pursuing claims that the short-term rental platform facilitated unlawful price increases after January's deadly wildfires.
What happened?
On Tuesday, Los Angeles City Attorney Hydee Feldstein Soto said California Superior Court Judge Robert Broadbelt would not dismiss the city's lawsuit, as The Spokesman-Review reported.
The suit, filed in July, accuses Airbnb of illegally raising prices on more than 2,600 listings after Governor Gavin Newsom's emergency order for Los Angeles took effect.
California's anti-price-gouging law generally limits price increases for essential goods and services to no more than 10% once an emergency has been declared.
The city says Airbnb may still be liable even if hosts chose the nightly rates, because the platform displayed those prices and collected booking fees — conduct Los Angeles argues violated state and local law.
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Feldstein Soto also highlighted Airbnb's "Smart Pricing" tool, which can adjust and promote listing prices based on demand when hosts opt to use it.
Why does it matter?
For families displaced by wildfires, short-term rentals are often not a luxury. They can be among the few immediate housing options close to jobs, schools, doctors, pets, and community support systems.
When prices surge during an emergency, people who have already lost homes or been forced to evacuate can end up paying far more just to find safe shelter.
The scale of the disaster raises the stakes. January's wildfires killed at least 31 people and destroyed or damaged more than 16,000 structures across an area larger than Paris.
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Much of that destruction was caused by the Palisades Fire in Pacific Palisades and the Eaton Fire in Altadena.
At issue is whether tech platforms can profit when emergency demand spikes while insisting that only users are responsible for the prices.
What are people saying?
Airbnb is pushing back on the claims.
An Airbnb spokesperson said that the company disputes the lawsuit's "inaccurate allegations."
The spokesperson also said Airbnb supports Los Angeles' "recovery and rebuilding efforts."
Airbnb has also said that the company, Chief Executive Brian Chesky, and Airbnb.org contributed nearly $30 million to wildfire recovery and provided free emergency housing for nearly 24,000 people.
Los Angeles, however, still argues that donations do not address the allegations of possible overcharges, especially if "Smart Pricing" may have contributed to them during a housing emergency.
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