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Editor’s Note: This story has been updated to include an Airbnb statement
Los Angeles City Attorney Heidifeldsteinsoto announced that her office has filed a civil enforcement lawsuit against Airbnb, denounced the short-term rental platform for illegally expanding prices following the January wildfires in the Pacific Palisade and Altadena.
According to the lawsuit, Airbnb has raised at least 2,000, and perhaps more than 3,000 rental properties within the city of Los Angeles area by more than 10% after the state of emergency was declared Jan. 7.
California’s anti-procurement law prohibits the price of essential goods and services, including rental homes, by more than 10% in a declared emergency.
Airbnb has a feature called “Smart Pricing.” This allows the host or website to adjust local prices based on demand.
At the request of California Attorney General Rob Bonta, the company disabled the feature on January 17th. The company also sent error messages to several hosts who tried to raise prices by more than 10%.
The lawsuit states that Gov. Gavin Newsom’s emergency order, along with a declaration by Mayor Karen Bass and the Los Angeles County Board of Supervisors, was in effect and was recently extended to June 24th.
“It’s unconscious to allow Airbnb to be jacked on thousands of rental properties when Airbnb lost so many people and needed a place to sleep,” Feldstein Soto said in a statement. “This lawsuit sends a clear message that people will not be allowed to be misused without consequences, especially at the most vulnerable moments.”
The city is seeking compensation for affected tenants and seeking civil penalties of up to $2,500 for each violation. The lawsuit also seeks a permanent court order to stop Airbnb from continuing to charge high fees in an ongoing emergency, misrepresenting the host’s ID and property details.
The lawsuit further alleges that Airbnb mislead users by promoting “verified” hosts and lists.
According to the complaints, some hosts use false or non-existent identities, and some property addresses listed on the site are inaccurate or fully manufactured. The city claims that the misrepresentation could cause renters to feel false security when booking.
In a statement to KTLA, an Airbnb spokesman said the company would challenge allegations made in the lawsuit.
“Since the wildfires broke out, Airbnb, airbnb.org and Airbnb co-founder and CEO Brianchesky has donated nearly $30 million to Los Angeles fire recovery efforts.
“In response to the state’s emergency declaration, Airbnb has taken action to help hosts understand their Los Angeles price rise obligations. Hosts seeking to raise pre-emergency fees by more than 10%, California Attorney General Bonta praises Airbnb’s efforts and thank the state’s emergency. We hope that other platforms will follow suit and do the same.” We will challenge the lawsuit’s allegations and continue to support the City of Los Angeles’ recovery and reconstruction efforts. ”
Following the wildfires in January, hundreds of residents have evacuated, and demand for short-term rental housing has skyrocketed.
Airbnb, which accounts for an estimated 80% of Los Angeles’ short-term rental market, is believed to have hosted many evacuees from affected and nearby areas, according to the City Attorney’s Office.
The lawsuit also cites reports that Airbnb renters have become victims of identity theft, robbery, sexual assault and other crimes. City officials suggest that these cases may link to inadequate platform safety and identity verification measures.
The case is being handled by the City Attorney’s Public Rights Division.
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