A home-rental company has disavowed charges in a civil lawsuit filed by the Los Angeles city attorney alleging that Blueground US Inc. ran afoul of state anti-gouging laws by raising its rents by 10% to more than 50% after last month’s deadly wildfires.
City Attorney Hydee Feldstein Soto said on Feb. 4 that her office filed the civil lawsuit against Blueground, a global rental company that the City Attorney’s Office reported has about 200 properties in the city. The company offers furnished “turnkey” homes with rental periods as short as one month – a type of housing that would benefit fire victims who lost their homes and possessions during both the Pacific Palisades wildfire and the Eaton Fire, according to the lawsuit filed in Los Angeles Superior Court.
Last month’s fires, two of the most destructive in the state’s history, destroyed more than 15,000 structures in Pacific Palisades, Pasadena and Altadena and forced more than 100,000 city residents to evacuate their homes, the legal complaint states.
“In the face of this, many individuals and businesses across the city and county of Los Angeles stepped forward with offers of help,” the lawsuit says. “Sadly, others have illegally profited from the housing scarcity created by the disaster. Defendant Blueground US Inc. … falls into the latter category.”
The lawsuit alleges Blueground violated the California Unfair Competition Law by increasing its advertised prices by more than 10% over prices advertised only days before the infernos struck. The company placed its rental listings and advertisements on its own website and through platforms such as Airbnb, Zillow and Westside Rentals, according to the City Attorney’s Office.
But a Blueground spokesman rejected the allegations, saying the company complies fully with California laws, including the “Anti-Gouging Law” that was triggered last month when Gov. Gavin Newsom declared a state of emergency as a result of the natural disasters that unfolded on Jan. 7.
“From the moment the state of emergency was declared, our team has diligently worked to ensure full compliance with California’s Anti-Gouging Law and has continuously monitored our pricing to maintain compliance,” Blueground spokesman Jamie Goldstein told the Southern California Record in an email. “It is important to clarify that the Zillow rates mentioned in the complaint referred to dates outside of the state of emergency. Most of these listings were for future dates, many of which fall during peak travel season, and were not subject to the emergency pricing restrictions.”
The company remains ready to work with city officials to explain its rental decisions, according to Goldstein.
“We are heartbroken by the devastation caused by the recent wildfires in Los Angeles and the surrounding areas,” he said. “We are working closely with the City Attorney’s Office to provide additional information and to clarify any concerns, and will continue to revisit our pricing model until the housing crisis in L.A. subsides.”
Feldstein Soto, however, called the company’s actions unconscionable and illegal and said they must be stopped.
“Our prosecutorial offices at the state, county and local levels are united in this effort to fight price gouging and hold accountable individuals and businesses who prey on our residents during this unprecedented emergency,” she said in a prepared statement.
The lawsuit said defendants, including Blueground and individuals labeled “Does 1-20,” should be assessed a penalty of $2,500 for each violation of the Business and Professions Code section 17200, with total amounts exceeding $100,000. Feldstein Soto’s office is also seeking restitution for consumers who were charged illegal rents and an injunction barring Blueground from charging rents above 10% during the current emergency and during any future emergency.