Startup Accused of Gouging LA Fire Victims on Rent

A venture capital-backed startup illegally jacked up rents for furnished apartments in Los Angeles — more than 50% in one example — after last month’s wildfires that destroyed thousands of homes, the city attorney’s office alleged in a lawsuit.

Blueground US Inc. violated California’s anti-gouging law, which prohibits rent hikes of more than 10% after a state of emergency is issued, City Attorney Hydee Feldstein Soto said in a statement.

Governor Gavin Newsom declared a state of emergency on Jan 7. in response to the fires that rank among the most destructive in state history. The Eaton and Palisades fires killed at least 29 people and destroyed more than 16,000 structures. More than 100,000 Angelenos had to evacuate their homes.

Blueground said it strongly denies the allegations in the suit.

‘Full Compliance’

“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,” the company said in a statement.

Among examples cited by the city attorney’s office of price-gouging by Blueground, the monthly rent for an apartment in North Hollywood that had been listed for $3,980 on Zillow on Dec. 31 was raised 20.6% to $4,800 on Jan. 10 — and lowered to $4,340 on Jan. 14 before it was re-listed at $4,430 on Jan. 23. Rent for a unit in the city’s downtown rose 56% on Jan. 7 before the price was reduced to $2,730 on Jan. 10 — but still 36.5% higher than the last pre-emergency price, Feldstein Soto said in the complaint.

The potential penalties, to be proved at trial, are estimated to exceed $100,000, according to the lawsuit.

Blueground’s statement said the Zillow rates cited in the suit refer to dates outside the state of emergency and that “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 said it will work with the city attorney’s office to provide information and clarify concerns.

Penalty Increase

The Los Angeles County Board of Supervisors this week moved to increase the penalty for price gouging to $50,000 from the current $10,000.

“No one should be taking advantage of people who have already suffered so much,” Supervisor Lindsey Horvath said Wednesday at a press conference. “No one in Los Angeles County should have to worry about being taken advantage of by predatory price gouging.”

California Attorney General Rob Bonta has also filed price-gouging enforcement actions in the wake of the LA fires.

Blueground was founded in 2013 in Athens and offers premium furnished rentals around the world, according to its website. With backing from multiple venture capitalists, it was valued at $750 million in 2021, Bloomberg News reported at the time.

The case is People of the State of California v. Blueground US Inc., 25STCV02951, California Superior Court (Los Angeles County).

Copyright 2025 Bloomberg.

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