Law Street Media

Jersey City Residents Vote to Restrict Airbnb

On Tuesday, the residents of Jersey City voted 69.22% for to 30.78% against to add Ordinance 19-077 to the municipal code, which will place further restrictions on operating Airbnb-type short-term rentals within the city. This decisive vote comes after significant lobbying on the part of Airbnb against the referendum’s passage.

The new legislation is similar to restrictions on Airbnb in other cities including New York, just across the Hudson River from Jersey City. In fact, since Jersey City initially added legislation in 2015 to allow short-term rentals in the city, there has been a steady increase in these rentals due in large part to the city’s proximity to New York. The new legislation was initially approved by Jersey City’s municipal council 7 to 2 on June 25, 2019; but a petition with over 20,000 signatures forced the ordinance to be placed on the ballot for a vote.

The Jersey City Municipal Code carves out different rules for hotels, traditional bed and breakfasts, and Airbnb listings (known in the code as “Short Term Rentals”). The 2015 legislation was far more lenient toward these short-term rentals than traditional B&Bs. At the time, Mayor Steven M. Fulop, adopted an “if you can’t beat them, join them” attitude toward the house sharing company, citing how technology has effected the music and taxi industries. Mayor Fulop decided it would be better to place a hospitality tax on the industry identical to the one used on hotels in the city, estimating that the tax on the then over 300 operational Airbnbs would generate between $600,000 and $1 million annually for the city. At the time many other cities had similar systems, including San Francisco and Philadelphia. Mayor Fulop now supports these new regulations, citing their similarity to regulations in other cities.

At the time of the initial legislation, many Jersey Cities policymakers like Councilwoman Candice Osborne seemed to agree with Mayor Fulop that residents would use short-term rentals no matter what and “there is only so much you can do about it.” However, attitudes have changed as the industry has taken over more and more of Jersey City’s residential neighborhoods. Airbnb sees the new regulations as potentially causing many people serious economic problems, as many people in the city have made a living out of running multiple Airbnbs. However, the City feels this is exactly the problem, pointing to these nearly hotel-like practices as making it more expensive and difficult to find permanent residence in the city.

Even with these new regulations, Airbnbs in Jersey City will remain less regulated than other hospitality services in the city and less regulated than Airbnbs in New York. One of the most significant elements of this new legislation is that the short-term rental cannot be operational for more than 60 nights per year without the owner/operator’s presence. This will lead to complications for people who use Airbnb to rent out multiple properties year-round, a practice that is explicitly legal under the 2015 legislation, though for anyone to offer more than five dwellings at once they must obtain a license from the City.  The new restrictions bring these short-term rentals closer to Bed and Breakfasts, which are required to have the owner residing on the premises at all times.  New regulations will also place limitations on what properties are eligible for use as a short-term rental based on factors like zoning requirements, dwelling size, and whether or not the property is rent-controlled by the government. These rules may make some current listings illegal and force certain Airbnb hosts to find other occupations and/or new properties to list.

Housing problems may not be the only reason the vote for this new ordinance was so strong. This vote was held less than a week after a shooting on Halloween, where 5 people died at an Airbnb..

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