Airbnb faces contentious vote on rentals in Jersey City

  • Airbnb
  • Tuesday, 05 Nov 2019

Jersey City has evolved into one of Airbnb’s biggest regulatory battles this year given its proximity to New York, which has some of the strictest short-term rental regulations in the country and about 60 million visiting tourists annually. — AFP

After weeks of being bombarded with leaflets, television ads and door-knocking canvassers, Jersey City residents will vote Nov 5 on new restrictions on home-sharing companies like Airbnb Inc.

The issue has become a bitter, multimillion-dollar fight between the startup and its critics as the company, preparing to go public next year, seeks to resolve local regulation issues around the US. Jersey City, a short train ride across the Hudson River from Manhattan, has seen a 10-fold increase in home-share listings in recent years as it has become a popular, more affordable lodging option for visitors to New York City.

The Nov 5 ballot question seeks residents’ permission to limit rentals to 60 days a year if the owner doesn’t live on site. No rentals would be allowed in buildings with more than four residential units – meaning a ban for the luxury high-rises in the gentrified downtown and along the revived waterfront in New Jersey’s second-most populous city.

"The stakes are very, very high for Airbnb here. This is incredibly important to their IPO,” Jersey City Mayor Steven Fulop said in an interview. "People have been getting mail every day in the city for the last month. This has been bombardment for the people of Jersey City.”

Last Friday, pro-Airbnb residents took to the streets with signs that read: "My Home, My Rules”. A few blocks away, opposing residents handed out fliers claiming Airbnb was destroying neighbourhoods.

Airbnb says the proposed regulations constitute an outright ban on listings and that they will kill the city’s short-term rental economy, which pulled in US$16.7mil (RM68.99mil) for hosts over the summer. "This was intentionally written to make it impossible for people to rent their home,” said Airbnb spokeswoman Liz DeBold Fusco. She added that the new regulations were "crafted at the behest of the hotel industry’s special interests”.

The Manhattan-based Hotel Trade Council has poured about US$1mil (RM4.13mil) to support the proposed rules in Jersey City, which has more than 270,000 residents and is one of the state’s fastest-growing municipalities. The hotel union group has few members in Jersey City, but it has been the most powerful opponent of Airbnb in New York City. Meanwhile, Airbnb has spent about US$4.2mil (RM17.35mil) to fight the ordinance, according to New Jersey Election Law Enforcement Commission filings.

Short-term rentals have been legal in Jersey City since 2015, but the number of Airbnb listings have risen to about 3,000 today by 1,500 hosts, up from 300 listings four years ago. Critics say some are run by absentee owners, leading to neighborhood complaints about noise, rowdy behavior and potential fire and other safety hazards. The company, which operates in more than 100,000 cities worldwide, has lost similar battles in New York as well as its home, San Francisco.

Fulop said the rules are "commonsense regulations” and similar to what other cities have already enforced. "The ordinance is not a ban. We want to make home-sharing fair,” he said. New Jersey Governor Phil Murphy also supports the measure.

Jersey City has evolved into one of Airbnb’s biggest regulatory battles this year given its proximity to New York, which has some of the strictest short-term rental regulations in the country and about 60 million visiting tourists annually. New York officials have recently been clamping down on illegal Airbnb listings and investors are getting nervous that the acrimony could cast doubt on Airbnb’s US$31bil (RM128.07bil) valuation ahead of its IPO.

On the ground, the argument boils down to those who believe Airbnb helps everyday residents make ends meet by allowing them to rent out their spare bedrooms and those who say Airbnb is run by commercial operators who are changing the fabric of the community. It’s a familiar argument that’s been getting attention in cities around the world.

San Francisco in 2018 tightened regulations on such rentals by requiring properties to be registered with the city and owners to live on the premises for at least 275 days a year. New York City prohibits home or apartment rentals for fewer than 30 days unless the unit’s owner also occupies the space, and has boosted its enforcement budget to root out violations. In Washington, D.C., short-stay hosts have complained about new rules while they remain uncertain about licensing and fines. Airbnb has settled lawsuits this year in Boston and Miami, where restrictions were approved.

According to Inside Airbnb, an independent website, about 72% of Airbnb’s listings in Jersey City are from hosts running multiple properties. Airbnb disputes these figures and questions the accuracy of the data, but the company hasn’t released evidence to disprove them.

Supporters say the new legislation is stripping them of their rights. "We have been criminalised,” Felicia Palmer, a Jersey City resident, said at an Airbnb rally on Friday. "This is a civil rights issue,” she said.

However, Jersey City critics who don’t want restrictions include hosts who rent spare rooms while they are in residence. At public forums, some have said they need the extra cash to subsist in one of the most expensive US housing markets. It would be onerous, they’ve said, to register with the city, pay fees and open their homes to inspectors, as the ordinance outlines.

Stephanie Daniels, 68, said Airbnb was turning her neighbourhood into a tourist haven. "I’m concerned that any time a house is sold the people are buying it to put it on Airbnb,” she said. "It’s important for people to understand just how important this vote is.” – Bloomberg

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