A Bruising Battle in Jersey City Over Short-Term Rental Regulations

Fight pits Airbnb, internet company that champions short-term rentals, against city council looking to curb growing number of transient visitors

The battle in Jersey City over regulation of Airbnb listings has become a knock-down, drag-out affair, with millions of dollars spent, a barrage of advertisements and both sides accusing the other of trying to mislead voters.

The focus of the fight is a referendum on the Nov. 5 ballot to decide the fate of an ordinance passed by the city council this year imposing restrictions on short-term rentals of residential units in the city. Airbnb, the internet company that helps residential property owners find short-term renters, opposes the measure, and hotel industry interests are supporting it.

Most recently, the spotlight in the battle has settled on the Caprice Condo, an 83-unit building on JFK Boulevard. Mayor Steven Fulop says the city’s Division of Taxation recently put the developer on notice for defaulting on tax abatements received since 2013, alleging that instead of the residential complex that had been promised, the building has become an illegal hotel with the help of Airbnb, allowing hundreds of transient visitors to cycle through.

Voting on Ballot Question 1

Fulop said the building was an example of why the ordinance is needed and why residents should vote “yes” on Ballot Question 1, keeping the regulations in place.

“The developer misled the city to get a subsidy and then is using Airbnb as a tool to create more revenue for himself and more revenue for Airbnb,” he said.

The ordinance requires owners of short-term rentals to acquire a city permit and imposes limitations on the size and number of units that may be used as short-term rentals. It also caps the amount of time a home can be rented without an owner on-site at 60 days per year.

Airbnb says the ordinance is an overreach, a measure that effectively imposes a ban on renters, cutting 70% of residents out of the short-term rental market. The company says it favors the drafting of an alternative ordinance that would encompass “sensible regulation.”

“It bans all renters from being able to share their homes, no ifs, ands or buts, bans short-term rentals in any building with four or more units,” said Liz DeBold Fusco of Airbnb.

She also said the action against the Caprice Condo was timed to sway voters.

“Now because the city hasn’t carried through with regulation, they’re using this opportunity in order to make a political point and mislead the voters,” Fusco said. “What we’re saying in response is we support the regulation. Voting ‘no’ is voting against the ban and voting for a path forward in order to achieve sensible regulation.”

Fulop balked at the assertion that Airbnb was motivated by anything other than self-interest.

No concern for community

“Airbnb, I think, is not concerned about the community well-being,” he said. “They’re concerned about being in the New York media market here, the New York market, and protecting their IPO (initial public offering) next year, and they want to be able to show the public investors and private investors that the public has been supportive of them when it goes to a vote.”

The latest filings with the state Election Law Enforcement Commission provide a glimpse of how much the interested parties have riding on the Jersey City ballot question.

Airbnb has given $3.3 million to the Keep Our Homes Jersey City coalition, a group that’s urging residents to vote “no” and repeal the ban, ELEC reports show. Meantime, two groups linked to the Hotel Trades Council and the hotel industry who support the regulations have raised and spent roughly $900,000 to urge a “yes” vote.

Each side in the fight has dueling data sets to discredit the other. For example, Keep Our Homes — the group aligned with Airbnb — points to a study by an e-commerce lobbying group claiming that short-term rentals created $40 million in economic activity in Jersey City last year.

Meanwhile, a community activist and data analyst behind the website “Inside Airbnb” collected data showing that just 10 hosts in Jersey City are responsible for nearly 600 listings.

Fulop said voters should look at who’s on each side of the battle.

“If you line up who’s asking for a ‘yes’ vote and a reasonable support of reasonable and fair regulations, it is dozens upon dozens of credible organizations,” said Fulop. “And on the other side is Airbnb and dollar signs, and I think the public should know that.”

Intensive canvassing

Fusco said the city never sought to discuss the regulations with Airbnb, leaving many property owners suffering unfairly under the measure.

“Why didn’t the city come to us to find that path of agreement but still ensure the people who are sharing their home​, but rely on this income aren’t banned?” she asked.

City mailboxes have been flooded with literature, signs have been posted all around town and canvassers have gone door to door.

In a letter dated Oct. 16, a handful of Jersey City residents alleged that they were harassed and intimidated by proponents of the regulations, citing trespassing, damage to their properties and physical threats.

Fulop said the complaints were “just politics … three weeks away from an election.”

“The fact that they send out a press release when they send out a letter is suspect,” he said, adding that he hasn’t seen any reports being filed with city police over the allegations.

Fusco said proponents of the ordinance were spreading false information about the impact of a “yes” vote by indicating that the measure could then be amended.

“Anyone who votes ‘yes,’ if this ordinance were to be upheld in a referendum, cannot be amended for three years,” she said. “And that means people will be banned and this short-term rental economy will never recover.”