Bitterness Remains in Wake of Bruising Airbnb Fight in Jersey City

For some residents, Airbnb’s loss could mean they can’t afford to hold onto property they were planning on renting

The day after Airbnb suffered a stinging defeat at the hands of voters in Jersey City who overwhelmingly endorsed substantive regulations on short-term rentals, the lingering residue of a bitter, bruising battle was still evident in the comments by the opposing sides.

“I’m proud that Jersey City read through the information and they overcome a campaign, frankly, of misinformation and lies,” said Mayor Steven Fulop, who had been a staunch advocate of the regulations, which significantly rein in Airbnb in an urban center just across the Hudson River from one of the world’s top tourist destinations.

Airbnb, which spent over $4 million battling the regulations, cast itself as a victim of moneyed interests.

“From the start of this campaign, we knew this was going to be one of the toughest fights we’ve faced, with the big New York hotel industry determined to fight home sharing, but we had an obligation to stand up for our community,” said Airbnb spokesperson Christopher Nulty in a statement issued Wednesday.

With all but two city precincts counted, those voting “yes” in favor of the regulations made up 68.72% of the 26,000 votes cast, county records show.

The regulations put an annual 60-day cap on short-term rentals if the homeowner doesn’t live on site and limit rentals in buildings with more than four units unless the owner is present. It also keeps renters from acting as short-term rental hosts.

Fulop and other city officials had maintained that Airbnb and similar sites had created an unregulated hotel industry in their community. On Wednesday, they said the result had resonance nationwide.

“I think cities across the country are going to look at what we did here in Jersey City and see that Jersey City was really the first city to have the guts to stand up to that money and take it to a referendum and win,” said City Councilman James Solomon.

Worried property owners

Airbnb — which notched a win in a similar public fight recently in San Francisco and will soon be taking the company public for investors — wasn’t alone in ruing the result. Some city property owners also said they were disappointed, and worried.

Felicia Palmer owns a two-family home in Hamilton Park, about 10 minutes from where she lives. She estimates she’s hosted about 400 guests since she began renting it 10 years ago. Now she fears she’ll have to sell the property. Being able to rent it just 60 days out of the year makes the investment “cost prohibitive,” she said.

“How do we respond to this?” she asked. “Are we going to sell our home? Are we going to find some other way to make money from our homes, so we don’t have to sell it so our kids can have it as an inheritance?”

The long-term economic effects on the local community remain to be seen.

“We found that there was about $40 million of additional economic activity in the city, 50 direct jobs and over 350 additional total jobs supported by the industry,” said Christopher Hooton, chief economist of the Internet Association. To bolster its case, Airbnb said Jersey City hosts made nearly $17 million this summer alone.

City officials said they were open to making some accommodations in the law.

“I certainly commit and I think my colleague does as well to listen to make improvements,” Solomon said. “But I think the message was that home sharing has to be home sharing, not investments.”

The ordinance goes into effect in January. But hosts will get a full year to phase out listings that don’t fall within the rule’s parameters. During that time the city plans to staff up to enforce inspections and registration for rentals.

“We felt a year would be a good amount of time for people to get their literally and figuratively houses in order,” said Councilwoman Mira Prinz-Arey.