Fulop Ordinance Would Permit Airbnb in Jersey City

October 13, 2015 | Law & Public Safety, Politics
Mayor Fulop estimates the legalization of sites like Airbnb could net the city an additional million dollars annually.

By Maddie Orton
Arts Correspondent

Jennifer Leslie was looking to bring in additional income with her renovated downstairs apartment when she turned to the popular short-term home rental site Airbnb. Almost a year and about 40 guests later, she’s glad she took the risk.

“A lot of our friends thought we were crazy, but it’s really paid off,” she said. It’s been a huge money-maker actually. It’s been more lucrative then renting would have been.”

Leslie says her family grosses about $3,000 a month through Airbnb. She also enjoys the flexibility short term rentals afford, and meeting new people, like her current guests in from Holland.

If Jersey City Mayor Steve Fulop gets his wish, Leslie’s story might become a lot more common. While neighboring New York City is cracking down on the practice, Fulop has introduced an ordinance that would officially permit uses of Airbnb and sites like it to operate in Jersey City.

“Technology’s going to change the landscape. You have to be able to embrace it and work with it, and we think that we are doing that. And we are excited to be a leader in the tri-state area at this,” Fulop said.

The present legality of Airbnb rentals in Jersey City is fuzzy. Fulop characterizes it as ‘not permitted,’ but says there are loopholes. The ordinance would hold Airbnb properties to the same six percent tax Jersey City hotels pay.

In a deal cut with Airbnb, the website would take on the role of enforcing that tax collection. Fulop estimates it could net the city an additional million dollars in revenue annually.

“This will allow the city to use our resources better to really laser focus on the bad actors instead of trying to stop 300-400 per night,” Fulop said.

Those “bad actors” are the site users who buy up several properties and rent them out on Airbnb. They essentially run makeshift hotels. They’re the ones the New Jersey Hotel and Lodging Association worries about.

“Airbnb started to operate like Aunt Mary who wanted out rent out a room or a garage apartment, and it served a purpose. We don’t have a problem with that. It has morphed into a situation where it has become a commercial operation,” said Executive VP for the NJ Hotel and Lodging Assoc., Joe Simonetta.

Simonetta says these entities can compete unfairly against hotels, which have to pay a seven percent state sales tax on top of Jersey City’s six percent hotel tax, and are subject to several fees associated with licenses and regulations.

He says hotels want an even playing field.

“I would encourage him to perhaps license these individuals that want to operate, that gives them some government oversight, something to pull form them if they are bad actors. It also allows fire code inspections. It would allow for health inspections, I would encourage that,” Simonetta said.

Leslie falls under that “Aunt Mary” category. She says she welcomes an ordinance that would validate the practice, and that any added competition would only make hosts work harder to get that coveted 5-star rating.

The city council is expected to review the ordinance this week.