Stakes are high as Jersey City residents vote on Airbnb

Airbnb poured millions of dollars into a campaign opposing stricter regulations ahead of its anticipated IPO

Nov.November 05, 2019 03:45 PM
Airbnb CEO Brian Chesky and Jersey City Mayor Steve Fulop (Credit: Twitter, iStock, Airbnb)

Airbnb CEO Brian Chesky and Jersey City Mayor Steve Fulop (Credit: Twitter, iStock, Airbnb)

After a fraught campaign in which both Airbnb and the hotel lobby were accused of underhanded tactics, Jersey City residents headed to the polls Tuesday to decide whether to restrict short-term rentals.

The ballot was prompted after hosts challenged an ordinance passed in June that puts a 60-days-per-year cap on short-term rentals at properties where the owner is not on site, and bars short-term rentals in buildings with more than four units.

The ensuing battle pitched residents against residents, and the startup against its former ally, Jersey City Mayor Steve Fulop. Jersey City in 2015 had struck an agreement with Airbnb to collect a 6 percent hotel tax on homes rented on the platform — a first of its kind in the tri-state area and a sign that lawmakers were open to accepting and regulating Airbnb.

But in recent months Airbnb has poured $4.2 million into an opposition effort via a political action committee named Keep our Homes. On the other side, the Hotel Trades Council and the Sharebetter Coalition (which is bankrolled largely by the hotel industry) spent a little over $1 million on a campaign in support of tighter regulation.

Jersey City is a relatively small market for the $31 billion startup, with just 3,000 listings and 1,500 hosts. But its proximity to New York City — where Airbnb has been locked in a dispute about regulations for years — raised the stakes of the campaign. The outcome will be closely watched by observers across the country as Airbnb, which is expected to go public next year, seeks to clear up its lingering regulatory issues.

At a pro-Airbnb event at El Cocotero restaurant in Jersey City last week, Airbnb host Felicia Palmer told a small crowd that she used the extra income to support her family. “I am not here to represent Airbnb because Airbnb has enough corporate representation, money and resources,” she said. “I’m here to represent working families; neighbors like me and you who are responsibly and legally earning an income with Airbnb.”

Restaurant owner Luis Quintero said he supported Airbnb because his sister, a single mom, relied on the income she got from renting an extra room in her house.

But the Hotel Trades Council and its allies, including housing group Jersey City Together, say the law doesn’t target individual homeowners. They say it’s designed to go after commercial operators who — given New York’s ever-tightening regulations — come to Jersey City instead and buy properties in bulk.

“We have seen the impact of big, commercial, short-term rental operators firsthand as we have knocked on doors in rent-controlled buildings and as we have talked to members of our congregations who see the impact on their neighborhoods,” Jersey City Together’s Diane Maxon said in a statement.

Another point of contention between the camps is about what the law will actually do. Airbnb supporters argue it amounts to a total “ban” on listings — “ban the ban!” is a campaign chant — but Mayor Fulop, who sponsored the law, said they’ve got it wrong.

“I think [the law] is fair and reasonable,” he told listeners during an impromptu dial-in to the Brian Lehrer radio show Monday. “Most of the reasons that people bring up that they’re voting ‘no’ are just really rooted in misinformation.”

He defended his decision to push for restrictions despite initially welcoming Airbnb to Jersey City. “When I supported it in 2015, there were about 300 Airbnbs in the city and it was home-sharing in the truest sense,” he said. “That’s changed over the last four years.”

“It’s no longer Mrs. Smith sharing a room or an apartment — it’s companies coming across the river from New York that are buying five and 10 houses on a block and turning them into illegal hotels.”

Airbnb spokeswoman Liz DeBold Fusco said Fulop’s U-turn had pulled the rug out from under residents who were benefiting from Airbnb, which she said had boosted local tourism.

“These thousands of residents may be in serious financial jeopardy, with some even at risk of foreclosure or bankruptcy, all because of the mayor’s short-term rental ban, crafted at the behest of the hotel industry’s special interests,” she said.

Polls close at 8 p.m.

Write to Sylvia Varnham O’Regan at [email protected]

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