Airbnb lost by a landslide in Jersey City. What went wrong?

Jersey City mayor said he’s fielding inquiries from other cities after victory against Airbnb

Nov.November 07, 2019 09:45 AM

On Tuesday night, as polls neared closing in a referendum on short-term rentals in Jersey City, Airbnb fired off an email accusing Mayor Steve Fulop of “prohibited electioneering.”

The attached video — a grainy, four-second exchange between Fulop and a voter — showed what Airbnb called a “shocking disregard for law.”

It was the final act in a divisive and expensive battle over the company’s future in Jersey City, which along the way had triggered accusations of lies and misinformation on both sides.

At a beer garden in downtown Jersey City, Mayor Fulop and his team watched the results coming in as the night wore on — ending with a landslide result: roughly 70 percent in favor of an ordinance, effective January 2020, which places restrictions on short-term rentals.

It was a significant defeat for the home-sharing startup in what had become a symbolic fight. After Airbnb was welcomed into Jersey City in 2015, listings ballooned from 300 to 3,000 — many of them commercial operators who had come from New York City to escape strict regulations, according to Mayor Fulop.

Bradley Tusk, a political consultant and former campaign manager for Michael Bloomberg said the result may embolden advocates to pursue more legislation and ballot referendums in other areas, a potential headache for the company as it seeks to resolve regulatory issues across the country ahead of its anticipated IPO next year.

In addition, Tusk said, the Jersey City result “put Airbnb on the defense everywhere and cost them whatever leverage they had left in New York.”

Airbnb has so far offered limited comments about the result, but in a statement Tuesday night, company spokesperson Christopher Nulty said the startup knew from the beginning that it was facing a tough fight. He blamed “hotel-backed special interests” for moving the needle.

Aligned with the mayor, the Hotel Trades Council and the Sharebetter Coalition (which is bankrolled largely by the hotel industry) spent a little over $1 million opposing Airbnb on a campaign in support of tighter regulation.

Fulop, who anticipates listings from commercial operators will now reduce significantly, said the result in his city could have national significance.“We’ve had this morning three major cities larger than Jersey City reach out for information about the ordinance,” he said. (In a blog post published today, Airbnb said hundreds of municipalities already had arrangements in place.)

The company’s post stressed that the referendum was always about hosts, noting that “Jersey City is not significant to our business.” Throughout its $4.2 million campaign, this message was driven home, and local hosts were front and center, making the case that the ordinance would hurt homeowners who made money legally from Airbnb. (Fulop said the law targeted commercial operators, not individual homeowners.)

Tusk said the personal strategy was a good one. “It’s the only narrative they have,” he said of Airbnb. “Nobody cares about the wellbeing of a tech company. The hosts are real residents and real people, and it does impact their lives.”

Fulop, however, said the company’s efforts were too little, too late.

“They should have been more engaged with the community earlier,” he said. “Trying to come in at the 11th hour because they have dollars didn’t achieve any results.”

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