Airbnb hosts say Jersey City ordinance to restrict short-term rentals would end their livelihoods

After putting off a decision on the future of short-term rentals at their May 9th meeting, the Jersey City Council yet again debated the provision last night, prompting Airbnb hosts to say any new regulations would effectively end their livelihoods.

At the May 9 City Council hearing, the council voted to create an ad-hoc committee consisting of Council President Rolando Lavarro, Ward E Councilman James Solomon, Ward B Councilwoman Mira Prinz-Arey, Ward C Councilman Richard Boggiano and Ward D Councilman Michael Yun that would hear testimony from Airbnb hosts before deciding on how to proceed with a 2015 ordinance concerning Airbnb.

At about 10:00 p.m. last night, Solomon began by explaining some of the major changes to the 2015 ordinance, which was crafted by the ad-hoc committee based on over three hours of public testimony from Airbnb hosts, input from the city’s law department and Councilman Yun’s request for additional changes to the first draft.

“Some of the changes are largely related to the owner-occupied rentals where the owner is still allowed to engage in short-term rentals moving forward. A couple of changes … someone who’s renting their own unit, a unit that they live in, had been limited to two rooms has now been increased to three,” Solomon began.

“Someone who had lived in an owner-occupied building with multiple units, there had been a cap of no more than three short-term rentals, has now been increased to four. [Hosts of an owner-occupied rental] who have more than one unit can now rent up to two units if they have a four-family or a three-family residence.”

Solomon continued that initial fees to register rentals will be dropped from $500 to $300, as well as $250 to $200, respectively, while insurance requirements will be cut down to $500,000 from $1 million.

“The last thing, the phase-out requirement: The ordinance as it is written today goes into effect January 1, 2021. But for those tenants who have an existing lease with a unit or a host with bookings, the new ordinance says that any bookings between the date the ordinance is passed to January 1, 2021 it would allow you to honor those bookings and then regarding the lease, if you can provide documentation of that lease to provide short-term rentals, you can until January 1, 2021.”

Conversely, Yun then talked up his version of the ordinance that should be incorporated into the final draft, acknowledging that the council made a mistake in 2015 when they voted to allow for home-sharing without regulations.

His main argument is that Airbnb hosts who purchased second properties, some of them spending up to a $1 million or more, should be grandfathered into the 2015 law that allows them to rent those secondary properties to Airbnb tenants.

“Those people who got into the business, a lot of people, did so based on our 2015 city ordinance, which we should have made more protections, rules and regulations, but we didn’t do that. So we opened the door to the market for everyone, Yun began.

“I’m happy with the [ad-hoc] committee’s draft, I’m just saying that we have to give time to the people who trusted this city council, they trusted this government, we should respect and give time to recoup their financial investments. That’s what I’m looking for. When you hurt somebody who invested in a property with 20 to 30 years of mortgage payments, the financial impact to Airbnb hosts … we’ll be hurting our own people in Jersey City.”

However, Solomon said he’s not in favor of grandfathering those secondary properties purchased by Airbnb hosts after the passage of the 2015 city ordinance.

“[In] The committee draft we were trying to address the concerns of investors through that phase-out provision, and I think that we can look at and see if we can adjust it for people with leases as opposed to people who own.

“But I’m not in favor of the grandfather provision because a lot of the constituents who reached out to me said ‘I bought in this neighborhood 10 years ago and I thought that I was buying into a neighborhood, but now my neighbors are running a hotel that is unstaffed and I didn’t ask for that.’ So, they’re sort of saying grandfather me back into the neighborhood I thought I was moving into,” Solomon responded as Airbnb hosts in attendance held up protest signs as he was speaking.

We had a chance to interview one of them, Sean Connelly, about why he started a home-sharing business with Airbnb.

“I’m 61 years old, I’m an actor right now, so I can do well this month, and starve next month. I needed this to pay the [reval] taxes, and I was really fearful of losing my home after my family has been in the house for 110 years. And to lose it because City Hall gave me a $28,000 tax bill just had me enraged,” said Connelly.

“The abated properties aren’t subject to the reval. They’re still paying a PILOT (payment in lieu of taxes) based on a value of 10 to 15 years ago. That’s a double kick in the you-know-what. Boy, it just gets me furious, furious that this city would do this to us.”

Northeast Press Secretary for Airbnb Liz DeBold Fusco said she was glad to hear Yun stand up for the Airbnb hosts, but believes that the ordinance the council will eventually be voting on will effectively end Airbnb in Jersey City.

“There’s a number of different restrictions honestly that, I think, it’s the sum of the parts really that prescribe the end of home sharing altogether. The ordinance really would just entirely limit home sharing of any type in the city,” she said.

“Again, we think that it’s really important to grandfather in existing hosts as Councilman Yun eloquently argued for, but, again, we really would support a total regulatory package that includes registration among other measures, and that is something that our hosts support as well.”

The council will have their regularly scheduled public session tomorrow evening at City Hall, 280 Grove St., at 6 p.m.