Airbnb, Under Attack in New Jersey, Seeks a New Ally: Voters

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JERSEY CITY — One of the most popular lodging choices for visitors to Manhattan is not actually in New York City. Just across the Hudson River in New Jersey, Airbnb and other home-sharing sites are booming, attracting travelers seeking less expensive places to stay.

Much of the growth is focused in Jersey City, a thriving community in Hudson County, which is among the top 30 revenue-generating counties in the nation for Airbnb hosts.

Now a recent law adopted by Jersey City limiting short-term rentals has made this flourishing market the latest front in the battle between Airbnb and public officials trying to find ways to impose rules on the home-sharing industry.

But unlike in other cities, such as in New York, where the company has gone to court to fight regulations, in Jersey City, Airbnb is trying a novel strategy: taking its case to voters.

Airbnb has mobilized a major political campaign to force a referendum this November, anticipating that voters, many of whom stand to make money from Airbnb or use it when they travel, would be sympathetic to its cause.

The ordinance passed by Jersey City last month reversed a law that four years ago had legalized home sharing. But since then concerns have grown that the expansion of Airbnb was depressing the availability of affordable housing and hurting the local hotel industry.

The law places a 60-day cap on the number of days a home can be rented if the owner does not live there and bars short-term rentals in buildings with more than four apartments.

“The goal in 2015 was home sharing, and I’m going to emphasize sharing, meaning that someone is going to rent out a room in their apartment,” the Jersey City mayor, Steven Fulop, said.

“What’s happened since then is it has set up this unregulated cottage industry of hotels and motels and bed-and-breakfasts, and it’s had a huge impact on quality of life issues, affordable housing issues.’’

To put a referendum about the law on the November ballot, supporters must collect 6,700 signatures by July 18. Though the petition drive was started by five residents critical of the law, their effort has gotten a significant boost from Airbnb.

For several weeks, canvassers paid by Airbnb have been blanketing parks, public transportation stations and busy streets to seek signatures.

“Thousands of residents may be in serious financial jeopardy, with some even at risk of foreclosure or bankruptcy — all because of the mayor’s new anti-short-term rental ordinance, crafted based on politics rather than sound policy,” Josh Meltzer, the head of policy in the Northeast for Airbnb, said in a statement.

The company became involved, he said, after Airbnb hosts had sought help to “push back against this ordinance.’’

“We gladly said yes,’’ he added.

Around the world, cities from Los Angeles to London are grappling with rapid expansion of the home-sharing industry and imposing rules aimed at regulating growth.

New York City, the biggest Airbnb market in the country, had tried to go a step further, requiring Airbnb and other home-sharing sites to provide monthly detailed information about their listings, including the identities and addresses of hosts. But in January a federal judge blocked the law after Airbnb and other sites sued.

Airbnb has tried the ballot route in San Francisco, where voters overturned a measure imposing limits on short-term rentals, and in San Diego, where officials rescinded a similar law after the petition drive began.

In Jersey City, the battle over short-term rentals has fractured the city. One camp includes the mayor and City Council, the hotel trades union and many residents of high-rise downtown buildings, who want tough regulations. Arrayed against them are Airbnb, homeowners, small businesses and real estate investors who operate Airbnb rentals.

Murat Ozsu started assembling a real-estate portfolio — from luxury high-rises to brownstone walk-ups — to use as short-term rentals after noticing the growing popularity in Jersey City. Soon, he had 30 units that rented for between $160 and $350 a night. His prospects seemed even better after New York City tried to enact stricter restrictions on Airbnb.

“If New York doesn’t allow it, and Jersey City does, well that’s just a gift to Jersey City,” Mr. Ozsu said.

“It was my intention to leave my job and make it my primary source of income,” said Mr. Ozsu, who works in financial technology.And that’s when this ordinance came into being.”

Home sharing has jumped significantly in Jersey City, with around 3,100 listings now, up from 2,600 less than two years ago. Proximity to New York City is clearly a key marketing strategy — “Modern 3BR flat | Next to PATH, 10min to NYC,” read one listing.

And the ease of reaching New York comes up repeatedly in comments by renters.

“Super easy to access all of New York City,” wrote one renter of an apartment near the Grove Street PATH station.

Some elected officials worry that home-sharing sites will squeeze the housing market and push up rental costs in a city already confronting the forces of gentrification.

James Solomon, a councilman who represents much of downtown Jersey City, pointed to a national study from the Economic Policy Institute, a left-leaning group, that analyzed Airbnb’s effect on local housing costs and found the beneficiaries are disproportionately white and high-wealth households.

“This is about a big technology corporation trying to protect a vested interest,” Mr. Solomon said. “They’re making big money off turning my neighborhood into a giant hotel. And they’re trying to protect that revenue stream.”

In Jersey City’s Heights neighborhood, which borders Hoboken and offers access to numerous bus routes into Manhattan, residents who once welcomed Airbnb have shifted their views.

“I don’t think people are against Airbnb, they just want to see it being used as what they thought its intent was, which is to provide owners the opportunity to supplement their income,” said Brian Rans, a former president of Riverview Neighborhood Association.

Andrew Miller, a leader of the ballot-referendum campaign, said he plans to move into a larger home and wanted to turn his current home into a short-term rental to help pay his new mortgage.

“We were moving in the summer, but we won’t do it if Airbnb becomes illegal,” said Mr. Miller. “I don’t know where the exact happy medium is, but I think the Council people really rushed to judgment on this one.”

Mr. Miller said he first heard about the petition from Nadezhda Sexton, who has been among the most vocal proponents of putting the short-term rental law to a vote. She owns and lives in the building where she rents out a garden unit, meaning the new law does not apply to her.

Still, she believes the law is an example of government “behaving so capriciously.’’

“We’ve pivoted our lives to take a hold of this opportunity,” Ms. Sexton said.

Some business owners credit Airbnb for helping fuel a rebirth in some neighborhoods.

“Eventually, you’re going to reach a ceiling, but by having an infusion of Airbnb people coming in, it’s always changing and building,” said Charles Boyd, an owner of The Grind Shop, a coffee house in Bergen-Lafayette, a neighborhood that is inland from downtown’s bustling waterfront and has historically struggled with crime and poverty. It is now seeing an uptick in development, including its own nascent restaurant row.

“Every week, I get so many people that come in and they’re either on their way in with their suitcases and they’re waiting for the Airbnb to be available,” Mr. Boyd said, “or they’re leaving and they’re waiting for their Uber to come and pick them up.”

Mr. Fulop, the mayor, said he believes the petition drive will be successful and lead to a vote in the fall.

“But we’re going to fight them on it,’’ he said, “and I don’t intend on losing.”