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The 1970s pop band Stealers Wheel may well define how many people in Jersey City feel in regards to the war over outlawing short–term rentals when the band sang, “clowns to the left of me, jokers to the right, here I am, stuck in the middle with you.”
If you’re confused by the rhetoric being flung around by both sides like so much horse manure, there is good reason.
Facts seem to be taking a back seat to a political power struggle with both sides desperate make their case to the public ahead of a Nov. 5 ballot iniative that could undo a council ordinance that slammed the door on short-term rentals except for a select few of local residents required to live in the building and can rent no more than three apartments.
Although the city council touted as ton of figures as to why short term rentals are damaging to Jersey City, many of these facts and figures do not hold up under close scrutiny — such as short term rentals causing a shortage of rentals when Jersey City has more rental units in the construction pipe line than any city in the state, possibly the nation.
Facts behind the council ban are sketchy at best, based on limited research into the actual effects of short-term rentals.
Airbnb, the main platform for the short-term rental market has been pushing hard to keep the market in Jersey City open and is pouring money into a campaign to reverse the council ban.
Those supporting the ban such as Mayor Steven Fulop have been citing horror stories, marching out police and fire officials to tout the dangerous situations that can occur as a result of short-term rentals – stuff fit for Halloween houses of horror. Fulop and others claim unregulated short-term rentals increase the danger to the public.
The only problem with this logic is that Airbnb has already agreed to many of the reforms the city proposed such as having an on-site manager, allowing short term rentals to be registered by the city, and to allow city health inspectors access to these units.
What Airbnb objects to is the ordinance limiting non-owner–occupied short–term rentals to 60 days a year – hardly worth the investment of millions in purchasing property.
The Jersey City Education Association, who is supporting the ban, went as far as to say they opposed strangers wandering the neighborhoods – as if an army of tourists with their roll along luggage in a rush to make the PATH train to Manhattan might pose a threat to school kids crossing local street. This is a far cry from the sales pitch four years ago when city officials were touting the Airbnb crowd as having no impact on local schools while promising to flood local businesses with tourist cash.
As in Manhattan, the battle over Airbnb appears to be about protecting hotels – which is largely why hotel workers unions are out in mass to support the ban, and other unions are coming out to support the hotel workers.
To understand just how significant the change of city rhetoric has been from when the city legalized short term rentals, you have to go back in time to listen to what was coming out of the mouths of politicians back in 2015 – when cities like Jersey City have found it difficult to fight the popularity of new technology-based companies like Airbnb, where people rent out their own apartments or rooms via the internet, largely ungoverned by local hotel laws.
When the city council voted to legalize short–term rentals, it was looking at the 6 percent hotel tax the city could collect from the more than 300 rental properties then operating in Jersey City.
This allowed Jersey City to become one of the few cities to require short-term rentals to pay.
Fulop, at the time promoting the approval, cited the city’s inability to keep ahead of the technological curve.
“We just don’t have enough inspectors to deal with all of the places that are being rented,” said Fulop.
Airbnb guests book their reservations through a website, and the guests paid Airbnb paid the city its tax. At the time, the city estimated this to be around $1 million annually – which according to Airbnb turned out to be very accurate.
“In Jersey City, we embrace the future, and that’s what companies like Airbnb are: the future,” said Mayor Fulop. “Airbnb is incredibly popular and growing rapidly, and while some people might have concerns about the sharing economy upending old ways of doing business, the best way to address those concerns is by engaging with these companies, not pretending they do not exist. In the words of Bill Clinton, ‘You have to make change your friend.’ And that’s what we’ve done here by working with Airbnb.”
At the time, Fulop also claimed that Airbnb would expand tourist capacity to Jersey City by supplementing the city’s 13 existing hotels.
“Airbnb is going to let Jersey City expand its tourism industry and draw even more visitors from all over the world, all while allowing residents to take advantage of the popular platform,” said then Ward E Councilmember Candace Osborne.
The problem with the ban if it is upheld by voters is that it won’t stop short–term rentals, but simply send landlords and renters to places like Craig’s List where they will continue to do business – without the protections Airbnb and other platforms offer, such as insurance and client reviews.
And if the city didn’t have enough inspectors in 2015 to deal with the illegal hotels, 2020 may be worse.
Back in 2015, Fulop seemed to understand how impossible it is to hold back the tide of progress, and how in an era of shared services such as Uber, old government models are ill–equipped. In some ways, the Jersey City ordinance is like holding a finger in a dike to keep the inevitable flood from coming.
“The change is happening now,” Fulop said in 2015. “Whether it is Uber, new music platforms or Airbnb, technology is changing the world. We need to make this our friend because we do not have the ability to control it. On any give day, people rent 300 to 400 units through Airbnb, and we have no ability to regulate it.”
Almost contradicting his current position, Fulop defended the Airbnb deal back in 2015.
“This will allow our inspectors to laser in on the bad actors, rather than everybody,” Fulop said.
In more current statements, Fulop and the police and fire unions appear to believe the opposite is true, and that banning short-term rentals is the answer instead.
Back in 2015, Fulop said it was unrealistic in modern times to prohibit the practice.
“If your neighbor rents to someone down the block, it’s impossible for you to know, or for us to enforce,” he said. “Technology is outpacing us. We need to work with it to come up with a reasonable outcome. And there is a big benefit.”