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"Don't You Be My Neighbor:" Jersey City Votes against AirBnB - NC Journal of Law & Technology

“Don’t You Be My Neighbor:” Jersey City Votes against AirBnB

Short term rental laws are no new concept, however apps such as Airbnb have presented recent and numerous questions for lawmakers and citizens alike. Should the government regulate an individual’s right to own and use their property as they see fit, or should reasonable regulation pertaining to zoning and safety be put in place? And who is really affected  by the permitting of short-term leases facilitated by corporations such as Airbnb?

On November 5th, 2019, nearly 70% of the voters in Jersey City voted in favor of stricter short-term rental laws. This comes after Jersey City, in 2015, became one of the first major cities to enter into an agreement with Airbnb; similar agreements involved “Airbnb . . . striking deals with city and state officials to collect and remit some difficult-to-collect taxes from hosts in 2014, with new rules legalizing home-sharing in the area often announced by local officials. . .shortly after”. The 2015 Jersey City deal was estimated to potentially earn the city up to $1 million in occupancy tax revenue a year, but the result of the deal was explosive growth in Airbnb listings—from 300 in Jersey City to 2000—and neighborhood transformations that drove up costs and drove out residents.

Airbnb has been pushing both local law makers and communities to lessen regulation on short term leases. The recent vote in Jersey City had the company spending $4.2 million in ads and paying canvassers to campaign neighborhoods to favor Airbnb. This model of corporations campaigning is protected by the first amendment and is no new concept to the legal system, but Airbnb is unique in that it is targeting the laws of local municipalities, not the elections of individual representatives, bringing about the promise of economic growth for these cities, without acknowledging the disparate effects that it has on the citizens of these towns.

North Carolina itself has seen similar events come to pass—Raleigh passed restrictions earlier this year that would require rental owners to acquire a permit costing $176 and renew it for $86 a year. Violation of the ordinances runs up a fee of $500 per day for the rental owners. The Raleigh restrictions further prohibit whole house rentals, rentals of more than two rooms, rentals to more than two adults, and the rental cannot be separate from the rest of the dwelling, requiring homeowners to be onsite.

State law makers reacted to the Raleigh ordinance quickly by passing an amendment to the Vacation Rentals Act which prohibits municipalities  “from enforcing ‘any ordinance that would require any owner or manager of rental property to obtain any permit or permission. . . to lease or rent residential real property.’” The amendment also prohibits any additional fees or taxes to be levied against these rentals that are not already levied against commercial and residential properties.

The short-term rental problem is a double-edged sword: not having these restrictions could lead to what happened in Jersey City. But also, having these restrictions could lead to what happened in Jersey City. On the one hand, if municipalities are not permitted to have similar restrictive ordinances, an explosion of people buying rental properties that force out residents and drive up living costs could occur. This is what happened in Jersey City, where the deal with Airbnb, “result[ed] in higher rents, quality of life issues in neighborhoods plagued by transient occupants, and an exacerbated housing crisis.”

Conversely, if municipalities were permitted to pass similar laws into effect, it could have a ripple effect into surrounding areas of North Carolina that are currently cheaper to live but would later see a driving up of living expenses. For instance, Jersey City became a popular Airbnb location because of its proximity to New York City. New York is known for its strict rules regarding Airbnb; thus, Jersey City became a popular destination for people looking to book cheap housing close to the “Big Apple”. The strict rental laws in New York are what made Jersey City a target for Airbnb in the first place. Short-term lease restrictions in municipalities is not a small-town issue; Airbnb and similar companies are working across the nation. While there are no clear answers, there are and will be many questions as for what’s to come.

Karsin Williard

November 21, 2019