Airbnb spends millions in campaign against proposed short-term rental regulations

Airbnb is putting its money where its mouth is, as the company has put up more than $4 million in a marketing campaign against proposed regulations against short-term renting in Jersey City.

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However, city officials and the hotel industry are pushing back in support of the new short-term rental rules, and now an all-out standoff has developed between the two sides.

On Tuesday, Jersey City voters will have a chance to vote in a referendum whether to enforce these new rules, which would require property owners to apply for a city permit before renting their property through Airbnb and set a cap on the size and amount of units that can be used for short-term renting.

The regulations would also set a limit on how long a property can be rented, with a maximum of 60 days a year set if the owner of the property doesn’t physically live on site. The ordinance would also restrict renters from using their homes for short-term rentals, as well, something Jersey City residents have been doing with increasing regularity over the last few years.

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The Wall Street Journal reports that in 2015, there were around 300 Airbnb listings in Jersey City per night, with that number skyrocketing to about 3,500 this year, according to the commuter city, which is a quick train ride to Lower Manhattan.

Both New Jersey Gov. Phil Murphy (D) and Jersey City’s Mayor Steven Fulop (D) have supported the proposed regulations, with Fulop witnessing an increase in illegal hotels and higher costs of housing that the short-term rental market has caused the Northern New Jersey city.

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"These are reasonable, fair regulations,” Fulop told the Journal. “They protect affordable housing, they protect housing prices. There are quality-of-life issues around Airbnbs and there are safety issues," before adding that regulations on short-term rental companies such as Airbnb "is a fair middle ground."

A man walks past a logo of Airbnb after a news conference in Tokyo, Japan, November 26, 2015. REUTERS/Yuya Shino/File Photo

Airbnb has spent more than $4 million via a group named Keep Our Homes in an effort to combat the proposed new regulations, which the company deems excessively burdensome and would essentially ban Jersey City residents from using the service as a means to make supplemental income with their properties.

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And city officials are far from Airbnb’s only critic, with the Hotel Trades Council and the Share Better coalition, which happens to be funded by the hotel industry, spending nearly $1 million in support of the new regulations.

A spokeswoman for Airbnb, Liz DeBold Fusco, told the Journal that the short-term rental market has helped the local tourism industry in the city as well as Jersey City residents themselves.

"But now these thousands of residents may be in serious financial jeopardy, with some even at risk of foreclosure or bankruptcy -- all because of the mayor's short-term rental ban, crafted at the behest of the hotel industry's special interests," Fusco said.

Meanwhile, an executive vice president with the Hotel Trades Council Rich Maroko criticized the company for threatening Jersey City's housing market.

"Working families can't afford to see their entire neighborhoods converted into Airbnb rentals," Maroko said, according to WSJ.

Airbnb has become adept at campaigning against regulations that aren’t in their best interest, having successfully defeated efforts to restrict short-term rentals in San Francisco back in 2015. The company did so again last year in San Diego, where officials repealed new regulations to restrict short-term renting instead of putting the matter before voters following a petition.

The company is already engaged in a prolonged legal battle with New York City regarding laws that require Airbnb to release information about its rental listings and the names of hosts each month, with the company suing the city claiming the law was unconstitutional. A federal judge blocked the law from taking effect in January, and now the issue is working its way through the city’s courts.

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With a currently estimated valuation of about $35 billion, Airbnb expects to go public next year, officials said in September upon announcing it had hit over $1 billion in revenue for the second quarter 2019 for the second time in the company’s history.

Back in Jersey City, officials are continuing to crack down on illegal hotels as Tuesday’s election draws near. The city’s taxation division sent a default notice to the Caprice Hotel in October after it had been enjoying a tax reduction back in 2013 to construct an 83-unit apartment complex in Journal Square.

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City officials have since accused the hotel owner of using the apartment building as an illegal hotel that uses Airbnb to post its listings.