With a Nov. 5 plebiscite, Jersey City, N.J., became the
latest municipality to join Airbnb's loss column, another setback in the company's
war with cities over short-term vacation rental regulations.
And while Airbnb
downplayed the significance of the vote, industry insiders said the defeat
reflected growing global opposition to the homesharing platform's rapid
"If I were Airbnb, I’d certainly be concerned by the results
in Jersey City," said Daniel Guttentag, assistant professor in hospitality and
tourism management at the College of Charleston's School of Business in South
Carolina and director of the department's Office of Tourism Analysis. "In part,
because they spent a lot of money, and also because the vote wasn't even close."
In the ballot referendum, roughly 70% of voters reportedly
came down in favor of tightening short-term vacation rental rules, even after
Airbnb allegedly sank more than $4 million into lobbying efforts. Jersey City,
located just across the Hudson from lower Manhattan, has seen a boom in
vacation-rental listings in recent years.
That boom was accelerated in part by a wave of vacation-rental
restrictions enacted by New York in 2016, making the proximity of Jersey City a
favorite alternative among visitors to the Big Apple.
Jersey City's new ordinance, set to go into effect in
January, will require short-term vacation rental owners to register for a
permit, and it puts a 60-day annual cap on how often a short-term vacation
rental can be offered without an owner on-site.
"The big takeaway from this is not to what degree are we
starting to see a pattern of cities trying to crack down on Airbnb but to what
degree we now see cities being successful in their efforts," Guttentag said. "There
is probably going to be a snowball effect, because each city sets a template
for other cities, telling them that if this is something they want to tackle, they
can do it."
That snowball might already be reaching critical mass. In
addition to New York and Jersey City, major destinations like London, Paris,
Barcelona, Miami and San Francisco as well as resort markets like South Lake
Tahoe have passed strict vacation-rental regulations.
David Jacoby, president and co-founder of the property
management software and digital guidebook platform Hostfully and board member
of the Home Sharers Democratic Club of San Francisco, said, "There are a lot of
similarities between what’s happened in Jersey City and the legislation that's
happened in San Francisco, where Airbnb also spent a fair amount of money,
around $8 million."
In San Francisco, a short-term vacation rental can't be
rented out for more than 90 nights per calendar year without an owner present.
Additionally, owners must register their vacation rental with the city.
According to Jacoby, the laws, which went into effect in
early 2018, resulted in San Francisco's Airbnb listings getting "cut in half
overnight." The move was seen as a win by many of the city's progressives, who
blamed a surge in vacation rentals for exacerbating San Francisco's high real
"People were saying that this was going to have a big impact
on rent," Jacoby said. "But two years later, the rents in San Francisco have
not gone down."
Despite that precedent, Guttentag is not surprised that
affordability issues would also galvanize voters in a high-cost market like
"I think it’s unrealistic to pin all the blame on Airbnb,
but I think it's realistic to acknowledge it's got to be contributing, at least
to a degree, to this [real estate] issue," Guttentag said. "It's easy to see
why this would be on people's radar. Also, if you are a person living next to
an Airbnb and you think it’s problematic, it's probably going to make you really
upset. A lot of people won’t care that much, but if it is something you do care
about, it's probably something you care about a lot and will go and vote on."
Meanwhile, just how quickly a concrete Airbnb clampdown
materializes in Jersey City is highly dependent on the local government's
ability to enforce the new ordinance. According to Simon Lehmann, CEO and
co-founder of private accommodations and vacation-rental industry consulting
firm AJL Consulting, markets like London, where vacation rentals can only be
rented out a maximum of 90 days per year, are still awash with illegal
"In London, the big regulatory issue is enforcement,"
Lehmann said. "You might have some clear regulations in place, but if no one’s
checking, what’s the point?"
In the wake of the Jersey City loss, Airbnb said in a
statement, "Jersey City is not significant to our business -- and
even in New Jersey, it pales in comparison to the Jersey Shore. We operate in
191 countries and 100,000 cities, with more than 7 million listings worldwide.
There are about 3,000 listings in Jersey City. But we have an obligation to
stand up for our hosts and their rights, and that's what we did."
A highly localized and ever-evolving regulatory landscape
isn’t the only challenge Airbnb is facing, however. The platform's security and
support policies have come under fire in recent weeks, after five people were
killed at an unauthorized party at an Airbnb rental on Halloween.
Also, in late October, Vice published a scathing article
about Airbnb on its website, exposing the company's inadequate response to
In response, Airbnb unveiled a battery of policy changes.
They include a pledge to verify all 7 million Airbnb listings by Dec. 15, 2020;
a new "guest guarantee," with the company promising to rebook or refund guests
if a listing does not meet accuracy standards; a 24/7 Neighbor Hotline for
customer support; and, in order to eliminate unauthorized parties, renewed
efforts to screen "high-risk" reservations.
"A lot of these measures are overdue," Guttentag said. "When
Airbnb was smaller and more niche, people were more ready to excuse things. But
now that it's a company worth tens of billions of dollars, which is going to be
public and worth more than any hotel company, with more rooms than any hotel
company, people have a different set of expectations."