Jersey City Joins Push to Block Airbnb
- Nov 08, 2019
Airbnb suffered another setback this week when Jersey City voters overwhelmingly approved measures to clamp down on the short-term rental platform, a development that follows Boston cracking down on the company earlier this year.
The new rules in Jersey City bar renters from listing their apartments on the site as well as owners who don’t live on-site. Homeowners will be allowed to rent out portions of their homes but must be present during a guest’s stay. The impetus for the rules came from a coalition of the hotel industry and a hotel workers union, which spent about $1 million in a campaign against Airbnb, according to The New York Times.
Short-term rental platforms have been around for years, and though there are several other competitors in the market, Airbnb is the biggest and the most well-known. As of August, after the company’s most recent round of funding, Airbnb is valued at $30 billion. In New York City alone, there are more than 50,000 homes available for rent on the website. Though it’s the biggest market for Airbnb in the country, the laws surrounding whether Airbnb is actually legal are complicated, often differing between each city and locale.
New York City and Airbnb have been at odds over the last several years. Many that oppose Airbnb’s platform say it accelerates gentrification in some neighborhoods, while Airbnb says it helps homeowners stay in their neighborhoods by delivering passive income.
It all begs the question—how much does Airbnb really impact the multifamily market?
According to experts, not much.
“Generally speaking, Airbnb has not had a major impact on the multifamily market, at least not on the surface for valuations and transactions” said Michael Tortorici, executive vice president of investment sales at Ariel Property Advisors, a New York City-based real estate brokerage.
He admitted that any impact would be hard to measure from a data standpoint and for multifamily investors looking at properties, areas with a lot of Airbnb units aren’t a major driver.
“If anything, it’s more significant for smaller landlords,” said Tortorici. “Or even to an extent, rent-regulated buildings or apartments.”
Ingrid Gould Ellen, a professor of urban policy and planning at the New York University Furman Center for Real Estate and Urban Policy, said she doesn’t expect Airbnb’s newest regulations to have a large effect on the rental market, except in areas with a large amount of vacation homes.
“In most markets, the price of multifamily housing should be driven more by the strength of the long-term rental market,” said Gould Ellen.