20,000 signatures gathered in effort to overturn Jersey City short-term rental law

More than 20,000 signatures have been submitted to the Jersey City, New Jersey, government in a bid to overturn a strict new short-term rental law recently passed by the City Council.

The city requires 6,700 valid signatures to get the Airbnb-backed proposal on the ballot. The City Clerk’s office must now verify the signatures; if enough are validated, then the City Council can either repeal the short-term rental ordinance or send it to voters. 

The new ordinance was passed by the council last month amid concerns that short-term rentals are adversely affecting the supply and affordability of permanent housing as well as the character of neighborhoods. Currently, it’s estimated that approximately 7 percent of all downtown rental units are short-term rentals.

The law prohibits short-term rentals in buildings with more than four units and limits short-term rentals when the owner is not on-site to 60 days per year. Owners of buildings with four or fewer units may offer up two of those units for short-term rental if they live on-site, and short-term rentals are allowed in condominiums with approval of the condo board. Renters are not allowed to offer up short-term rentals.

Operators are require to obtain a permit from the city, which must be renewed every year, and the owner or an agent must be available 24 hours a day, seven days a week to respond to issues within two hours.

The new law goes into effect on January 1, 2020. Existing short-term rental contracts are allowed until January 1, 2021.

The law amends a previous law, passed in 2015, that legalized short-term rentals. At the same time, the city started requiring short-term rental guests to pay the same city occupancy taxes that hotel guests pay.

Short-term rental operators in Jersey City are also required to collect lodging taxes from guests and pass them on to the state under a new state law that went into effect October 1. Under that law, New Jersey short-term rentals are subject to state sales taxes and hotel occupancy fees.

Currently, short-term rentals facilitated by real estate agents are exempt from state lodging taxes. However, a bill recently passed by the state legislature would change the law to extend the tax exemption to short-term rentals that are privately listed, which is the case for many rentals on the Jersey Shore. The bill requires Governor Phil Murphy’s signature in order to become law.

Short-term rental operators must register with the state for tax purposes before they can start collecting lodging taxes from guests — unless all of their sales transactions go through an online rental platform. In that case, the platform is responsible for collecting taxes and the operator doesn’t need to register.

HomeAway/Vrbo collects state sales taxes, state occupancy fees, and Meadowlands Regional Hotel Use Assessment fees from guests on behalf of its New Jersey hosts.

Airbnb also collects all the required state lodging taxes, along with municipal taxes for Jersey City and Elizabeth.

For hosts required to collect lodging taxes themselves, MyLodgeTax can automate and simplify lodging tax compliance, ensuring that vacation rental operators charge the correct rates and file complete tax returns on time. For more on short-term rental lodging taxes in New Jersey, see our state Vacation Rental Tax Guide.