By Jaimie Julia Winters
Over 300 Montclairites open their homes to short-term renters through sites such as Airbnb, FlipKey or hometogo. While about a dozen towns throughout New Jersey have regulated or altogether banned short-term rentals under local boarding house laws, Montclair does not regulate them, said Deputy Mayor Sean Spiller.
“They would be considered a commercial use and meet the state definition of hotel. As such, I do not believe they would not be permitted in residential zones,” said Spiller.
But a visit to Airbnb.com and hometogo.com show hundreds of homes in residential areas of Montclair that are available for overnight guests. Renters pay on average $76 a night to rent a room in Montclair through Airbnb. Entire homes with a pool go as high as $2,256 a night.
Towns that ban the rentals, such as Fort Lee and Closter, cited noise and parking issues with residents renting to overnight stays. No notable noise incidents pertaining to short-term rentals in Montclair have been reported, said Lt. David O’Dowd of the Montclair Police Department .
In June, Westfield passed an ordinance regulating short-term rentals there. Residents are limited to renting no more than 60 days per a year, two bedrooms and four guests, if not renting the entire house. There must be an in-town property manager available at all times and information must be posted in the rental unit such as phone numbers for police, fire and code enforcement officer; the name and number of the property manager; location and number of available parking spaces available; and trash and recycling pick-up days. And finally, no commercial or social events will be conducted by the renter. “Short-term rental use shall be conducted in a manner that does not materially disrupt or adversely affect the town,” the ordinance reads.
Rutherford considered banning the rentals last year, then tabled regulating the short-term rentals after residents said they counted on the income to stay in their homes and spoke against such an ordinance.
According to Airbnb New Jersey has about 8,100 hosts with each host averaging $7,300 a year for renting out a spare room. Hosts can make as much as $2,584 in Montclair. Airbnb covers insurance for hosts in the case of property damage or if a guest gets hurt. It takes out three percent as a service fee.
A law signed by Gov. Phil Murphy in June will now put short-term rentals at the same level of hotels and motels when it comes to taxes. Beginning in October, short-term renters will have a 6.625 percent sales tax and 5 percent hotel tax tacked onto their bill.
Currently, the state imposes the sales and use tax and the hotel and motel occupancy fee on hotel and motel rooms. The current law also authorizes municipalities to impose various taxes and fees, on the rent for each occupancy of a room or rooms in a hotel in those municipalities. However, there is no tax or fee imposed on short-term rentals.
“Our laws need to be updated to keep up with changes brought about by new technology,” said Assemblywoman Annette Quijano Quijano, the bill’s sponsor. “The fact that taxes are not paid for stays at locations rented through sites like Airbnb but are applied to stays in hotels is an unfair advantage that hurts the hospitality industry and takes funding away from municipalities for important programs. This bill levels the playing field and provides tax fairness for the entire hospitality industry in New Jersey.”
Bill sponsor Assemblyman Raj Mukherji said although online lodging marketplaces have allowed thousands in New Jersey to make extra income and have provided Garden State tourists with another lodging option, the current system gives them an unfair advantage.
“Rather than penalizing the choice to stay in a hotel or motel, the state should ensure that everyone pays the same taxes for lodging,” said Mukherji.
Accommodations listed with a real estate agent or real estate broker licensed by the New Jersey Real Estate Commission and all permanent residential rentals would be exempt under the new law.
The bill also exempts charitable, non-profit organizations from collecting the taxes and fees when providing transient accommodations in furtherance of the non-profit’s mission.