Vainieri Huttle "Airbnb" Bill to Address Municipal Concerns over Short-Term Rentals Clears Assembly Panel

(TRENTON) - Legislation sponsored by Assemblywoman Valerie Vainieri Huttle to address the lack of regulation in short-term rentals made popular by online marketplaces like Airbnb and the impact they have on residential neighborhoods was released Monday by an Assembly panel.

Currently, short-term rentals made available through transient space marketplaces like Airbnb are not regulated. Some municipalities have expressed concern about this lack of regulation, the inability to know who may be staying in their communities and the impact on quality of life.

In response, several Bergen County municipalities have passed ordinances requiring a minimum stay of 30 days, effectively banning transient rentals. The bill would codify that municipalities are authorized to pass such ordinances, while also creating a licensing and regulatory scheme.

"The current practices of short-term rental businesses lack the necessary safety precautions for our municipalities," said Vainieri Huttle (D-Bergen). "We want residents and tourists to enjoy the options provided by companies like Airbnb, but not at the expense of neighbors who live there on a permanent basis. This legislation creates a baseline registry that municipalities can implement as they see fit."

The bill (A-4441) would allow municipalities to license the short-term rental of a residential unit, also known as transient accommodation, to a transient guest through a transient space marketplace, such as Airbnb and FlipKey. The bill does not apply to seasonal rentals, which are defined under the bill as a timeshare or a dwelling unit rented for no more than 125 consecutive days for residential purposes by a person having a permanent residence elsewhere.

The bill would permit the governing body of a municipality, by ordinance, to prohibit an owner of property from offering it as space for accommodation through a transient space marketplace for a period of 30 days or less when that property is the owner's primary residence.

Under the bill, any owner or tenant would be prohibited from offering their residential property as a transient accommodation through a transient space marketplace until they apply for and receive a short-term residential rental registration number from their municipality. 

If not present on the property, a registered host would be allowed to rent their entire residential unit for up to 30 consecutive days per year. If present on the property, a registered host would be allowed to rent a partial space in that unit for an unlimited number of days.

Under the bill, a registered host who owns a multiple dwelling may only register a single residential unit within the building. It would also limit a registered host who owns or leases more than one residential unit in a building to register only a single residential unit within the building.

In addition, a municipality would be allowed to license and regulate the residential property of a registered host offering space for accommodation through a transient space marketplace, when a portion, or the entirety, of the primary residential unit is used as a space for accommodation of a transient guest. 

A municipal ordinance adopted pursuant to the bill would have to require the following in order to conduct short-term residential rental: 

  • Require the registered host to be the owner or legal tenant of the unit; 
  • Restrict registration to only one unit per building when a registered host owns a multi-unit dwelling;
  • Require the registered host or the transient space marketplace to demonstrate that they have property liability insurance in the amount of at least $500,000;
  • Restrict registration to units that do not have any outstanding municipal code violations;

  • Restrict registration to one unit per host; 
  • Require the registered host to have a valid lease at the time of an application for registration.

Under the bill, the registration of a registered host's primary residence would not supersede any lease agreement, homeowner association bylaw, covenant, condition, or restriction.

The bill would authorize municipalities to impose fines on hosts that do not register. The municipalities would not be allowed to impose fines greater than $100 per day.

The bill would take effect immediately.

The bill was released by the Assembly Tourism, Gaming and the Arts Committee.