By Maddie Orton
Mayor Ras Baraka announced this week that Newark has reached an agreement with Airbnb to extend the city’s 6 percent hotel tax to the website’s rentals.
“Not only do we think they should pay the fees everyone else pays, but we believe that they all should be regulated — that we should know who’s doing business in our city for safety reasons and other kinds of reasons as well,” Baraka said.
Is this potentially a way of raising revenue for the city as well? “All of it is always an opportunity to raise revenue,” answered Baraka.
An estimated $750,000 boon to the city in the first year. The decision comes on the heels of a similar announcement by Jersey City Mayor Steve Fulop in the fall of 2015. It’s a move that Airbnb encourages.
In a statement, Airbnb Press Secretary Peter Schottenfels told NJTV News, “Our community wants to pay their fair share, and we want to help them do so because to be regulated is to be recognized.”
Not everyone feels that way yet. A Newark-based Airbnb host told NJTV News she thinks the tax is premature. She sees Airbnb as a way of injecting outside money into the local economy and building a good name for Newark.
But fellow host Daniel Munro is fine with the tax and any additional scrutiny that might come with it.
“I mean, it was going to happen eventually,” said Munro, “Anything that makes my guests feel safer. If I can have the mayor’s seal of approval, that would be cool.”
With more than a quarter of all of New Jersey’s homicides last year occurring in Newark, it may come as a surprise to some that tourists choose it over surrounding options. But as Munro points out, the legality of Airbnb rentals in New York City is dicey.
“I’m assuming, also, I’m probably cheaper than what they would charge in Manhattan or Brooklyn,” he added. “So a lot of people who fly into Newark Airport can take the bus here and the PATH into the city.”
Munro works as a freelancer and takes home about $1,000 a month from his efforts on Airbnb. He pays federal taxes on those earnings and is happy to pay a hotel tax that goes toward the city he wants people to visit.
“If it’s a city tax, it supports the city,” Munro said. “I love the city, so I trust the mayor knows what he’s doing.”
The tax will also theoretically bring Airbnb prices slightly closer to hotel prices. The owner of Newark’s Robert Treat Hotel says the company has seen no hit from the proliferation of Airbnb, and a rising tide might float all ships.