Jersey City has made an agreement to officially recognize Airbnb, the highly popular online company that lets people rent out their home to complete strangers.

Airbnb
The Airbnb app is displayed on a smartphone on April 21, 2014 in San Anselmo, California. (Photo Illustration by Justin Sullivan/Getty Images)
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“I’m a big believer that you can’t fight technology and progress, and Airbnb is rapidly expanding even without official permission,  so the idea is to find a reasonable compromise that allows it to co-exist with regular hotels in Jersey City, that benefits the city and at the same time doesn’t fight technology,” says Jersey City Mayor Steve Fulop.

It's a major contrast to New York City, which considers most Airbnb rentals illegal. A government report last year found most Airbnb rentals in NYC were violating zoning or other laws.

Fulop said the agreement calls for Airbnb to pay a tax to the city, “so residents will accrue the benefit, that will be nearly 1 million dollars, and Airbnb will essentially be allowed to operate within Jersey City.”

He said the agreement calls for Airbnb to be treated the same way a hotel is treated in Jersey City, but a spokesman for the city says the agreement does not include any provision for a 7 percent sales tax to be paid to the state, something that all hotels must do.

Besides paying a city tax of about $1 million a year, Fulop said the deal would also “provide a million dollars worth of insurance per each rental space by Airbnb, it would set perimeters around duration, no more than 30 days."

“Right now, they’re operating anyway, it’s impossible to police it, so the goal was to find a way to make it work, and that’s what they’ve done,” Fulop said.

He said the agreement will benefit Jersey City in other ways as well.

“This facilitates additional tourism and I think ultimately this only is going to promote Jersey City truly as an innovative place that understands that changing times and technology means a changing city,” he said.

Joe Simonetta, the executive vice president of the New Jersey Hotel and Lodging Association, said his group doesn’t oppose the idea of Airbnb, which he describes as “a new technology, a new product meeting the needs of a specified group of people.” However, he believes there should be parity when it comes to collecting taxes.

“If you’re going to act like a hotel, if you’re going to sell like a hotel, you should be treated as a hotel,” he said. “You should have the same type of oversight by government and pay the same type of taxes.”

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