Local Ordinance Restricting Short-Term Rentals Survives Constitutional Challenge

A federal New Jersey District Court upheld the constitutionality of a Jersey City ordinance that restricts private property owners’ use of household attributes as small-expression rentals. 

The lawsuit, introduced by operators of a lot of shorter-phrase Airbnb residences, challenged the constitutionality of an ordinance that restricts short-phrase rentals in Jersey City. Beneath the ordinance, non-proprietor-occupied properties can’t host far more than sixty (60) rental evenings per yr, and citizens occupying houses as a leasing tenant are totally prohibited from featuring brief-phrase rentals as a sublease.

Plaintiffs argued the ordinance’s outcomes amounted to an unconstitutional regulatory taking, the place a governmental motion absolutely denies all economically productive use of assets devoid of just trigger or compensation. Plaintiffs further more argued the ordinance rendered their properties’ financial prospects worthless and deprived their constitutional home legal rights to go after the short-expression rental small business.

The aggrieved Plaintiffs outlined how they invested sizeable sums into their qualities with precise intentions of capitalizing on the Airbnb shorter-term current market prior to the ordinance’s enactment. To bolster their statements, they cited a formerly enacted, but now out of date, 2015 Jersey Town Ordinance legalizing limited-phrase rentals to illustrate the 2019 prohibiting ordinance was handed for arbitrary and politically-motivated explanations.

The Court granted Jersey City’s movement to dismiss conveying that the Metropolis sufficiently confirmed the ordinance served the public’s passions of expanding housing inventory and preventing sizeable nuisance. Even though limiting in nature and inconsistent offered the City’s heritage of supporting limited-term rentals, the court docket held the ordinance did not entirely wipe away Plaintiffs’ properties’ financial uses, a essential aspect to demonstrate an unconstitutional taking assert. These types of future dropped gains have been also deemed speculative to guidance a total deprivation of house legal rights.

In April of 2021, Plaintiffs filed an Attraction of the dismissal with the Third Circuit Court of Appeals. Oral arguments were listened to in November, 2021. A conclusion is pending.

Nekrilov v. Town of Jersey City, 528 F. Supp. 3d 252 (D.N.J. 2021).