Airbnb was dealt a setback in one of its most important markets Tuesday as voters in a New Jersey city approved restrictions on short-term rental companies in a hard-fought referendum.

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The vote in Jersey City was lopsided in favor of the restrictions with early returns showing 70 percent voted for restrictions, according to Bloomberg.

Airbnb going down to defeat despite spending at least $4.2 million on an effort to sway voters while its opponents, including the hotel industry.

The ballot question asked residents’ permission to limit rentals to 60 days a year if the owner does not live on site. It also asks that no rental units would be allowed in buildings that already have more than four rentals, namely high-rises.

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“The stakes are very, very high for Airbnb,” Jersey City Mayor Steven Fulop told Bloomberg, adding that expansion is key for Airbnb’s initial public offering, which is set for 2020.

Critics of Airbnb took to the streets to protest Airbnb’s policies, claiming it is destroying neighborhoods by increasing property values. Already, in Jersey City, the median home costs nearly $488,000 and median rents are about $3,000, double the national medians.

The Manhattan-based Hotel Trade Council also came out against Airbnb, pouring $1 million to support the proposed rules in Jersey City, one of the state’s fastest-growing metros.

Airbnb has spent $4 million to fight against the hotel union. Spokeswoman Liz DeBold Fusco said the group is trying to “make it impossible for people to rent their home,” and that some of the proposals were “crafted at the behest of the hotel industry’s special interests.”

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Officials at Airbnb fear the new proposed regulations would mean an outright ban on listings in New Jersey and that it could mean an end to the company altogether, which pulled in $16.7 million for hosts over the summer and turned an $18.7 million operating profit in 2018.

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Fulop, on the other hand, said the rules are commonsense and not unlike what other cities have already enforced. “The ordinance is not a ban. We want to make home-sharing fair.”