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New Orleans could ban Airbnb, other short-term rentals in residential areas

A short-term rental in New Orleans.
Carly Berlin
A short-term rental in New Orleans.

As New Orleans prepares to overhaul its short-term rental rules, the city council could move to effectively ban short-term rentals in residential areas at its upcoming meeting Thursday, after months of rule changes and moratoriums that have wreaked confusion on the controversial vacation rental industry.

Two ordinances on the agenda for the council’s Nov. 3 meeting would prove a significant escalation in its efforts to reign in short-term rentals, if passed. One would remove the residential short-term rental permit type altogether, and a second would render all residential permits that have already been issued “null and void” and kill any residential permits currently in the application pipeline. An additional motion would direct the City Planning Commission to start a comprehensive study to consider new rules.

The ordinances could impact more than 1,300 active permits for short-term rentals in neighborhoods across the city, along with more than 750 pending applications.

The move comes as the council prepares to rewrite the city’s STR regulations for the third time since 2016, and after a federal appeals court deemed that a key provision in the city’s existing law was unconstitutional.

The staff of council Vice President JP Morrell, who introduced the ordinances, declined to provide more information on the proposals ahead of the Thursday meeting, and instead directed questions to the city’s Law Department.

Donesia Turner, the city attorney, said the two ordinances would prevent “nonconforming uses” for existing residential STRs, and would give the city a “fresh start” when new STR laws are adopted “next year.”

The last time New Orleans passed laws to reign in short-term rentals was in 2019. One of the central pieces of the city’s rules was a requirement that STR owners in residential areas live at the residences they rent out on platforms like Airbnb, by showing they have a homestead exemption for the property.

That provision was meant to limit what many critics saw as one of the most harmful impacts of STRs: out-of-town investors buying up whole homes across the city to rent out to tourists.

But in August, the 5th Circuit Court of Appeals ruled that the homestead exemption provision violates the commerce clause of the U.S. Constitution by discriminating against out-of-state property owners.

In attempts to comply with the ruling, the city council passed a motion in August that froze applications for new STRs in residential areas, and another in October that halted permit renewals for existing, residentially-zoned STRs. Short-term rentals in commercially-zoned areas like the Central Business District were not impacted by the temporary bans.

Their moves appear to have set off confusion at City Hall. At least one resident, who rents out the other side of her shotgun double as an STR, said she was able to get an extension on her permit through March 1 – even after the council passed its second, more restrictive moratorium on permit renewals on Oct. 20.

When asked about this case, a Mayor’s Office spokesperson said the new moratorium is currently in effect, and said the city “is not accepting renewals” pursuant to the council’s latest motion.

City council members have promised they will have new STR rules written by March, when all owners could re-apply for permits under a common set of rules.

It’s unclear yet what exactly the new rules will look like, but Morrell has promised they will be more restrictive than the 2019 regulations, potentially limiting the number of STRs on any given block-face, according to The Lens. The motion directing the CPC to study potential new rules also suggests capping the number of STR licenses per neighborhood or that one operator can hold.

In a written statement, Airbnb public policy manager Nia Brown said that the active moratorium and proposed ordinances “threaten the livelihoods of thousands of New Orleanians who now, more than ever, rely on income from home sharing to keep up with the rising cost of living.”

As the city drafts new regulations, Brown said “it is our hope that hosts are included in the conversation.”

In the meantime, some STR owners said they don’t know where to turn next: they’re worried about canceling reservations if they can’t keep their licenses, and about losing income they’ve relied on to pay their bills.

“We’re the babies getting thrown out with the bathwater,” said one owner who runs an STR out of a garage apartment behind her house.

Disgruntled STR owners showed up en masse to a City Planning Commission meeting on Oct. 25. Some had received an email from Airbnb the night before, asking them to attend.

“Urge city leaders to support local residents like you who host responsibly and bring financial benefits to your local community by welcoming travelers from around the world,” the email said.

But STRs ended up being bumped from the agenda because of the council’s move to institute the second moratorium, which nullified the first one. Many STR owners who came to City Hall said they had followed the city’s rules for years, and agreed that there needed to be policies in place to reign in larger companies that run STRs.

But some said they had relied on the income from STRs to fund home renovations, or even to afford their mortgages.

Rebecca Jostes is a vacation rental property manager for Rare Space Hospitality. She said she came to City Hall last week to represent homeowners she works with who were caught flat-footed by the city’s moratorium.

“They were able to go from renting to buying a home – and be able to do short-term renting – because the numbers worked,” she said. “And now they’re in a 30-year mortgage, and they’re freaking out.”

Carly Berlin is the New Orleans Reporter for WWNO and WRKF. She focuses on housing, transportation, and city government. Previously, she was the Gulf Coast Correspondent for Southerly, where her work focused on disaster recovery across south Louisiana during two record-breaking hurricane seasons. Much of that reporting centered on the aftermath of Hurricanes Laura and Delta in Lake Charles, and was supported by a grant from the Pulitzer Center.

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