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Rule to limit New Orleans short-term rentals to 1 per square block advances; see next steps

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Carly Berlin
A sign on a Canal streetcar in January. The debate over the future of short-term rentals in New Orleans has flared up again, as the city prepares to re-write its rules governing the controversial industry.

The New Orleans City Council advanced a measure to limit short-term rentals to one per square block in residential neighborhoods at a special meeting on Thursday, a more restrictive limit than city planning officials recommended in January.

But some council members signaled their interest in loosening that density limit before they vote on a final version of the law on March 23. The council must pass a new law governing the controversial vacation rental industry before the end of the month, after a federal court found the city’s current law unconstitutional last year.

“There is no solution that this council can do legally that is not gonna pick winners and losers,” said council president JP Morrell.

Thursday’s vote came after hours of debate among affordable housing advocates, neighborhood association leaders, historic preservationists and short-term rental owners. Discussion mostly boiled down to one key point: how many short-term rentals, like those posted on Airbnb and Vrbo, should be allowed on any given block in residentially-zoned neighborhoods.

In January, the City Planning Commission recommended that short-term rentals in residential areas be limited to one per blockface, or side of the block. But dozens of residents – from all sides of the STR debate – came out to decry the blockface cap idea at a marathon public meeting that month. Airbnb owners argued that the measure was too restrictive, saying it could pit neighbors against each other, while housing advocates and neighborhood leaders called it out as far too permissive.

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Katelyn Umholtz
In January, the City Planning Commission suggested allowing one short-term rental per blockface, or side of the block, in residential neighborhoods.

And council members appear to have listened to the latter camp, many of whom advocated for a different solution: limiting short-term rentals to one per “square” instead, meaning one STR for each side of a four-block square. Council members Eugene Green, Oliver Thomas and Joe Giarrusso introduced an amendment to take up the square-block restriction.

At Thursday’s meeting, many commenters applauded the idea of the one-per-square-block limit, while also saying it’s the least the council can do to prevent the continued mass conversion of housing from local renters’ to tourists’ use.

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Katelyn Umholtz
On Thursday, city council advanced a measure that would limit short-term rentals to one per “square," meaning one short-term rental for each side of a four-block square.

“I’m in favor of the square block restriction, but I think that’s the minimum,” said Daiquiri Jones, a community organizer for the Jane Place Neighborhood Sustainability Initiative. “Honestly, I would be happy to see it all banned until either the platforms or city council can prove that this situation wouldn’t happen again.”

According to an analysis by Jane Place, if STRs were limited to one-per-block-face in the Tremé/Lafitte neighborhood, 508 would be allowed there. But if STRs were limited to one-per-square, 127 would be allowed.

But the group also noted that illegal short-term rentals far outnumber legal ones across the city. In Tremé/Lafitte, there were 410 Airbnb listings as of December, and only 89 had city permits. Jane Place estimates that 10% of all housing units in the neighborhood are whole-home Airbnbs.

Some short-term rental owners said they’re nervous about the possibility of losing extra income they say helps them cover rising housing costs if the council passes any kind of density restriction.

“I’m very much against the block square – I think it’s an overreaction,” said Amy Lewis, who runs an STR in Algiers Point that she said helps her make ends meet as a single parent. “People are going to be forced to sell their houses when these restrictions go into place.”

The council narrowly passed the square-block restriction: council members Giarrusso, Green, Thomas and Lesli Harris voted for the measure, while Freddie King, Helena Moreno and Morrell voted against it.

But the council can still change it ahead of their final vote in a few weeks. Moreno suggested a middle road between the one-per-side of the block and one-per-square-block option: allowing one STR per block, period. Council members also said they will discuss possible “relief-valve” measures – ways that STR owners can appeal the cap if there’s already another STR in their square block – at upcoming public meetings.

The city must pass a new short-term rental law before the end of March, a deadline imposed by a federal court. In August 2022, the U.S. Fifth Circuit Court of Appeals decided that a key provision in the city’s short-term rental law was unconstitutional.

That provision required that STR owners in residentially-zoned areas needed to prove they lived at the residence they rented out on platforms like Airbnb and Vrbo, by showing they had a homestead exemption for the property – essentially proving the building was their primary residence. But the court struck down that provision, deeming it “discriminated against interstate commerce.”

Now, the city must pass a new law to reign in short-term rentals: one that doesn’t revolve around an owner occupancy requirement.

In addition to the square block provision, the council also advanced a few other key changes to the current STR laws, endorsed by the planning commission. Those include a shift from owner to operator occupancy, limiting both owners and operators to a single permit, and requiring that both be natural persons, not business entities like LLCs.

The council will take up short-term rentals again at a committee meeting on March 14. There, they’ll discuss both the measure that advanced Thursday, and a separate one that deals with a possible lottery for permits and enforcement measures like penalties and permit fees. Then, on March 23, the council plans to hold a final vote on both ordinances.

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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