After months of heated debate, New Orleans City Council passed a pair of new short-term rental laws on Thursday, limiting STRs to one-per-square-block in residential areas and imposing stricter penalties on STR owners who violate the city’s rules.
But council members added a last-minute “release valve” measure to allow residents to apply for exceptions to the square-block cap, a move applauded by current short-term rental owners and disdained by critics.
“There’s no solution we’re going to come up with today that’s not going to hurt people, because it’s unavoidable,” said council president JP Morrell.
Thursday’s vote is the culmination of the council’s sprint to pass new rules governing the controversial vacation rental industry before the end of the month, after a federal court found the city’s former regime unconstitutional in August last year.
Under the city’s 2019 law, 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 it – essentially proving the building was their primary residence. But the court deemed that requirement discriminated against out-of-state owners.
The newly approved rules – centered around density limits – are the city’s attempt to rein in short-term rentals in neighborhoods while complying with the court’s decision.
The council’s one-per-square-block limit in residentially-zoned areas is more restrictive than a one-per-blockface (or side of the block) cap recommended by city planners earlier this year.
The square-block limit will likely be felt most acutely in the Marigny neighborhood. According to an analysis by the Jane Place Neighborhood Sustainability Initiative, a housing justice group, as of December, there were 127 active city permits for short-term rentals in residential zones of the Marigny. With the square-block limit in place, 79 will be allowed, according to Jane Place.
In other neighborhoods where short-term rentals are popular – including the Tremé, Bywater, Central City and Lower Garden District – more short-term rentals will be allowed under the square-block cap than currently have city permits, according to Jane Place.
Many public commenters implored the city council to pass tight restrictions in order to preserve the character of neighborhoods, and open up more housing for long-term residents – who make the culture that tourists come to revel in.
“I want to start a family, and I literally cannot afford the rent of an additional bedroom,” said Mary Jacobs, a professional comedian, at Thursday’s meeting. “I deserve, and all of my friends deserve, to own homes in the city where we make art, where we make this place what it is.”
The rules go into effect July 1, but before then, the city will need to create a lottery system to decide which property owners will get to keep their permits when the square-block rule is enforced. The procedures of the lottery are up to the Department of Safety and Permits.
But council member Freddie King introduced an amendment a day before the meeting that creates a loophole for those who lose out on that golden ticket. The council approved the controversial amendment on a 5-2 vote. Council members Eugene Green and Oliver Thomas voted against it.
For any given square block, two additional property owners can apply for an exception to the cap. Neighbors who live within 100 feet of the property lines will be notified so they can weigh in, and applications will undergo review by City Planning Commission staff.
Then the council itself would have a final say on whether or not to grant the exception.
Short-term rental owners, who say they rely on the income to cover rising housing costs, expressed gratitude for King’s measure.
“I don’t come from generational wealth. I’m the product of a teen mother, and I became a homeowner,” said Alex Robinson, who uses a room in her home as a short-term rental. “I agree with council member King’s amendment for allowing additional permits if locals don’t get selected in the lottery, and the neighborhood allows it.”
But critics warned that these exceptions degrade the one-per-square-block limit, a measure that many housing advocates and neighborhood association leaders already viewed as a compromise on a stricter, outright ban on short-term rentals in residential areas.
And some cautioned that the exception process invites political preference.
“The graft, bribery and favoritism that this opens up is absolutely incredible,” said Mark Schettler, a service industry worker advocate.
For those seeking a new short-term rental permit, the operator of a short-term rental in a residential area will now need to prove they live onsite. Operators can be the owner of the property, or a tenant. Both owners and operators will need to be 18 or older and a “natural person,” not a business entity like an LLC.
The operator will also need to prove they live at the property, and will need to be available to resolve potential problems – like noise or trash complaints – within an hour.
Both owners and operators will be limited to one STR permit each. Technically, these new permits will be “non-commercial;” the new rules eliminate the residential category altogether.
Permits can now be revoked if a short-term rental racks up three “quality of life” violations, like excessive noise or public drunkenness. Operators or owners who have their permits revoked would then be barred from re-applying for up to five years. And properties themselves will also be banned from operating as a short-term rental for up to five years when sustained violations arise.
And now, neighbors will be able to file their own claims against short-term rental owners who violate the city’s laws.
Housing advocates and short-term rental owners have found common cause over stricter enforcement measures, calling out the city’s historically lax enforcement of violators. Airbnb listings outnumber permitted short-term rentals by three to four times in neighborhoods where vacation rentals are popular, according to Jane Place.
City council also passed a requirement that short-term rental platforms, like Airbnb, provide more data to the city to help crack down on violators.
“This is something that we have been working toward for such a long time, constantly threatened as to why we couldn’t do this, or why it would never work, or why it wasn’t possible,” said council vice president Helena Moreno, to applause. “But we don't believe that. And now we've actually seen that other cities have been able to have the platforms turn over the data to them.”
In the meantime, the council extended a temporary ban on new non-commercial permits, to allow all short-term rentals to come under the same regime this summer.
And council members said they plan to address short-term rentals in commercial areas going forward.
The council took an early step on March 9, when they placed a temporary moratorium on new commercial short-term rental permits in certain historic, mixed-use zones, a move aimed at stemming investors from scooping up properties as the city overhauls its rules governing STRs in residential areas.
And at Thursday’s meeting, the council directed the City Planning Commission to study the impacts of commercial STRs and recommend updated regulations.
Council president JP Morrell said the push to pass these new, non-commercial short-term rental laws has been the council’s “last best effort” to rein in the industry here. And if problems continue to arise with “these greedy platforms that refuse to be regulated,” Morrell said even more drastic measures will be needed.
“There won’t be short-term rentals in the city of New Orleans. I’m done,” he said.
