To hear City Hall tell it, New Orleans is the first city in the world to bring the short-term rental (STR) service Airbnb and others like it to heel. Though Airbnb has been operating in New Orleans for years — completely against city ordinances — enforcement has been nearly nonexistent. That, the council assured us after its Dec. 1 vote on new STR rules, will soon change. Mayor Mitch Landrieu agreed, calling New Orleans "a model for other cities trying to limit, regulate and tax short-term rental platforms."
While the council got some unprecedented concessions from Airbnb — including a requirement that the company turn over some of its data to the city to aid in enforcement — much of the legislation favors STR operators. STR opponents wanted to ban whole-home rentals, which have turned residences in many New Orleans neighborhoods into full-time hotels. The council instead approved three classes of STR licenses: "accessory" allows on-site homeowners (with homestead exemptions) to rent spare bedrooms or half-doubles year-round; "temporary" allows whole-home rentals (up to five bedrooms) 90 days each calendar year; and "commercial" allows whole-home rentals year-round in non-residential zones, up to five bedrooms. In addition to getting host data from companies like Airbnb, the city also will collect taxes and fees from hosts — and can fine violators up to $500 a day (and shut off their utilities).
Officials may claim they’ve gotten the better of STR companies, but other cities have enacted far more stringent policies.
At-Large Councilman Jason Williams, who co-authored the new ordinances with At-Large Councilwoman Stacy Head, said, "Although it may not feel like it, today was a win for those who are completely against whole-home rentals." It doesn't feel like a win to STR opponents, however. Though STR supporters emphasize that average people need the money they make renting out a spare bedroom, the analytics site AirDNA says two-thirds of U.S. short-term rentals are whole homes — and in New Orleans, it's more than 75 percent.
District D Councilman Jared Brossett and District A Councilwoman Susan Guidry opposed the ordinance. Brossett suggested requiring proof of a homestead exemption to operate any STR, but that move failed, leaving the door open to out-of-town landlords buying up properties to turn into mini-hotels.
The new rules also ban STRs in the French Quarter — a major concession to the local hospitality industry. However, that will push STRs into nearby residential neighborhoods like Treme, Faubourg Marigny and Bywater, which already are grappling with hundreds of illegal STRs.
New Orleans officials may claim they've gotten the better of STR companies, but the truth is other cities have enacted far more stringent policies. Berlin has outlawed whole-home rentals entirely, while New York and San Francisco (where Airbnb is based) have established a "One Host, One Home" rule that's a version of what Brossett proposed.
City officials say the new regulations (which go into effect April 1, 2017) will put teeth into New Orleans' heretofore toothless enforcement. We hope that's the case. A glance at the thousands of illegal STRs on Airbnb's website shows that, until now, the city has done little to curb the problem.