After months of debates and public meetings over short-term rentals (STRs), their proliferation, and the impacts they've had in the city over the last several years, the New Orleans City Council passed a measure Oct. 20 — introduced by Mayor Mitch Landrieu's administration — that sets up a plan for short-term rentals advertised on platforms like Airbnb and VRBO.
The motion prohibits full-time whole-home short-term rentals in residential areas, but it will allow whole-home "temporary rentals" up to 90 days a year. Housing advocacy groups and residents have demanded the city prohibit all whole-home rentals. There are roughly 5,000 STRs in the New Orleans area; approximately three-quarters are entire homes and apartments.
The motion serves as a starting point to amend the city's Comprehensive Zoning Ordinance, the city's massive rule book for land use through which all property manners adhere.
Under the proposal, rental owners will need a license from the Department of Safety and Permits, and all rental types will be prohibited in the French Quarter (though commercial types are allowed in the 200-700 blocks of Bourbon Street).
"Accessory rentals" allow people to rent out a room or half of a double (in a property they own and live in) full time, with a maximum of six guests. "Temporary rentals" with a maximum of five bedrooms and a maximum of four units on the property can be rented up to 90 days a year. "Commercial rentals" with a maximum of five bedrooms and up to 10 guests per unit on the property can be rented out full-time in areas zoned commercial and mixed use.
Renters also will be required to have liability insurance, pay into the city's hotel-motel tax, and pay into the city's Neighborhood Housing Improvement Fund (NHIF). There also will be fees for temporary and commercial rentals that don't have a homestead exemption. For advertising a STR without a license, penalties may include daily fines, property liens, revocation of permits and discontinuation of electric service.
Deputy Mayor of External Affairs Ryan Berni says the city has worked out a plan for Airbnb and other platforms to share their data through quarterly reports. Opponents are skeptical, as the industry has been reluctant to share data despite similar attempts in cities across the U.S. — and the city will rely on four-month-old data in a city where STRs continue to mushroom. The companies are happy; in a statement, Airbnb spokeswoman Laura Spanjian said the company is "excited that New Orleans will be joining a growing number of cities that have recognized the economic benefits home sharing brings to residents and neighborhood businesses."
"We will be able to use their disruptive technology to disrupt them if they don't follow the guidance they lay out," said Councilman At-Large Jason Williams before his vote.
In August, the New Orleans City Planning Commission produced a lengthy report with recommendations to the City Council on how to regulate STRs. The City Council deferred voting on the motion until Oct. 20 — leaving just a few days before the report's 60-day window expired, which would have left the matter to the next administration. This was the first glimpse of Landrieu's "compromise" package.
"Our point was: we're not going through another start-from-scratch process," Berni told Gambit. He doesn't believe the recommendations from the CPC would've passed as is.
"I don't think there was a real consensus on where to go," he said. "There were various points of view, and trying to accommodate as much as possible and not just a handful or specific group of neighborhoods but as much as the city as possible, and trying to make it clear and easy to understand so we can enforce it."
The City Council will hear from the administration during budget hearings, which begin this week, about funding the department, which Berni anticipates will be self-sustained with permits and fees from the STRs at roughly $1 million.
Opponents frequently booed or called council members "sellouts" for what they believe is collusion with an industry that already has defied laws banning those types of rentals.
Breonne DeDecker with the Jane Place Neighborhood Sustainability Initiative told Gambit that "the shift of whole-home rentals solely into the temporary category at the last minute — after the community has spent years organizing and talking about a specific legalization scheme set up and put forth by City Planning — undermines the process and is so disrespectful to the community."
District D Councilman Jared Brossett cast the only "nay" vote. "Short-term rentals are eroding our character," he said. "Without (requiring the owners to have a) homestead exemption, I can't support what's being proposed."
Brossett criticized the "changing character" and commercialization of neighborhoods as housing costs continue to rise. New Orleans is in a housing crisis, he said, and the city has not addressed the housing taken off the market as short-term rentals increase.
Still unclear is whether the softening of the types of allowed rentals could allow mixed-use developments and commercial areas to turn over to STRs. New Orleans listings on Airbnb top hundreds of dollars a night. If STRs can operate full-time up to 90 days a year, residents fear those properties effectively are off the long-term rental market — landlords can make a killing in a week, particularly during peak tourist seasons, rather than relying on month-to-month payments.
Council members admit- ted they left a lot off the table. They'll be back to face the full ordinance in the coming weeks.