New Orleans' best and worst quality is that people want to be here. In the last several years, the city has ranked on dozens of "best of" lists, while also ranking among one of the worst places for health, affordability — or rent. This month, CNN ranked New Orleans as the sixth worst city for renters, citing a 9 percent hike in rents and a 1.5 percent income decline since 2009.
While wages haven't met the rising rent costs, neither has the quality of housing. Louisiana tenants also have fewer rights than renters in other Southern states.
Meanwhile, New Orleans' tourism is booming. According to an annual study from the University of New Orleans Hospitality Research Center, the city hosted 9.52 million visitors in 2014, a nearly 3 percent increase from 2013. It was the biggest year in tourism since 2004, the year before the federal levees failed, when the city hosted 13 million visitors. These visitors are booking hotel rooms. But there are a growing number of short-term, private home rental services like Airbnb offering other options for prospective visitors in the trendier-than-ever city. According to the Alliance for Neighborhood Prosperity, more than 100,000 people stayed in New Orleans private home rentals like Airbnb in 2013.
The New Orleans City Council faces two seemingly disparate housing-related issues being mulled behind the scenes: the regulation of Airbnbs and the creation of a rental registry to hold landlords accountable for their properties. While the latter aims to protect residents from slumlords, the other could provide a framework that housing advocates say may start a gold rush to turn attractive properties into overnight moneymakers — and take many potential homes off the market.
"[Hurricane] Katrina really changed the housing affordability picture," said Kate Scott, assistant director of the Greater New Orleans Fair Housing Action Center. "We're a city based on the service industry and tourism economy. Low wages. Before Katrina it was possible for people to find housing they could afford, and that's just become virtually impossible for people finding housing in the city. There are a host of other factors people have to deal with. Maybe they can find an apartment they can afford outside the parish, but then there's no transportation infrastructure for them to get to and from work."
Not only has the affordable housing market diminished significantly over the last decade, what is available often is in shabby if not deplorable condition, and many residents spend more than 40 percent of their incomes on rent.
The cost of housing continues to rise, but the quality of housing hasn't kept the same pace, according to Monika Gerhart, senior policy analyst with the Fair Housing Action Center. The organization's mission is to address housing discrimination, but most of the calls it receives are from people seeking rental assistance or looking for someone to turn to while struggling with poor housing quality.
"We do have a full caseload of housing discrimination — violations of the Fair Housing Act, filing HUD complaints or lawsuits on behalf of our clients to enforce their fair housing rights," Scott said. "But by far, the most types of phone calls we get are around housing affordability and poor quality of rental housing in the city and people not having any recourse for that."
The U.S. Department of Housing and Urban Development estimates New Orleans renters spend an average of 41 percent of their income on rent. According to the Fair Housing Action Center, 66 percent of residents in District B — which includes large swaths of Mid-City and Uptown, from Freret and Broadmoor to St. Thomas and Central City — are renters, a higher percentage than any of the other City Council districts. More than half of those residents spend more than 30 percent of their income on rent, w hich the U.S. Census describes as "housing cost burden." That kind of overspending is common throughout New Orleans. District D is a large district that includes parts of Treme, St. Roch and Gentilly, among others, and nearly three-quarters of the district's renters are cost-burdened. Property value throughout the district has climbed as much as 125 percent since 2000, while the city's cost of living has remained stagnant.
Worse, residents aren't getting a better quality of life for what they're spending. Of the more than 62,000 rental properties in the city, nearly 50,000 needed some kind of major repair, while thousands of other properties had mold, water leakage, rodents and other issues, according to data collected by the Fair Housing Action Center.
"Substandard, poor-quality housing adds another cost to families," Gerhart said. "They may need to lose work due to illness, increased doctor visits, increased displacement. People need to move when they get no recourse. There are a lot of costs associated with substandard rentals beside the obvious, that it's a public health issue."
In February, District B City Councilwoman LaToya Cantrell and At-Large Councilman Jason Williams began publicly discussing the creation of a citywide rental registry, which they say would provide long-overdue oversight to protect New Orleans residents. Many landlords, however, feel it's simply an opportunity for the city to collect fees and fines and may end up hurting "good" landlords by forcing them into regulation that they say already exists through code enforcement.
"It's not another burden on landlords in this community," said Loyola University College of Law professor Bill Quigley at the New Orleans City Council's Community Development Committee meeting on Feb. 11. "The idea that they're being crushed from regulation is just a total fantasy."
A proposed registry would create a database of rental property owners and their units, and then set an inspection schedule. The inspections would ensure properties are up to code and meet basic health and safety requirements. Unlike subsidized and public housing, private owners and landlords currently don't have to submit to any routine inspection. Renters can call the city's 311 number and file a complaint, but for many people, "nothing ever happens," Scott said. Similar registries exist in Southern cities like Dallas and Memphis, Tennessee.
New Orleans' Neighborhood Housing Improvement Fund (funded by a .91-mill tax) is intended to fix blight, signage and other neighborhood issues — but Gerhart says it's not used for housing.
"There are many tools in the city's toolbox, but we haven't been using many of them," said Gerhart, suggesting the city use the funds to make low-cost loans to landlords for repairs. "Most municipalities and most states are not lucky enough to have a housing trust fund."
For many residents, Airbnb and other short-term rental services have come to represent salt in the wound as the city's affordable housing stock diminishes. Airbnb's entry into New Orleans has built on the persistent fear that renting New Orleans homes short-term will transform neighborhoods into places reserved only for tourists. If that happens, where do the locals go?
Across the country, cities are slowly tackling short-term rentals. Louisville, Kentucky effectively sent out cease-and-desist letters to operators or forced them to pay substantial fines, while San Francisco requires Airbnb hosts to register as a business and be subject to permits and fees. Last year, the City Council voted in favor of tightening regulations on unlicensed short-term rentals, but how the city plans to enforce the hundreds of Airbnb listings is unclear.
Meg Lousteau — director of the Vieux Carre Property Owners, Residents and Associates (VCPORA) — fears that allowing Airbnb to operate in New Orleans prioritizes tourists over residents. French Quarter Citizens' Brian Furness, who co-chairs a short-term rental committee with the VCPORA, says those rentals can drive up the cost of housing in the rental market as more units become available for short-term use only.
"Airbnb is the biggest hotel in New Orleans," Furness said. "It's going to raise the price of real estate, because that's a more lucrative use, so properties that can be converted to short-term rentals can [be sold] for more. ... It's going to reduce availability, particularly in desirable neighborhoods."
The committee also is working with residents affected by short-term rentals to get the city to enforce laws already on the books. Last year, the City Council defined "transient vacation rentals" to address Airbnb's growing presence. While the council looks at possible comprehensive legislation for those rentals, Furness says it's the city's job to enforce what's already there — especially as licensed bed and breakfasts pay permits and fees associated with operating their business.
"Do you need to create a new class for lodging establishments when you have rules that exist now?" he said.
But holding landlords and "illegal" rentals accountable only begins to chip away at the systemic problems facing renters.
"We talk about Airbnb and affordability, but what about adjudicated properties, single-family conversions?" Gerhart said. "There's all kinds of ways we have invested in neighborhoods — but those investments don't account for the entire neighborhood."