Since the city’s original legalization of short-term rentals (STRs) in 2017, the rental of properties by platforms such as Airbnb and Homeaway has boomed. As a result, city councilmembers and community advocates called for a revision of the existing laws, and an exploration of the impact of STRs on the city. In particular, advocates called out STRs impact on a loss of affordable housing, increasing property taxes, and subsequent evictions of long-time city residents. After more than a year of deliberations and conversations, the New Orleans City Council finally reached a consensus and passed legislation in August 2019. The resulting ordinances, which took effect December 1, 2019, aimed to address city residents’ main concerns about the effects of the short-term rental industry in the city.
These ordinances work to preserve New Orleans’ historic neighborhoods by requiring STR operators to also reside at the rental property in all residential areas. These owners must also obtain homestead exemptions to prove the property is their primary residence. This marks a significant shift from the previous regulations, which allow owners to rent any of their properties, leading to an increase in investment properties used exclusively for STRs.
Further, the ordinances establish a new enforcement system for STR registrations, a major improvement considering some study estimates conclude that less than 2,500 of the total 8,500 existing STR units in the city are registered. These enforcements maintain the already tight bans for STRs in most of the French Quarter and extends similar bans to the Garden District. The new ordinances also place hard caps on commercial buildings, allowing only 25% of units to go to STRs. However, exemptions are in place for existing commercial properties with STRs exceeding the new 25% of units cap.
Additionally, STR platforms like Airbnb and HomeAway may lose their city permits if they do not ensure their listed properties are registered and compliant with the city’s new and existing regulations.
Despite these two groundbreaking changes to the city’s previous short-term rental regulations, the City Council still failed to take a hardline stance on certain community recommendations. Namely, new regulations failed to include further studies of a proposal to require large-scale rental operations to include affordably priced units. Additionally, the council opted to not freeze issuing permits until the new regulations went into effect, allowing more operators to flood the market and subsequently qualify as “grandfathered-in” properties. However, when asked about these overlooked components, councilmembers made it clear the conversation about STRs in New Orleans is not over.