New Orleans residents, housing advocates mull new proposals for short-term rentals

By Alex Woodward

Short-term rentals would be limited to residential properties with an owner or permanent resident on site, and multi-unit buildings in business districts would be prohibited from turning more than 25 percent of those units into short-term rentals – those are some of the recommendations from the New Orleans City Planning Commission staff, which released its extensive 155-page report this week as officials look to revisit its year-old rules governing rentals on platforms like Airbnb.

As City Hall prepares for more public hearings before the City Council considers adopting new rules, residents and short-term rental operators and critics are hoping to shape new legislation, in the hopes of avoiding the failures and unintended consequences of the current and more permissive short-term rental laws.

Resident group the Short-Term Rental Committee held a public forum Sept. 20 to review the CPC recommendations, as well as the fallouts and impacts to neighborhoods and the city’s housing stock under the current rules.

Residents pointed to the dominance of whole-home rentals in residential areas, single operators with multiple properties, the displacement of renters (and potential voting power), and insignificant contributions from STRs into the city’s affordable housing funds.

“The city is not making back what we were promised,” said Allen Johnson, president of the Faubourg Marigny Improvement Association.

The CPC’s staff report largely agrees with the criticisms and concerns from housing advocates and residents from the last few years, particularly the impacts from the proliferation of “temporary” listings.

There currently are three types of STRs under the city’s current licensing and permit rules: among them, “temporary” rentals allow a whole home or apartment to be rented up to 90 days a year, which critics have said effectively takes it off the housing market, rather than act as a way for homeowners to earn some extra cash from renting their home when they’re out of town.

The proliferation of that type of rental, many from companies and developers with multiple listings at other properties, inspired the City Council to place a moratorium on most kinds of whole-home rentals earlier this year until it could draft new rules based on recommendations from the CPC staff report. The CPC staff will present its report Sept. 25.

“New Orleans is in the midst of an affordable housing shortage making every housing unit essential,” the report says. “Therefore, if housing units are being taken off the market for STR use that would otherwise be available to the city’s residents or if the proliferation of STRs is causing an increase in sale and rent prices, it is important to ensure the regulations for STRs are considering these factors as well as considering homeowners’ ability to benefit from the regulations.”

Breonne DeDecker, program manager with Jane Place Neighborhood Sustainability Initiative, pointed to one block of Kerlerec Street in the 7th Ward that at one point had 16 STR permits representing 40 bedrooms, able to house 74 tourists per night. Nine of those permits were held by operators that controlled 34 rentals.

While the CPC staff recommendations are a start, DeDecker says they don’t go far enough to address crucial failures of the current rules.

Jane Place helped assemble the Residents for Ethical and Sustainable Tourism proposal, supported by a coalition including Step Up Louisiana and the Greater New Orleans Fair Housing Action Center, among others, that would simplify the permitting system to allow one permit per person with a homestead exemption, without day limits, as it’s proved impossible to enforce them, the group argues. It also calls for a stronger data sharing and a shared enforcement model with the ability to delete illegally listed rentals

“We think our ordinance will massively simplify the permitting and enforcement process, saving time and resources the city needs,” DeDecker told Gambit.

Efforts to revisit New Orleans’ STR laws follow similar changes around the U.S. and elsewhere as cities and states begin to rein in proliferation and density of tourist rentals.

Under direction of the City Council, city planners looked at efforts in Austin, Charleston, Nashville and Savannah, where officials “expressed the same concerns regarding illegal listings and the inability to adequately regulate and enforce their regulations when the platforms do not cooperate with city laws,” according to the report.

“New Orleans echoes these concerns which is compounded by limited resources to properly enforce the City’s regulations or to adjudicate all of the properties illegally operating or violating current policy.”

DeDecker also proposes capping STRs in commercial areas to 15 percent of the building, rather than the CPC staff’s 25 percent, and attaching a one-to-one match for adding affordable units, which DeDecker argues the city could lean on to ease affordable housing needs in places like the CBD.

Others also expressed concern about potential issues or loopholes, should the city adopt the CPC staff’s proposals.

In a statement to Gambit, Cashuana Hill, director of the Greater New Orleans Fair Housing Action Center, agreed the recommendations “are a good start, but still include too many loopholes and giveaways that will let speculators exacerbate displacement and segregation in our neighborhoods.”

“We’re particularly concerned about the give-away of commercial permits on our transit corridors without any requirement for affordable housing and the failure to require Airbnb and other platforms to take down illegal listings.”

The CPC staff proposal sort of redraws the types of STRs currently available.

Instead, an owner or permanent resident would have to be present to be able to rent out up to three rooms in their home. Another category mirrors the current “accessory” rentals, allowing people to rent out one side of a double or similar arrangement with a homestead exemption, provided there aren’t more than four units on the property.

“Commercial rentals” would carry a cap of 25 percent or at least one per building, whichever is greater, and would prevent commercial buildings with residential units from renting out space on the first floors, an attempt to preserve ground-level retail or restaurant space. It proposed fewer restrictions for some Canal Street areas to encourage more use of vacant properties on that street.

The staff also proposed a possible fourth type of STR that would allow an owner or permanent resident to rent out their space up to 14 days a year, a “special event” rental during times of year like Mardi Gras or Jazz Fest. The Short-Term Rental Committee said putting a number on those restrictions already has proved difficult to enforce – people could list 14 days on one platform, and another 14 on another. Without strong enforcement assurance, the committee recommends the city put that proposal on hold.

The proposal also suggests the city open STR permitting to renters, with their landlords’ permission – but the Short-Term Rental Committee says while it may be a good idea for people other than property owners to participate in the platforms, it could be primed for abuse. STR developers could enlist employees or people to “work” for the owner.

The committee also wants the CPC to consider density restrictions on STRs by limiting STRs to one STR per block, and it opposes the CPC staff’s plan to open up the French Quarter to certain STRs.

STRs currently are banned in the neighborhood, except for some commercial types on a part of Bourbon Street. Residents in other neighborhoods have argued that it’s unfair no other neighborhoods have similar protections; the CPC staff report, in part, agrees, and suggests lifting the ban would ensure a level playing field and, potentially, ease the demands in the French Quarter’s neighboring areas like Treme and Faubourg Marigny.

Meg Lousteau with the Vieux Carre Property Owners, Residents and Associates said the ban’s “success ” in that area “should be replicated in other neighborhoods,” following a “market correction” that burst inflated home prices and rents in the French Quarter.

The report also recommends higher fees into the Neighborhood Housing Improvement Fund, up from $1 to $8 per booking, and requiring platforms register with the city and obtain an annual license to operate in New Orleans – and collect and remit annual taxes.

STR platform HomeAway, which pitched its own ordinance with input from several community meetings held in August and September, said the CPC staff report is a “step in the wrong direction.”

“Neighbors and short-term rental stakeholders across the city want fair and effective policies that work – not restrictive and onerous bans,” the group said in a statement this week. “This plan will only harm New Orleanians who have played by the rules and invested in their community.”

“Rather than punishing law-abiding short-term rental owners, the CPC and City Council should look to create smart regulations that improve New Orleans communities while ensuring responsible homeowners have an avenue for renting out their whole-home property,” the group said.

This article provided by NewsEdge.