New Orleans may tighten rules on short-term rentals like Airbnb

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Just two years ago, New Orleans passed a series of laws aimed at regulating short-term rentals to protect residents while allowing the city’s tourism industry to continue to bloom–but critics say that hasn’t happened.

New Orleans’ original short-term rental laws seemed at the forefront of efforts to legalize and regulate the industry back in 2016. Airbnb even negotiated elements of the regulations with the city and hailed them as a model — a tool for rule enforcement and taxes and fee collection.

But opponents say the laws were too lenient, allowing a residence to be rented for nearly every weekend night a year. That effectively encouraged property owners to rent their housing short-term instead of taking on long-term tenants. Critics indicate the current regulations have allowed proliferation of “whole-home” short-term rentals that are often owned by out-of-state investors, not residents. In the most popular neighborhoods, short-term rentals make up one-tenth of the residential stock, according to a HuffPost analysis.

Meanwhile, there is an exodus of full-time neighbors amid a continued shortage of low-income housing, in addition to higher property tax assessments. For many residents, Airbnb, HomeAway and similar web-driven operations have brought tourist headaches along with their dollars.

So the city is trying again.

“We were sold a bill of goods — that it was going to be mom-and-pop,” Council member Kristin Gisleson Palmer said, alluding to arguments that the original regulations were supposed to aid homeowners who wanted a little extra income.

Palmer won unanimous council approval for a city planning commission study of the issue and a nine-month moratorium on some rental licenses. New Orleans homeowners can still rent part of the house they live in to vacationers, but there are no new or renewed licenses for rentals of whole homes not occupied by the owner.

Shortly after the council approved, Airbnb removed a registration system from its website allowing short-term rental hosts to apply for a city license, saying it’s not workable under the new changes. A HomeAway spokesman expressed worries that the city was moving toward banning or severely limiting whole-home rentals.

More recently, HomeAway released proposals for changes aimed at “compromise and collaboration.” And Airbnb spokeswoman Laura Rillos issued a statement in mid-August saying her company is open to working with the city on issues including enforcement tools and neighborhood impacts.

Battles over short-term rental regulations have been playing out at the municipal and state levels nationwide. A recent New York law requires Airbnb to reveal host’s names and addresses so the city can fight illegal listings. The short-term rental site is currently suing over the law. Massachusetts legislators have been debating lodging taxes for short-term rentals. And voters in South Portland, Maine, could soon be voting on proposed rental restrictions.

Opinions on short-term rentals are as diverse as New Orleans itself.

Sitting at a kitchen table in one of his vacation rental houses, Alex Ramirez, the son of Central American immigrants, recounted buying his two-unit house in a low-income neighborhood, living in one side and renting the other out. As he invested in more real estate, he said, short-term rental revenue enabled him to purchase and renovate abandoned properties. He now owns eight short-term rentals and manages several others.

“Every one of the properties that I own, whether it’s on the short-term rental market or the long-term rental market, I’ve brought back to commerce,” said Ramirez.

Eric Bay, who manages vacation rentals, said they bolster tourism, create jobs and provide affordable lodging for families learning the history and culture of the 300-year-old city.

But some hospitality industry workers see a threat.

“At the end of my lease my landlord asked us to leave,” casino worker and union member Dylan Seitel told the planning commission recently. He said his onetime home became a short-term rental.

Susan Beck, an artist and waitress living in half of a two-unit house, sees both sides: The owners of her unit give her a break on the rent for cleaning the other unit — a short-term rental. But noise from a two-story vacation rental across the street can be a nuisance.

“It’s just an odd feeling when I get up in the morning and I come out my front door and there’s a different group of six guys on the balcony every morning,” she adds.

HomeAway’s suggested regulation revamps include allowing property owners to rent out only two properties that they don’t live in; limiting the number of licenses per block face; and an exemption to limits in so-called blighted areas to encourage development.

“Everything’s on the table,” insisted Palmer, the council member. She said in an interview that regulations may ultimately require large-scale owners of affordable rentals in commercial areas to provide long-term affordable housing.

She stressed that new regulations must address the density of vacation rentals that critics say have commercialized neighborhoods.

“When you live in a neighborhood, you have a quality of life, where you care about the trash, you look out for your neighbors,” she said. “All that’s being eroded, that whole sense of community.”

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