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New Orleans Short Term Rental Changes

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by James Howell
March 28, 2019

Changes In New Orleans Short Term Rentals

New Orleans City Council proposing what could be good news for home buyers hoping to find their dream home in one of New Orleans iconic neighborhoods. Short-term rentals (STR) are once again being considered and some investors may find themselves having to sell their properties to comply with the new rules.

On the table is a plan that was first proposed in 2018 by Councilwoman Kristen Gisleson Palmer to significantly limit short-term rental properties in most neighborhoods. The discussion is likely to take several months as there are strong opinions on both sides.

The Current State Of STRs

According to the New Orleans Advocate, ‘owners who want to rent space on short-term rental sites like Airbnb must first get a license through the city. Those owners are also not allowed to rent the space for more than 90 days each year and cannot have more than two people in each room or 10 people total.’

Since last April, New Orleans has licensed 4,500 short-term rentals. A majority are entire homes rented part of the year. The plan, if approved, would limit residential STRs only to properties where the owner lives on-site. An example would be buildings with multiple units, like a double shotgun.

In buildings with more than two units, a limit of three units could be listed as STRs. A different set of regulations are being considered for mixed-use and commercially zoned properties, such as apartments complexes.

Neighborhoods Want Changes In STR Regulations

Councilwoman Palmer is not alone in her concerns. Council members Helena Moreno, Jay H. Banks, and Joe Giarrusso have signed onto the proposal as co-sponsors.

Giarrusso met with members of the Faubourg St. John Neighborhood Association on Tuesday about the proposal, telling them it was the beginning of the process but changes were coming. “By and large, the neighbors and neighborhoods have routinely said that they want limits and limitations,” Giarrusso told the members.

The idea is not to push out STRs. With a whopping 17 million visitors coming to New Orleans in 2017, City Council members, business leaders, and homeowners alike all understand that there are long-term benefits in STRs for everyone involved and it is important to formulate a plan that will be the best solution for everyone.

New Incentives For Affordable Housing

The council is also considering a proposal to create a new zoning map which would allow looser short-term rental rules in certain neighborhoods like the Central Business District and the French Quarter.

Plans are already underway In the CBD where several buildings are being renovated along Canal Street with the primary purpose of providing STRs to accommodate the tourism industry.

At the same time, the City Council is working with the Planning Commission to develop incentives that would encourage developers to build more affordable housing around the city.

Study Shows Major Increase In STRs

Over the last 2 years, several Mid-City nonprofits and neighborhood organizations have addressed the STR regulations through public forums and studies in the neighborhoods.

One of those studies, “Short Term Rentals, Long Term Impacts,” that was completed by the Jane Plan Neighborhood Sustainability Initiative, a local nonprofit, revealed that Mid-City had 234 whole-home rentals in 2018.

The same study showed that over a similar time-frame, Bayou St. John saw whole-home STRs increase by 79 percent, and the Fairgrounds neighborhood had a 38 percent increase.

The Mid-City Neighborhood Organization has actively participated in short-term rental discussions since 2015 and has aggressively pressed for a more transparent STR permit system that would require stricter regulations for STR platforms such as Airbnb, VRBO and HomeAway.

Fighting To Preserve A Way Of Life

Clancy Dubois of WWLtv, in his ongoing ‘Clancy’s Commentary’ made note of the deeper issue facing New Orleans neighborhoods.

“There’s a lot of money in short-term rentals, or STRs. That’s why it attracts so many speculators. It’s also why Airbnb is pushing back against the New Orleans City Council’s efforts to rein in STRs, which have overtaken some of the city’s most historic, and most vulnerable, neighborhoods.

“Airbnb stopped sharing rental and licensing information with the city. That makes it much harder for the city to regulate STRs. Airbnb is playing hardball. The city should do likewise. This fight is about more than regulation. It’s a fight to preserve our city’s neighborhoods.”

Future Outcomes For Homebuyers

So, what does this mean for home buyers in the near future? If the proposal passes, it could mean a flood of available single-family and double shotgun homes could hit the market.

Consider that in one instance, an STR owner reported in the above neighborhood owns 14 single family homes that are used as short-term rental properties. If the new proposal goes through and he is only able to keep one of them, 13 homes would go up for sale.

The math may not work out quite that way; however, one thing is for sure, long-term residential homeowners want their neighborhoods to return to what they are supposed to be: Places where families and neighbors can grow old together. For more information about New Orleans real estate, contact your local Realtor.

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