New Orleans is starting to crack down on property owners who have been flouting the city's new rules on short-term rentals, with 10 owners in the French Quarter facing administrative hearings next week.
It's the first time in almost two years that the city has tried to penalize people renting their homes to tourists. And with more than 500 properties under scrutiny by city officials, many more hearings could follow the initial wave of enforcement.
The first hearings, scheduled for June 21, suggest the city is moving past the relatively conciliatory approach it has taken since the new short-term rental regulations went into effect April 1.
Since then, enforcement officials have largely been focused on encouraging owners to get into compliance by registering for a license and paying the required fees.
To date, permits have been issued for about 2,170 properties.
“At this point, if you’re still advertising your short-term rental without a license, it’s a violation,” Director of Safety and Permits Jared Munster said Monday. “We pushed the cutoff as far back as we reasonably could. At this point, it’s time to either comply or stop” advertising.
It’s little surprise that the first properties to face a formal hearing are all in areas of the French Quarter where short-term rentals are entirely banned.
“We started in the French Quarter because that’s the place where it’s easiest to identify that you can’t do this,” Munster said.
Of those 10 properties, two owners have mailing addresses in California, one in Fort Worth, Texas, and four in Louisiana outside New Orleans.
Some of the properties continue to be listed on short-term rental websites, said Jennifer Cecil, director of the city’s One Stop permitting center.
At hearings before a city adjudication officer, city inspectors will make the case that each of the properties violated six different provisions of the city’s rules related to operating without a permit, advertising without a license number, failing to post permit information on the building and operating a short-term rental illegally in the French Quarter.
The property owner or a representative will then have a chance to offer a defense.
Typically, the hearing officer makes a decision at the hearing. It can then be appealed to Civil District Court.
Beyond the first group, officials are working to put together another 20 cases to bring to hearings the following week, Cecil said. Those cases are expected to cover a wider area of the city, she said.
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Although short-term rentals were illegal throughout New Orleans before the new regulations were passed last year, the law was almost never enforced.
The last time city officials sought citations against short-term rental operators was in 2015, when cases were brought against nine property owners.
Those cases resulted in a lawsuit and were dropped by the city, which cited the difficulty of meeting the high burden of evidence involved in proving a violation under the laws in effect at the time.
Officials are more confident of their success this time around, in part because of the way the new regulations are structured. The city will need to show only that the properties were advertising for short-term rentals without a license, without having to show that a rental actually occurred.
The maximum fine for each violation is $500 a day. Munster said that at first, the city will be pursuing charges based only on a single day, not continuing violations.
Based on past experience, he said he expects the initial violations to result in fines of between $150 and $200 each, with the hearing officer ramping up the penalties if more violations are found at the same properties or by the same owner in the future.
The ultimate goal, Cecil said, is to get violators into compliance.
“Ideally, we don’t cite forever,” she said. “We get the message out to the public that we’re serious about following up and enforcing, and people decide it’s not worth the risk and comply.”