Short-term rentals of entire homes in residential areas should remain illegal in New Orleans, the City Planning Commission said Tuesday.
For the second time, the commission voted to urge the City Council not to allow whole-home rentals, even as other types of rentals to tourists would be legalized and regulated throughout the city.
The recommendation to disapprove the whole-home rentals came from a unanimous commission after almost six hours of debate and public comment in a City Council chamber packed with short-term rental owners in white and opponents in red.
Commissioner Nolan Marshall III said he was deeply troubled by the idea of approving any plan that would "disrupt" the city's housing market just a decade after Hurricane Katrina.
"I don't know what else to call it but profiteering when they talk about these houses where people probably used to live 10 years ago," Marshall said. "They're bragging about taking profits from an illegal business model."
Marshall gave the most detailed explanation of his views of the members of the commission. He argued that short-term rentals not only cause problems in neighborhoods and remove housing stock that has been available to residents but also drive up prices and taxes for all nearby properties, further exacerbating the problem.
Under the version of the proposed rules for short-term rentals approved by the Planning Commission, rental of whole homes in residential neighborhoods would be banned but unlimited short-term rentals would be allowed in areas that are not zoned residential but have housing units such as condos or multifamily complexes. Those include essentially all of the Central Business District and much of the French Quarter.
The recommendations now go to the City Council, which is not bound to follow the Planning Commission's advice.
Some council members have raised concerns about whole-home rentals, though few have committed to a firm position on the issue, leaving it unclear how the final rules will shake out.
Renting out a home for less than 30 days -- or 60 days in the French Quarter -- is illegal at present in New Orleans, but essentially non-existent enforcement has led to thousands of listings on sites like Airbnb and HomeAway, mainly in historic neighborhoods close to the Mississippi River.
The short-term rental debate has been going on for years but gained steam earlier this year when the City Council called on the Planning Commission to study the issue and make recommendations.
That process yielded a study suggesting four types of short-term rentals: single rooms or half-doubles; "temporary" rentals of homes for less than 30 days a year; whole condos or other properties in areas that are not zoned residential; and whole-home rentals in single-family neighborhoods, with limits on the number allowed per block.
It's that last category that has become the center of the debate. Whole-home rentals are both the most lucrative and the most prolific category in the city. Of the estimated 4,300 listings on Airbnb in New Orleans, about 72 percent are for entire homes.
During debate on the study done by the planning staff a few months ago, the members of the Planning Commission voted to ban whole-home rentals. But when the City Council sent the issue back to the commission to draft the ordinance that will actually govern the rentals, it asked that whole-home rentals be included at the urging of Mayor Mitch Landrieu's administration.
The opponents of whole-home rentals include a mix of neighborhood associations, affordable-housing advocates and a large cross-section of the city's hospitality industry, including workers, hotels and organizations like the Convention and Visitors Bureau.
The primary concern voiced by most Tuesday was that whole-home rentals drive up housing prices and encourage landlords to evict long-term tenants in order to cash in by renting to tourists. That has the effect of depopulating neighborhoods and increasing the financial burden on remaining city residents.
"This isn't just about who we're inviting into the city, but who we're pushing out," said Breonne DeDecker, of the Jane Place Neighborhood Sustainability Initiative.
The meeting showed a subtle evolution in the arguments being advanced by both sides.
The Alliance for Neighborhood Prosperity, which represents short-term rental owners, had previously called for few fewer restrictions than those included in the planning staff's original report and had floated the idea of allowing even higher densities of whole-home rentals than suggested by the staff. That argument was largely abandoned Tuesday as the group focused its attention on ensuring that whole-home rentals are allowed at all.
Many of the speakers with the alliance also admitted owning and renting out an entire home -- or in many cases several. In previous meetings, the group had largely been represented by homeowners who said they rented out a room or two to help pay their own housing costs, a more sympathetic situation but one that left few owners advocating for whole-house rentals.
"The way I look at it, (such owners) are breathing life into these neighborhoods that would normally be sleeping," said David Stewart, who said he owns two whole-home rentals.
But while proponents said they were proud to share the city with outsiders, many critics said short-term rentals are forcing out those most responsible for creating New Orleans' culture.
"Mardi Gras Indians don't need more tourists taking pictures of them," said Ethan Ellestad, with the Music and Cultural Coalition of New Orleans. "They need an affordable place to live."
Many of the short-term rental owners said their properties would not otherwise be rented because they haven't been able to find long-term tenants, because the properties are too large or expensive -- or too small and uncomfortable -- for long-term renters or because they had bad experiences with previous tenants.
"They're not affordable housing and have never been part of the regular housing stock," said Christian Galvan, who said he owns several luxury properties he rented to film crews before turning to more general short-term rentals.
One opponent, who said she had been evicted in favor of a short-term rental, said those who claim they couldn't find tenants must be looking for too much in rent, given the housing crisis in the city.
Proponents of short-term rentals also argued that allowing whole-home rentals is necessary to fund enforcement of the rules for all properties.
"The numbers don't make sense if you don't include whole-home rentals. You need those tax dollars and the revenue the city can gain for effective enforcement," one said. "If you remove whole-home rentals, you're going to have a law that we can't enforce because there's no money to get the enforcement agents out there."
But the argument that what is now illegal activity should be authorized so that the city would have the resources to enforce new rules rubbed several commissioners the wrong way.
"You told us to take lemons and make lemonade, but you all are the ones that gave us the lemons," said Marshall, who also asked why owners of current short-term rentals would follow new rules when they have flaunted the old ones.
Commissioner Royce Duplessis, who voted to keep whole-home rentals in the regulations during the commission's first vote earlier this year, said his stance was based on concern that those renting out homes would continue to be scofflaws.
"Whole-home rentals have already been illegal, but still there's been a proliferation of whole-home rentals," Duplessis said. "I have no reason whatsoever to believe that anything will be different based on us saying they're still illegal. That's the most discomforting thing for me."
"Why not consider residential demand in residential neighborhoods?" Marshall said. "Was residential demand in those neighborhoods considered? Because those same neighborhoods are the ones that middle-income people, working people, want to live in because they're close to public transportation. So for all of us in the city, those are in-demand neighborhoods."