Up to 8 percent of the homes in New Orleans would be eligible to be converted into whole-house short-term rentals, in addition to an unknown number of half-doubles and condos, under proposed rules being considered by the City Planning Commission.
If every house that under the rules could be rented to tourists in fact became a whole-home rental, there would be about 15,000 of them throughout the city under the density caps included in the proposed rules, according to an analysis by The New Orleans Advocate. That’s out of about 190,000 total housing units counted in the 2010 census.
Hitting that cap is unlikely, though, given that it would require the practice to spread to areas that do not typically attract tourists, such as New Orleans East.
Mayor Mitch Landrieu’s administration did not question The Advocate’s figures, but a spokesman called the analysis “unrealistic” and “unnecessarily inflammatory,” arguing that the market could not support that many short-term rentals and that city officials would tamp down on excessive numbers through the zoning process.
Leaders of a group of short-term rental owners said they would support looser restrictions that would allow more units in areas near the Mississippi River.
At present, short-term rentals are illegal throughout New Orleans, but the law is rarely if ever enforced, and about 3,120 whole-home or whole-apartment rentals — about 2 percent of the city’s total housing stock — are now listed on Airbnb, according to insideairbnb.com, a site that tracks listings and is critical of the impact short-term rentals have on cities around the world. Whole homes make up nearly three-quarters of the listings on the site.
Renting whole homes through sites like Airbnb and HomeAway has become the central focus of the ongoing debate over short-term rentals in New Orleans.
Opponents — including some neighborhood groups, the hotel industry and affordable housing advocates — have called on the city to keep rentals of entire homes illegal, arguing that they cut into the housing supply for residents and can disrupt neighborhoods by driving out stable, long-term homeowners or tenants.
Proponents say being able to rent a house to tourists — often for more money and less aggravation than dealing with a long-term tenant — encourages the redevelopment of blighted properties and can provide needed income for owners.
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The city’s planning staff has recommended legalizing whole-home rentals in two reports it has given to the City Planning Commission, whose members have been more skeptical of the practice.
The rules now being debated seek to ensure that whole-home rentals do not overwhelm entire neighborhoods by limiting them to just a few per residential block.
Cap depends on zoning
The number to be allowed is capped based on the zoning of the neighborhood: Four would be allowed in residential blocks in the historic core neighborhoods of the French Quarter, Marigny, Treme and Bywater; three per block in the “historic urban” residential areas that dominate south of Interstate 610; and two per block in the more suburban areas near Lake Pontchartrain, in New Orleans East and in much of Algiers.
There would be no per-block limit in areas not zoned residential, such as the Central Business District.
The Advocate’s analysis calculated the total number possible based on the number of residential blocks in each of the zoning categories.
About 7,000 of the possible short-term rentals would be allowed in neighborhoods where there’s already been a proliferation of such rentals, primarily those along or near the river. As with the citywide numbers, that would represent about 8 percent of the housing units in those areas, according to Census Bureau statistics.
Deputy Mayor of External Affairs Ryan Berni responded to the analysis by calling it “unfounded” and “distorted,” but he did not say the numbers themselves are inaccurate. Instead, he said in a statement that “taking the maximum possible number of principal residential short-term rentals is unrealistic and unnecessarily inflammatory at this stage in the public process.”
If the proposed regulations are approved, “only a small percentage (of owners) would choose to seek a conditional-use permit to operate as a short-term rental, and even less would be approved,” Berni said. He did not respond when asked what would prevent such approvals, though it could come through the zoning process.
While other types of short-term rentals — of rooms in occupied houses or of the vacant half of double houses — would be allowed to operate after simply getting a permit, whole-home rentals would have to go through a formal zoning process to get a conditional-use permit. That would require a review by the City Planning Commission and approval by the City Council. If approved, the permit would have to be renewed after three years.
A 20-year process?
City officials have suggested that the conditional-use process would serve as a check on the spread of whole-home rentals, both because of the time-consuming nature of the process and because of political considerations that might lead the council to reject many such applications.
The Landrieu administration has estimated that only about 150 applications could be processed each year.
At that rate, it would take 20 years just to process the whole-home rentals that already are available in the city.
It seems unlikely that the city would in fact engage in a two-decade process to issue permits for all those rentals — or that owners would agree to stop renting their properties for years while they seek permits.
Landrieu administration officials have not responded to repeated requests to discuss how they envision such a process would play out, including whether existing rentals would be permitted to keep operating while they wait for approval and how the city would choose which rentals to permit if there were more applications on a particular block than allowed by the regulations.
Other types of short-term rentals, including halves of doubles whose owners live on the other side and condos in areas not zoned residential — which includes the entire CBD — would be permitted to operate without having to go through the approval process and would not be capped at a certain number per block.
The limits imposed by the proposed density cap are expected to be a source of significant debate.
Karen Fernandez, who is analyzing the proposed restrictions for the Garden District Association, noted that the per-block limits do not take into account how many houses actually exist on each block. That could mean areas of the city where lots are larger would have more of their housing stock used for short-term rentals.
“The intent of limiting the number per square is a good one, but not every square is identical,” Fernandez said.
More or less restrictive?
The Garden District Association and residential groups in the French Quarter have called for short-term rentals to be prohibited in those areas, in keeping with restrictions already in place on new hotels or bed-and-breakfasts in those areas.
At the same time, the Alliance for Neighborhood Prosperity, a group of short-term rental owners, has argued that while the proposed regulations are “a good starting point,” they are too restrictive.
Eric Bay, the group’s president, said density regulations should be based on a wider area, in recognition that some blocks in a given neighborhood might have more than the limit while others would have none.
The alliance has calculated that the proposed rules would require shutting down roughly 1,200 current rental listings because they are over the density caps, Bay said.
Bay said he might be prepared to support a citywide limit of 5 percent of the housing stock for whole-home short-term rentals but that a cap of 10 or 15 percent might be better if it provides an incentive for people to fix up blighted properties for use as short-term rentals.
Restrictive policies, Bay said, simply will encourage people to ignore the regulations and to continue renting illegally.
“That’s what we don’t want to do: create an underground market,” he said, adding that his group wants to work with neighborhoods on specifics. “Let’s be fair and nonrestrictive about it and allow some input.”