Residents throughout New Orleans would be able to set up various types of legal short-term rentals on their properties under the recommendations of a study released Tuesday night by the staff of the City Planning Commission.
Under the proposals, residents in any area of the city would be allowed to rent out rooms if they have parking available, and higher licensing fees would be charged to pay for enforcing the rules. The city would step up what until now has been very lax enforcement of its rules.
The study is the city’s first concrete proposal for dealing with an issue that often has come up in debates over housing affordability, gentrification and tourism as websites such as AirBnB, Homeaway and VRBO that allow residents to list their properties for rent have made inroads into the market.
City Councilwoman Stacy Head, who had sought to hammer out a compromise on the issue, last year asked the City Planning Commission to prepare some recommendations on the matter, saying that a year of talks had led only to “irrational behavior, vitriol and outright lies.”
City law now bans owners from renting out properties for less than 30 days at a time, or 60 days at a time in the French Quarter, but those rules are rarely enforced.
Analyses of the short-term rental market in New Orleans that the CPC study relied on suggest there are between 2,400 and 4,000 short-term rentals operating in the city, about 70 percent of which rent out a full residential unit, but only 231 violations were reported over the past three years.
Proponents argue that short-term rentals provide a way for property owners to help cover the cost of buying or maintaining their homes while bringing more tourists — and tourist dollars — to the city. Opponents say the practice contributes to the high cost of buying or renting a home in New Orleans because it can be more profitable to charge high prices to short-term tourists. They also say a lack of long-term residents can destabilize neighborhoods.
The study suggests four types of short-term rentals that would be simultaneously permitted in the city:
— Accessory short-term rentals would be permitted in any residential property, but the owner or operator would be required to be present. Residents would be allowed to rent up to two bedrooms or 25 percent of the unit they live in or else the unoccupied half of a double if they own the property and live in the other side. Residents renting out only bedrooms would be limited to three guests at a time; half-double rentals would be limited to renting out three bedrooms to a maximum of six guests. One off-street parking space would be required for every two rooms, which could significantly reduce the number of properties that would qualify for this type of rental.
— Temporary short-term rentals would allow a permanent resident to rent a full unit of up to five bedrooms to up to 10 guests. Those offering temporary short-term rentals would be able to get up to four temporary use permits covering a total of up to 30 days per year. There would be no parking requirement.
— Principal short-term rentals would allow property owners to rent an entire unit of up to five bedrooms to up to 10 guests as often as they like, but only after getting a conditional-use permit from the city. The permit process costs about $1,160 and typically takes between four and six months. The permit would have to be renewed every three years. Depending on the zoning of the area, a maximum of between two and four principal short-term rentals and traditional bed-and-breakfasts would be allowed on a square block. If off-street parking is required by zoning, one space would be required for every two bedrooms.
— Commercial short-term rentals would allow property owners to rent a unit of up to eight bedrooms to up to 16 guests in districts zoned for commercial or mixed commercial and residential use. In areas where parking is required, one space would be needed for every two bedrooms.
Requirements for traditional bed-and-breakfasts would be altered to bring them into line with these rules.
Residents would have to obtain liability insurance for any rental properties and notify neighbors that they were operating as a short-term rental. Allowing guests above the occupancy limit or outdoor activity at night would be prohibited.
The various websites that allow residents to advertise their units as short-term rentals would be required to collect taxes or require their users to pay them. They would be directed to remove or modify listings that are in violation of the rules.
The regulations lack a key element sought by some opponents of short-term rentals: a requirement that the websites share information with the city about local properties that are using their services. It is often difficult to track down short-term rentals, and opponents have argued that without such a disclosure requirement, the licensing and regulations would essentially be voluntary.
The study also calls for stepping up enforcement of the regulations by hiring three or four city employees to focus specifically on short-term rentals, at a total cost of $175,000 to $300,000 a year.
Because bed-and-breakfasts with fewer than five bedrooms are now exempt from paying room taxes, and those with more rooms pay the city only 50 cents per room per night, the study also suggest the city lobby the Legislature to allow higher taxes on those properties.
The cost of the licenses recommended by the study would range from $50 a year for an accessory short-term rental to $500 for a principal or commercial rental.
The recommendations also call for raising the maximum fine for violations of the rules above the current $500 and creating a website that lists licensed short-term rentals in the city and provides a way to report violations.
Follow Jeff Adelson on Twitter, @jadelson.