In their first in-depth discussion of regulations that would legalize short-term rentals in New Orleans, City Council members Wednesday considered how proposed rules would be enforced and whether proposed penalties are high enough to deter scofflaws.
Members of the council’s Community Development Committee, particularly Councilman Jared Brossett and Councilwoman Susan Guidry, also appeared skeptical of the idea of authorizing the renting out of entire homes, given the impact it might have on neighborhoods and housing affordability.
The committee’s hearing was just one step in what could be a lengthy process of hashing out rules for people renting out rooms or entire homes through sites like Airbnb. As expected, the council members at the meeting did not take any action. Instead, the meeting focused mainly on questions about a plan endorsed by the City Planning Commission earlier this year.
“We will continue to have meetings on the matter until the issue is resolved,” Councilwoman LaToya Cantrell said. “This is a priority for the City Council, and I think we’ve heard heavily this is a priority for the public.”
But the debate is unlikely to be settled soon. Some officials suggested Wednesday that even after years of discussion, a final vote could be months away.
Short-term rentals, defined in most areas of the city as those for less than 30 days, are illegal in New Orleans, though that law is rarely enforced. An analysis of the sites advertising rentals suggests that several thousand properties in the city are being offered for short-term rentals, mostly whole homes in residential neighborhoods.
Coming up with a set of regulations that won’t continue to be ignored and an enforcement plan strict enough to force people into compliance was the main focus of council members.
The Planning Commission staff recommended authorizing four categories of short-term rentals with various levels of fees and regulations: the rental of part of a home or half of a double house where the person offering the rental would still live on the property; allowing entire homes to be rented out for only a limited time each year; rental of entire homes in commercial or multi-use districts; and the rental of whole homes in entirely residential neighborhoods under rules restricting how many such houses could be rented in a given area.
The City Planning Commission endorsed all those ideas except the last, recommending against allowing any homes to be permanently turned into short-term rentals in residential districts.
Most of the complaints about short-term rentals come from those arguing they destroy the fabric of neighborhoods and encourage owners to opt for short-term tourists instead of long-term renters, driving up the cost of housing.
“Each home turned into a short-term rental removes a home for residents to live in as full-time residents,” said Carol Gniady, executive director of French Quarter Citizens, who said landlords can make as much as four times more on Airbnb rentals as from a traditional rental. “Renting out entire houses is no longer a matter of someone just making a little money to pay bills.”
But ensuring that such rentals become legal is a major goal of the Alliance for Neighborhood Prosperity, a group representing short-term rental owners. Whole residential properties “make up the lion’s share of our membership,” said attorney Bob Ellis, who represents the group.
Regulatory efforts in other cities have failed because they excluded some types of properties, Ellis said, apparently suggesting rentals of entire homes in residential neighborhoods would continue even if they are banned.
Jim Uschold, another attorney representing the alliance, focused on the effect the ban would have on the city’s pocketbook. A law passed in the special legislative session this year extends the hotel and motel tax to short-term rentals, something that is estimated to bring in about $1 million a year for New Orleans. But, Uschold said, whole-home rentals make up a sizable chunk of the money that would be brought in.
“If we ban the non-owner-occupied units, you’re going to eliminate half or a third of your revenue stream,” Uschold said.
Brossett, however, questioned the effect that allowing the rental of large numbers of entire houses would have on neighborhoods, not just because of the impact of so many tourists but because they could drive up housing prices and tax assessments.
“If there are four on each block, on the same street, that definitely opens the way to change the integrity of the neighborhood,” Brossett said.
So far, Mayor Mitch Landrieu’s administration has not said what policies it would support, though his office was involved in drafting the initial recommendations.
Landrieu’s office released a statement Wednesday saying it was working with the New Orleans legislative delegation on measures that would increase the revenue the city receives from short-term rentals and that the Planning Commission study “struck a good balance.”
However, when asked specifically about rentals in residential areas, a Landrieu spokesman said the office will have more details “in the coming weeks and months.”
Follow Jeff Adelson on Twitter, @jadelson.