The New Orleans City Council gave final approval Thursday to rules regulating short-term rentals in the city, after shooting down last-minute efforts to make the regulations more restrictive.
The final rules are similar to those given preliminary approval by the council in October. Mayor Mitch Landrieu's administration negotiated those rules with Airbnb, the largest player in the market, in an attempt to get the company's voluntary cooperation with the city on data sharing and tax collection.
The council voted 5-2 in favor of the regulations. Councilman Jared Brossett, who proposed several measures that would have tightened the rules, and Councilwoman Susan Guidry, who also has called for greater restrictions, voted no.
The council also passed a package of ordinances laying out how the city will enforce the rules and penalize violators, and it authorized Landrieu to sign an agreement with Airbnb to collect hotel taxes and a fee from visitors using the site. Those measures passed unanimously.
Council members who supported the rules — along with officials from the Landrieu administration and Airbnb — cast the package of regulations as a model for regulating the roughly 5,000 properties in New Orleans now listed on short-term rental sites, despite a longstanding citywide ban on the practice. And, pointing to data the city would require from Airbnb and similar platforms, they argued the new rules would provide a foundation that can be made more or less restrictive if problems develop.
“I would encourage both sides to know that anyone who votes yes on this agreement is not throwing a thumbs-up to short-term rentals; they are not capitulating to some global market,” Councilman Jason Williams said. Instead, he said, the rules would rein in the current proliferation of short-term rentals in a way that can be changed at a later date.
Short-term rentals to tourists would be legalized in most areas of New Orleans, with some li…
But Guidry, who has argued that those listing short-term rentals should be required to hold a homestead exemption proving they live at the site, said the city was “giving up too much” to the rental websites, something she said would harm neighborhoods and would mean “residents won’t know who’s staying down the street from them and their families for more than a quarter of the year.”
“I truly believe we can give (the companies) a message and push them harder, and they will come to recognize that they can still make a lot of money sitting wherever they’re sitting at their computers having this all come to them with more restrictions on them,” Guidry said.
The short-term rental debate has been going on for years in New Orleans as the practice spread from the French Quarter and other tourist-heavy neighborhoods to properties all around the city.
Those listing their property on the sites argue that the money they've earned from renting to tourists has led to the rehabilitation of blighted properties and helped homeowners make ends meet. It's also less difficult for landlords than renting to long-term tenants, they say.
Opponents, including many neighborhood groups, the hospitality industry and some affordable-housing advocates, have argued short-term rentals — particularly of entire homes — have cut down on the supply of units for residents, driven up prices and left neighborhoods hollowed out of permanent residents.
Under the rules passed Thursday, several types of rentals will be allowed in the city. Residents with a homestead exemption will be able to rent out individual rooms or half-doubles as often as they want. Owners of apartments or condos in mixed-use or commercially zoned areas will be able to rent out their entire units year-round. And those who own residentially zoned properties will be able to rent out entire units for up to 90 days a year as so-called “temporary” rentals.
None of those types of rentals will be allowed in the French Quarter — where there’s a decades-old ban on new hotels — except for a six-block stretch of Bourbon Street.
There will be no cap on the total number of short-term rentals in the city or in individual neighborhoods, something Councilman James Gray had wanted. “I guess we didn’t get that in the compromise,” he said.
Brossett failed to win passage of an amendment aimed mainly at the "temporary" rental of entire residential properties, which have become the most controversial aspect in the final version of the ordinance. Critics have expressed concern that the restrictions are loose enough that they will allow investors to buy up multiple properties that would be profitable even if they are rented only the allowed 90 days a year.
Brossett's amendment, which lost 5-2, would have limited those rentals to 60 days or five separate rentals a year, required a homestead exemption to get a permit for them and limited any type of residential short-term rental to one property per block.
“I tried to propose reasonable restrictions on both the short-term rental zoning and enforcement ordinance,” Brossett said. “I strongly believe in the need to protect our neighborhoods.”
Another set of amendments Brossett proposed would have held companies like Airbnb liable for violations by those who use their site. That failed 4-3, with Brossett, Guidry and Councilwoman LaToya Cantrell voting for it.
City officials have said it’s virtually impossible to enforce the existing ban on short-term rentals because of the difficulty in tracking down all the properties available in the city and the high bar of evidence required under existing ordinances.
The enforcement mechanisms passed Thursday are aimed at addressing those concerns. Websites like Airbnb will be required to provide monthly data to the city on their users, including how often their properties are rented.
Also, the city will be able to levy fines on local property owners who don't follow the rules. Eventually, the city also will be able to use property liens and even cut off electricity to punish violators.
Deputy Mayor Ryan Berni warned that without cooperation from Airbnb and other sites, the city could find itself unable to enforce any new rules or else be stuck in years of legal battles with the platforms.
Airbnb and other short-term rental websites would be legally required to share data with New…
The city has said owners renting out their properties will be required to get permits and be in compliance with the rules by April 1. It is counting on the websites to provide the city with information about those using the sites to assist in the process. Airbnb, the largest platform, will begin collecting hotel taxes and a $1 per night fee that will go toward an affordable housing fund starting in January.
It’s not clear how much those taxes and fees will bring in, though city officials are banking on at least $927,000 in hotel taxes in the first year, which will be directed back into enforcement. That enforcement will include monitoring sites, whether they have an agreement with the city or not, to check that their users are in compliance.
One amendment that did pass, sponsored by Williams, would increase the permit fee for temporary short-term rentals from $50 to $150 a year for owners who lack a homestead exemption, something he said will help offset the increased costs and impact those rentals would have on the city.
“Airbnb and our host community are ready to do our part and honor our commitment to ensure this legislation achieves its goal of growing the local economy while protecting neighborhoods,” Airbnb spokeswoman Laura Spanjian said in an emailed statement after the vote.
Fewer advocates for either side of the debate showed up at Thursday’s meeting than at previous hearings, when the council chambers were at standing-room-only capacity.
The short-term rental owners who did attend and speak were, in large part, property owners in the French Quarter lobbying for rentals of their properties to be legalized as well.
Opponents focused on a range of issues — the need for affordable housing, evictions of long-term tenants in favor of short-term rentals and the loss of neighborhoods' identity — as they called for stricter rules, though none asked for an outright ban.
Council members argued that the rules on the table were the only way to reduce the spread of short-term rentals.
“Right now it’s proliferating, and we have zero control,” Williams said.