When Polly Hardie travels, she doesn’t look for amenities like a fitness center or swimming pool in the places she stays.
Her list of must-haves includes lots of space, a kitchen and a washer and dryer — the trappings of home.
“I have a sizable family, and for us, it’s nice to be able to stay in a home,” said Hardie, the mother of four boys under age 10. “You don’t want to be next to us in a B&B or hotel.”
Instead, her family’s vacations feature private homes made available for short-term rental.
She finds them on the website Airbnb, a major player in a rapidly growing industry comprising technology companies that connect regular people with one another for the purpose of sharing some service or commodity like a ride, a room or a bike.
Another leader in the cottage industry is the cellphone-based ride service Uber.
Both recently have begun to stir debate in New Orleans.
Proponents of outfits like Airbnb and Uber say they make it easy for people to haul in a little extra cash renting out a room in their home or giving someone a ride. Many advocates also laud the quick, efficient and affordable service provided.
On the other side of the argument are regulated, taxed and licensed professionals — think bed-and-breakfast operators and cab drivers — who say the upstarts should have to comply with the same rules they must follow.
The commotion over this industry, dubbed the “sharing economy,” presents a delicate task for local policymakers, who see their challenge as finding a balance between nurturing existing businesses and protecting the quality of life of residents on one side and, on the other, supporting new businesses and innovation — and the additional tax dollars those things bring.
“It is one of the fastest-growing areas of economic development in the world,” City Councilman Jason Williams said. “New Orleans can benefit from it if we’re thoughtful about it.”
The sharing economy, essentially a peer-to-peer business model, has mushroomed in the past few years as advances in technology have made sharing one’s home or car easier and cheaper.
In the case of Uber, getting a ride is as simple as calling up a cellphone application and picking the car closest to you. The application will even tell you how far away it is.
A newfangled world
Locally, the City Council has just begun considering how to integrate this newfangled world with the rest of the city. But the topic has come up in meetings twice in the past two months.
The council’s Transportation Committee held its first public debate last month on a proposed law that would clear the way for Uber to begin operating in New Orleans. And earlier this month, the council voted unanimously to change the definition of “transient vacation rentals” in the city code, a modest attempt at cracking down on illegal short-term rentals in the city.
Councilwoman Stacy Head called the fix a “temporary stop” until the council can come up with a more “comprehensive way to regulate, at times restrict and certainly harness the dollars” from operators of short-term rentals.
Both Head and Williams said the recent meetings are just the tip of the iceberg of what the council will have to consider over the next several months as it seeks to define and govern the new category of business.
“We have to regulate them to protect the interest of our citizens and to also collect revenue for our city,” Williams said. “I think the toughest challenge is how to regulate these businesses in a way that accomplishes those goals but does not stifle the entrepreneurial spirit or the ability to be successful.”
Williams said residents are “emailing, calling, stopping me in the street and begging for these technologies to be available here because they’ve experienced them in other cities.”
There’s also plenty of opposition.
“I’m not for it. The city doesn’t have that kind of business,” cab driver Wallace Toney said of the car service Uber as he stood outside Le Pavillon hotel waiting on a fare. “You see us sitting here. You go to New York, Chicago, that’s where that should be. They’re not sitting here.”
Toney said the Uber cars also would represent unfair competition because they wouldn’t be subject to the same standards of operations that cabs are required to follow. Last year, the council passed a package of laws that, among other things, established a maximum age of seven years for cabs operating in New Orleans. Noncompliant cab owners run the risk of losing their certificate of public necessity and convenience, the expensive and limited-quantity permit that allows them to operate on city streets.
Hundreds of owners made significant capital investments in newer vehicles and other required equipment with the expectation that entry into the for-hire marketplace would be limited.
“But they (Uber) can bring anything they want in here,” said Toney, who will have to buy a new car next year. “They don’t have any rules to go by.”
‘Level the playing field’
The opposition to short-term rentals is two-pronged. Residents who live near properties used for that purpose complained to the council recently about raucous parties and unaccountable property owners. Business owners, meanwhile, focused on fairness in competition.
“We’re all small businesses, and we understand free enterprise,” said Bonnie Rabe, innkeeper at the Grand Victorian Bed & Breakfast on St. Charles Avenue. “But the reality is not everybody should be able to start a small business in their house and not be accountable for it. We’re looking to level the playing field.”
A group of homeowners who rent their homes on a short-term basis are in the process of proposing a way to legalize and regulate short-term rentals.
Polly Hardie, who serves as the president of the Alliance for Neighborhood Prosperity, said she agrees with Rabe and wants to find a way to promote legal short-term rentals.
The alliance has commissioned the Lester E. Kabacoff School of Hotel, Restaurant and Tourism Administration at the University of New Orleans to study the economic impact of short-term rentals on the city. The school has completed a visitor study, similar to the one it performs each year for the tourism industry, and will submit the results to the alliance, professor John Williams said.
He said the report will include only data about how many people stay in short-term rentals when they come to New Orleans and how much they spend while here. The report will not offer an opinion on whether the rentals are good or bad for the city.
Hardie said the alliance will use the survey results to bolster its claims about the benefits the city would receive from embracing and regulating short-term rentals.
“Right now, the city is not benefiting whatsoever from these short-term rentals,” she said. “It is our hope that the numbers will show that there is an interesting possibility there.”
The results of the study also will inform a proposed ordinance members of the alliance are crafting to present to the City Planning Commission. It would outline how they believe short-term rentals should be regulated, Hardie said. The proposal so far would include that those rentals pay some sort of annual licensing fee and, perhaps, a separate tax to be paid per use.
“It’s about leveling the playing field,” Hardie said. “We’re absolutely amenable to that.”
While fairness may be a prime consideration as the council tries to update the city’s laws to digital times, the council has expressed other concerns as well.
Councilwoman LaToya Cantrell, who chairs the council’s Community Development Committee, said she believes the proliferation of short-term rentals is directly tied to rising rents in New Orleans.
“Rents are going through the roof,” she said. “And I do believe this has an effect on that.”
Williams, meanwhile, said he sees the short-term rentals as potentially helping to revitalize struggling neighborhoods. He said he would be supportive of an ordinance that might apply differently in different parts of the city.??“You have neighbors in Bywater, Marigny and the French Quarter who feel like Airbnb is killing the culture,” Williams said, “whereas an Airbnb in Central City could revitalize that neighborhood.”
The council shouldn’t be too restrictive in the rules it places on new operators or provide special protection for legacy operations, said Ivan Miestchovich, an associate professor of finance and director of the Institute for Economic Development and Real Estate Research at UNO.
“Government, every time it does something trying to help, it usually screws it up,” Miestchovich said. “The market works just fine by itself if it’s left to work by itself.”