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Visitors unload suitcases at a short-term rental in Faubourg Marigny. The New Orleans City Council is working on stricter rules for such rentals.

The New Orleans City Council’s unanimous vote May 16 to tighten the rules on short-term rentals (STRs) in most parts of the city came as no surprise. As candidates in 2017, all seven council members promised to link STR licenses to homestead exemptions.

They kept that promise this week, after months of study by the City Planning Commission, which recommended significant changes to the city’s existing STR rules. The existing rules were adopted in 2017 by the previous council.

Critics of STRs say the current ordinance — which remains in effect — threatens some of the city’s most historic, and vulnerable, neighborhoods. They say out-of-town investors have bought numerous homes, converted them into “whole home” STRs and pushed out longtime residents. STR backers say the current law creates jobs and helps many residents afford their homes by allowing them to rent out rooms or adjoining apartments to tourists.

The fight over STRs has been bitter, and it is far from over. The council’s action this week did not change the law, but it does portend big changes. Here’s where things stand now:

• Some STR supporters have sued the city over the council’s decision last year to stop issuing new and renewed licenses for “whole home” STRs in residential neighborhoods. That case is pending.

• The council’s action this week focused on STRs in residential neighborhoods. Council members are waiting for the results of a study to decide how best to regulate STRs in the Central Business District, Warehouse District and other highly commercialized areas. The rules in those areas are expected to include requirements (and incentives) for privately financed affordable housing units.

• In residential neighborhoods, STR owners will have to live in and have homestead exemptions on their rental properties. Large STRs (triplexes and four-plexes) will be limited to one on each side of the street and no more than 12 guests per night.

• STRs will remain illegal in most of the French Quarter (they’re legal now on several blocks of Bourbon Street) and all of the Garden District.

• In several mixed-use zoning districts, STRs may be allowed as conditional uses, which require council approval on a case-by-case basis.

The new rules are months from becoming final. After getting the results of the commercial STR study, the council must adopt rules for commercial areas and then send all proposed regulations to the City Attorney’s office, which will put them into draft ordinance form. The council then must formally adopt the new ordinance.

After that, the council must set fees for the various STR licenses, devise an enforcement mechanism — and fund it.

All the while, the lawsuit filed by STR operators remains in play. The stakes are high, and neither side appears willing to back down.

“New Orleans needs to make short-term rentals work for New Orleanians,” says District C Councilwoman Kristin Gisleson Palmer, who led the push for tighter rules. “I don’t philosophically have an issue with STRs, but all the wonderful things that make us who we are come from our neighborhoods. We have to maintain our neighborhoods and create what we want on STRs — and not be apologetic about it.”