Disparate groups across the short-term rental (STR) debate — from operators to residents displaced by tourist housing to housing advocacy groups and tourism officials — are urging city officials to require people who put their homes on platforms like Airbnb to also live at the property.
The New Orleans City Planning Commission (CPC) heard more than 100 people over three hours of public comment on STR rules and a recent moratorium placed on whole-home rentals, as the commission’s staff studies their impacts in neighborhoods citywide. It was among several meetings over STR policy within the last few months, as the New Orleans City Council began revisiting its STR laws a year after they were implemented.
The previous City Council body tasked the CPC with studying whether those rules — which provided a legal framework for platforms like Airbnb — but the recently inaugurated City Council amended that study to go even further, with a broader look at STR laws in similarly sized cities, and whether existing fees on bookings were enough to support the city’s affordable housing funds.
The new City Council also approved the creation of an interim zoning district (IZD) that hit “pause” on new permits and licenses as well as renewals for most types of whole-home STRs citywide. That IZD targeted “temporary” rentals of up to 90 days a year in whole homes in residential neighborhoods. The CPC approved that decision at its July 10 meeting.
The hearing was, like most hearings on STRs over the last few years, a study in contrast. STR operators with at least one property being used for tourist rentals argued that their STR income is what helps them afford to stay in New Orleans. Renters fear their own displacement as they begin to feel the squeeze from those same STRs.
But operators and STR critics now are largely on the same page when it comes to demanding a homestead exemption requirement, which the previous City Council had briefly considered before abandoning in its final STR rules.
That requirement would stipulate that the owner of the STR must also live on the property. It currently is part of the conditions for “accessory”-type rentals, like a spare room or guest house or half of a shotgun double.
It would effectively wipe out temporary rentals as they’re currently defined.
The city has issued more than 5,000 STR licenses over the last year, and nearly three-quarters of all STRs are for whole homes or apartments.
A report from housing advocacy group Jane Place Neighborhood Sustainability Initiative found that nearly 20 percent of all operators control roughly half of all STRs in New Orleans. In March, Gambit’s review of licenses issued by the city found the top 10 operators — including Sonder, Hosteeva and Stay Alfred — held more than 400 licenses with more than 500 listings.
Among Sonder’s properties is a commercially zoned fourplex on Mandeville Street in Marigny. Destiny Toro lived at the property until she was asked to leave in May when the owners sold to the STR operator. Toro told Gambit that her lease, and the leases for the three other units, housing eight people in total, weren’t renewed.
Toro asked the CPC for “strict regulations to prevent more people from becoming displaced.”
Toro’s story isn’t unique; property owners selling homes only to be flipped to more lucrative tourist housing has been a common thread through the last several years. But now the City Council’s moratorium puts STR developers in a bind after they’ve pumped money into projects priced for tourist housing (often at hundreds of dollars a night) that outpaces the kinds of rents that New Orleanians can afford, particularly in neighborhoods that suddenly saw bumps in property values and taxes after STR investment rolled in.
Ben Harwood — a developer with more than a dozen STRs in Treme — said he now has formerly lighted vacant properties and projects-in-stasis with the recent moratorium and has “no idea what’s going to happen.” He says fewer people are buying and renovating larger historic homes, the costs of which are greater than longer-term rents can support.
“It makes me want to sell my properties and move to another city,” he told the CPC.
One group at the meeting shouted, “Please do!”
Not only does there appear to be consensus to mandate homestead exemptions for STR operators, Uptown residents also are calling for protections for other neighborhoods impacted by STRs, facing the same fears that Garden District residents have warned since regulation talks kicked off a few years ago.
Some French Quarter residents, meanwhile, are taking the opportunity as City Hall is looking to redraft STR laws to ask for their expansion in the neighborhood — they’re mostly prohibited, except for a small strip of Bourbon Street. Real estate agents warned about deserted properties and high-priced rentals that would-be renters aren’t going for, and residents on Decatur Street — just outside the Bourbon strip — asked to get in on the action.
One Quarter resident said the neighborhood now is “rife with very part time residences” as a “playground for the ultra rich” that’s pushed STRs into nearby neighborhoods like Treme and Faubourg Marigny.
Faubourg Marigny Improvement Association President Allen Johnson said “we’ll be gobbled up” if the proliferation of STRs continues in the neighborhood.
“We want to see an inclusive New Orleans, where all the folks who make this city run can have a place to call home,” said Maxwell Ciardullo with the Greater New Orleans Fair Housing Action Center, lamenting neighborhoods in the city’s historic core carved out for “tourist playgrounds” from speculating STR real estate developers that push residents further from the city. “If you love New Orleans, then create housing for New Orleanians.”
Operators from Gentilly to Algiers Point agreed, calling for a homestead exemption to eliminate developers abusing the licensing pipeline and real estate market when “they don’t have a stake,” said Dana Washington, who echoed calls for tying temporary rentals to homestead exemptions.
Meg Lousteau said STRs can house up to 460 people within 12 blocks of her Treme neighborhood, what she says is the same as a 230-room hotel.
“Is this what the city intended? Because this is what we got,” she said. “It’s legal but it’s not OK.”
Members of Unite Here Local 23 hospitality workers said that type of proliferation is pushing them further from their hospitality jobs downtown.
Wynika White grew up in Uptown but lives in New Orleans East. She’s a server at Hilton New Orleans Riverside and said not only do STRs pose a threat to fewer filled hotel rooms and that accompanying revenue, they’re also artificially raising home prices and have pushed her out of the neighborhood she grew up in.
“I’m afraid we’ve seen the unintended consequences of short-term rentals run amok,” said Pat Galloway, adding that her block is empty most weeks unless STRs are booked. She said those homes won’t be counted in the upcoming 2020 Census and could impact how city services and programs and services are measured and funded.
“What’s a neighborhood without any neighbors?” she said.
STR industry reps continue to pledge working with City Hall on “common sense, enforceable regulations,” as HomeAway and VRBO have said, while ensuring New Orleans still is a place to do STR business.
Eric Bay with New Orleans STR group Alliance for Neighborhood Prosperity said STRs have been a “lifeline for average New Orleanians."
The City Council appears to support implementing a homestead exemption requirement, following several campaigns with a critical eye toward STR rules and enforcement, which councilmembers have agreed need to be hammered down.
The IZD largely keeps commercial STRs — that is, rentals in commercially zoned units like mixed-use complexes and units in neighborhoods like the CBD, or in the recently developed plots around Bayou St. John — off limits, except for units on the first floor where there also are residential units on subsequent floors (like, say, Magazine Street storefronts).
Mayor LaToya Cantrell has said she wants to “strike a balance” with operators and neighborhoods but hasn’t committed to new changes. She voted for the STR package as a member of the City Council.
The CPC staff is accepting public comments on its report through 5 p.m. Aug. 20. The report is due Aug. 21, and the CPC will consider the study at its Aug. 28 meeting. It also can defer to Sept. 11, but the deadline to send it to the City Council is Sept. 21.