A lengthy report from housing advocacy group the Jane Place Neighborhood Sustainability Initiative (JPNSI) says that nearly 20 percent of short-term rental operators in New Orleans control nearly half of all listings.
The report from the housing justice and community land trust organization offers a detailed look at how large companies and developers, including locally based real estate investors, have leveraged the city’s short-term rental (STR) laws to turn potential housing stock into a sprawling enterprise of de facto hotels.
"Short Term Rentals, Long Term Impacts: The Corrosion of Housing Access & Affordability in New Orleans" follows extensive media reporting and debate over the impact of STRs in New Orleans, which spiked in the wake of a package of city laws that provide a legal framework to allow them to operate - city officials hailed it as a model compromise with the industry while extracting tax revenue from an already-existing practice. But JPNSI - which has led community meetings to share its data over the last several months - says the laws have merely provided companies and developers with an economic incentive to prioritize visitors at the expense of residents.
[jump] [content-1] JPNSI found that 18 percent of all operators control roughly half of all STRs in New Orleans. Gambit’s recent review of licenses issued by the city found the top 10 operators - including Sonder, Hosteeva and Stay Alfred - hold more than 400 licenses, with several operators holding several listings per license; JPNSI says those top 10 operators have 568 listings.
The group tracked STRs over the last three years, finding “growing numbers and density against an ever-deepening housing crisis and an ever-deepening displacement crisis” despite the city’s regulatory efforts to combat those things," said JPNSI program manager Breonne DeDecker
“What is happening in New Orleans is not home sharing but the hotelization of residential housing,” DeDecker said. “The data is clear - our city’s permissive STR laws have enabled and encouraged intense disruption in the housing market due to speculative investments and spillover costs for residents, due to higher rents, higher purchase costs for homes, and higher property values.”
In statement to Gambit, Airbnb press secretary Laura Rillos says the study uses "unreliable scraped data to make false conclusions about our community when the reality is the vast majority of New Orleans hosts are sharing the homes in which they live."
Rillos says Airbnb is "committed to protecting long-term housing" and is "working with city enforcement agencies to ensure they have the information they need to enforce against bad actors." Rillos says Airbnb has removed and to date we have removed roughly 3,000 illegal listings from its platform.
"We remain committed to working with the City of New Orleans to ensure home sharing continues to strengthen the local economy, while protecting long-term housing and neighborhood character," Rillos said.
But JPNSI says loopholes in the STR laws allow property owners and single entities to buy and use multiple properties as STRs, skirting the industry narrative that the rentals are used by residents to supplement income by renting out a spare room or apartment.
JPNSI public programs coordinator Lydia Nichols said “the city’s current approach to short-term rentals facilitates the large-scale conversation of housing into scattered-site hotels,” inflating housing costs, encouraging gentrification, and impeding the availability of affordable housing. “Where are all the people who used to call these hotel rooms home?”
The city’s STR laws went into effect nearly one year ago, establishing 90-day caps for whole-home rentals in residential areas and unlimited rentals in commercially zoned areas. Platforms also are required to share data with the city on whether those caps are met.
JPNSI reports a 135 percent increase of STRs in New Orleans since 2015; 4,319 listings on Airbnb are for whole home rentals, a 232 percent increase since 2015. Those rentals comprise 82 percent of New Orleans’ STR stock, which when made available for more than half the year under limitations in place with current laws, are still “exclusively used as vacation housing for tourists, as the units are off-market for half of the year and, therefore, unavailable to residents.”
JPNSI recommends the city adopt a homestead exemption requirement and that platforms obtain permits to operate in the city - similar to how ride-hailing companies Uber and Lyft are able to operate.
Terms of those permits include: remove unlicensed STR listings, require STR operators provide license numbers to list properties, share operator identities and addresses with the city, share complaints and discrimination allegations, and ensure operators face fines for violations.
The group also recommends platforms streamline data-sharing with the city and include a 15 percent fee on each booking to support the city’s affordable housing efforts - an increase from $1 a night, which JPNSI argues is insufficient to support the city’s affordable housing coffers.
The report follows the New Orleans City Council’s recent call on the City Planning Commission to study the impacts of short-term rentals following the city’s 2017 adoption of the new regulatory measures.
The City Council approved a motion March 22 tasking the CPC with studying whether “modifications are warranted” and what recommendations can be made, including the possibility of homestead exemptions. The CPC will hold a public hearing within the next two months and will complete the study this summer.
The CPC also will study the feasibility and impact of density caps and block-face requirements - JPNSI says the lack of those requirements have oversaturated residential neighborhoods with STRs, particularly in Black neighborhoods seeing a demographic shift from while losing access to residential needs (parks, transit, neighborhood bars and restaurants). On on block on Kerlerec Street in Treme, there are 12 permitted STRs, with 26 bedrooms allowing 61 visitors.
Homestead exemptions have been floated by the CPC staff and both incoming and outgoing councilmembers, though its inclusion as an amendment to the current ordinance failed to get enough support among the council during a 2016 vote.
District D Councilmember Jared Brossett, the only councilmember to vote against the STR package, once again called on the need for homestead exemption requirements.
“The commercialization of our neighborhoods with these short-term rentals and disruptions are deteriorating the very fabric of our city,” he said March 22. “I still do believe stricter regulations and that homestead exemption should apply”
Council President Jason Williams noted a difference between residents renting out an extra room or bed and corporations owning multiple properties to effectively run a hotel industry through housing, “artificially driving up the cost to buy or rent a home in our city.”
“That is patently unfair and I have a serious problem with that,” he said. “I have yet to see effective enforcement from the administration nor have i seen voluntary compliance with these companies and platforms.”
Mayor-elect LaToya Cantrell, however, said she believes “in a short time I think they have been doing a pretty good job with corrective action” but noted that there are “bad actors” often making requests for zoning changes to establish commercial STRs in pockets of residential areas.