Rules that would limit short-term rentals in New Orleans residential neighborhoods to owner-occupied homes are expected to advance another step Thursday, when the City Council will once again take up the issue.

The proposed regulations would be the first overhaul of rules established under former Mayor Mitch Landrieu that first made it legal for the city’s property owners to rent homes to tourists through sites like Airbnb and HomeAway.

The changes, which would place significant limits on that practice, have been wending their way through the council and the City Planning Commission for almost a year, since a new council and mayor took office in May 2018.

The regulations up for debate Thursday would amount to a wholesale change in the short-term rental landscape.

”I’ve been pleased with the attention to the different aspects of short-term rentals and how engaged some of the council members have been,” said Councilwoman Kristin Gisleson Palmer, who has led the charge on the issue since taking office last year. “A lot of the stuff that’s coming out now is actually more restrictive than what we originally envisioned.”

The biggest proposed change would be limiting residential short-term rentals to owner-occupied properties with a homestead exemption, meaning that the owner lives there most of the year. If such properties have more than one unit, such as a double or fourplex, the owner would be allowed to rent out the extra units.

Under the old rules, whole-home rentals were allowed without a homestead exemption, though with a 90-day annual cap on the number of nights they could be rented that proved difficult for the city to enforce. The new council last year banned the issuance of new whole-home residential licenses or the renewal of existing ones.

The Alliance for Neighborhood Prosperity, a group made up of short-term rental owners, sued over that ban earlier this month. The council is expected to discuss that suit during a closed-door session on Thursday.

The current proposal could also limit the number of short-term rentals allowed in a block.

The proposal has been praised by some short-term rental opponents.

“If the City Council is serious about protecting housing and reducing displacement and disruption, they should not allow every fourplex on a block or every unit in a commercially zoned apartment complex to become a full-time (short-term rental) operation,” said Breonne DeDecker, with the Jane Place Neighborhood Sustainability Initiative.

The council will also consider whether to keep the ban on short-term rentals in most of the French Quarter and possibly impose a similar prohibition in the Garden District.

Thursday's meeting, which starts at 9:30 a.m. in the council chambers, is yet another step in the long road toward new regulations. Proposals approved in principle by the council this week will then have to be drafted into an ordinance before coming back to council members for a final vote.

When that ordinance comes up for approval, likely at some point over the summer, the council will be able to make further changes, meaning nothing approved on Thursday is final.

Indeed, one key part of the regulations is not even expected to be discussed on Thursday: what restrictions to put on short-term rentals of properties, such as condominiums, in neighborhoods that are not zoned residential.

Short-term units in those properties are loosely regulated now, but the City Planning Commission has recommended the council adopt rules that would cap the number that are allowed in a single property and require those buildings to provide some affordable housing as well.

Before establishing those rules, the council is awaiting the outcome of a study looking at what kinds of affordable housing requirements could be put in place on those properties.

The council also is not expected to take up Thursday the issues of how the city will enforce the short-term rental rules or what kinds of information rental platforms such as Airbnb will have to share with the city.

A potential complication to the discussion is the inclusion of taxes on short-term rentals in an infrastructure funding deal that Mayor LaToya Cantrell’s administration has struck with the tourism industry. That deal assumes the city will reap about $26 million a year, largely from new hotel and short-term rental taxes, that would be directed to the city’s crumbling pipes and streets.

About $10.5 million of that money would come from raising taxes on short-term rentals to bring them in line with the higher tax rates now paid by hotels. In a joint letter, Airbnb and HomeAway warned that figure could fall by up to $6 million if the council’s regulations are put in place, since many current short-term rentals would not qualify under the proposed rules.

Council members seem largely committed to imposing the stricter regulations, regardless of the financial implications, but it is unclear how the administration will react to the potential loss of revenue.

Since becoming mayor, Cantrell generally has taken a hands-off approach to the short-term rental debate, and it's not clear whether that will change now that money she touted as part of her infrastructure deal is on the line. The mayor's office on Wednesday had no comment on whether Cantrell will seek any changes to the rules being contemplated by the council.


Follow Jeff Adelson on Twitter, @jadelson.​