Less than 18 months after it passed sweeping regulations to try to rein in the explosion of short-term rentals in New Orleans, the City Council has ordered a full review of the legislation's effect, with the goal of identifying ways it might be improved.
The City Council will soon consider a proposal that would put a "soft cap" on the number of short-term rentals in certain commercial corridors…
The council voted 5-0 on Thursday to direct the City Planning Commission to restudy the rules in their entirety.
The move was not unexpected, as the fairness of the regulations continues to be debated and because the original ordinance, which was passed in late 2016 and went into effect the following April, was not wholly supported by some council members, including Mayor-elect LaToya Cantrell.
Voting for the new study were co-sponsors Cantrell, Jason Williams and Jared Brossett, plus Susan Guidry and James Gray. Stacy Head and Nadine Ramsey were absent for the vote.
The Planning Commission must hold a public hearing on the matter within a month and produce a study for the council to consider within four months, meaning by late July.
Whatever recommendations the commission produces will be presented to an almost entirely new council. Only two of the seven current members will be taking the oath for new terms in May.
The Cantrell administration is likely to play a big role in whatever decisions are made, as Mayor Mitch Landrieu's office did in the creation of the current laws.
“This is the perfect time for this study to happen, because we do see a lot of bad actors, and (we are) getting more requests for zoning changes just to create commercial use on blocks that have no commercial activity,” Cantrell said.
Cantrell also is pushing a separate ordinance that would allow up to two short-term rental units per property in neighborhoods that typically house small businesses. Any additional units would have to be reviewed on a case-by-case basis.
The council is expected to consider that proposal at its April 5 meeting.
That and any other regulations will mean little, however, if enforcement is shoddy. Jason Williams complained about lackluster enforcement of the current law at the council meeting Thursday, and he said the study also would examine best enforcement practices.
“In this roughly first year, I have yet to see effective enforcement from the administration, nor have I seen a measure of voluntary compliance on the part of these companies and platforms,” he said.
Cantrell, however, was more complimentary of the administration, saying that although enforcement can be improved, officials have done a “pretty good job” in the short time the law has been on the books.
The council lifted a blanket city ban on unlicensed temporary rentals in 2016 after thousands of homeowners began listing their properties on Airbnb and other sites despite the ban and after the city struggled to enforce it.
The idea was to put better controls on the properties and ensure that the city received at least some tax revenue from them.
The motion passed Thursday asks the Planning Commission to examine rules and make suggestions about potential changes, which could include:
- Limiting the number of short-term rentals per block or property, or licenses per person. There are no such caps now.
- Tying the short-term rentals to homestead exemptions, a plan pushed by some council members early on. That would require owners to live at the properties they are renting out.
- Changing the fees the city imposes.
- Beefing up enforcement.
Companies like Airbnb have increasingly been blamed in part for the city’s shortage of affordable housing, as property owners in high-demand neighborhoods can often rake in far more from temporary rentals than they would from full-time tenants. That can lead to inflated rents at nearby apartments or displacement of longtime renters, critics of the tourist rentals say.
Supporters counter that the rentals help defray homeowners’ rising expenses, particularly for people who rent out a portion of their single-family home or one side of a double.
They also note that the city also collects permit fees, along with fees for each night a short-term rental is occupied, and part of that money goes into an affordable housing fund.
Other rental advocates argue that the rentals help eradicate blight, as some investors have purchased and renovated blighted or abandoned homes to turn them into rentals.
The city's current rules apply to roughly 4,400 licensed short-term properties in New Orleans.