The New Orleans City Planning Commission on Friday (Jan. 27) voted to endorse a new set of rules to govern the city’s short-term rental market that would limit residential vacation rentals to one per each side of a block, known as a blockface, and only allow an individual property owner to hold one permit at a time.
The proposed changes come after a federal court ruling last year gutted the city’s ability to enforce restrictions in residential neighborhoods.
The suggested rules are now forwarded to the City Council, which has the final say over the new law and can make any amendments they see fit to the City Planning Commission’s recommendations. Under court order, the city must approve new rules by March 31.
The Friday vote was a continuation of a meeting that began on Tuesday, but had to be cut short due to a tornado watch in the area. When public comments were taken on Tuesday, the proposed rules were criticized by short-term rental owners and neighborhood advocates alike.
The critics said the new rules don’t go nearly far enough to protect neighborhoods from being oversaturated with vacation rentals, leading to less and more expensive housing for residents and the degradation of neighborhood quality of life. Some said they should be banned in residential neighborhoods altogether.
“We care about short-term rentals because they ramp up displacement and the hollowing out of historically Black neighborhoods,” Maxwell Ciardullo, policy analyst with the Louisiana Fair Housing Action Center, said on Tuesday. “We don’t see any benefit to having short-term rentals anywhere outside of the CBD.”
Short-term rental owners, on the other hand, said the money they collect from vacation rentals is vital to covering their insurance and mortgage costs and staying in their homes.
Dana Dolder, who operates a short-term rental in Bywater, said she was supportive of some of the recommendations and understood the need to keep corporate short-term rental operators from overrunning neighborhoods. But she said the blockface limit would pit her against her neighbor, who she said was another resident short-term rental owner. In such cases, the short-term rental permit would be decided by lottery.
“Am I supposed to go head to head with her?” Dolder said. “That seems unfair. I don’t want to take that away from her. We’re just people trying to pay our mortgages.”
The City Planning Commission on Friday added new rules to the staff recommendations to try to appease both sides of the debate. One of the main complaints from short-term rental critics was that the original staff proposal didn’t include any limit to how many residential short-term rentals one person could own.
In response, the City Planning Commission voted to add a one-per-owner permit limit. They also reduced the number of allowable guests in each short-term rental from 10 to six, and the number of bedrooms from five to three.
The commission was also sympathetic to local resident short-term rental owners and added a recommendation for the city to develop a process to make exceptions to the block-limit rule. The process for applying for an exception, and the criteria for granting one, aren’t written yet, according to Bob Rivers, executive director of the City Planning Commission.
The City Council would be responsible for defining that process when passing the final law in the next couple months.
Rivers stressed that the city and City Planning Commission are working on a tight deadline, forced to move quickly after a panel of judges from the U.S. Court of Appeals for the 5th Circuit ruled that the city’s prime rule for limiting vacation rentals in residential neighborhoods — a homestead exemption requirement — violated the U.S. Constitution’s commerce clause.
“My guess is that between now and March 31 when the council deadline is … there’s going to be a lot more conversation about this,” Rivers said.
Almost everyone was in agreement that whatever the City Council decides, the city will likely need to come back and make more tweaks to short-term rental regulation. Perhaps the most common complaint was the city’s traditionally lax enforcement of the rules. An analysis by the Jane Place Neighborhood Sustainability Initiative, released Monday, found 6,927 New Orleans listings on Airbnb as of Dec. 2022, compared to only about 2,332 active short-term rental licenses.
“Without rigorous enforcement of STR regulations, operators will continue to see any enforcement attached to noncompliance as the cost of doing business,” the Jane Place report said. “Density or block restrictions attached to licensing will not change the behavior of scofflaws who operate illegally, in plain sight, and without fear of penalty.”
The proposed rules also don’t address commercial short-term rental permits, which make up only about half of the 2,340 permits currently issued by the city. They would only impact rentals on residentially zoned properties.
Purple dots represent residential short-term rental permits. Green dots show commercial short-term rental permits.
Commercial permits are limited to commercial and mix-used zoned properties, but are nonetheless often located in residential neighborhoods on mixed-use lots. The new rules would not affect, for example, the Brown’s Dairy development in Central City, which was originally pitched as 53 new affordable housing units, but has since changed into all short-term rentals.
“We have got to take a look at these commercial rentals,” Erin Holmes, executive director of the French Quarter neighborhood group VCPORA, said. “They’re just taking over neighborhoods in commercial corridors where a lot of residential units are.”
Limited effect on number of short-term rental permits
It appears the new restrictions wouldn’t cause a significant drop in residential short-term rental permits. The new one-per-owner permit limit isn’t likely to have a major effect, since the current homestead exemption requirement imposed the same cap.
The blockface limit will likely only have a modest effect as well. The City Planning Commission staff report found that only 128 blockfaces had more than one residential permit, with about 300 permits in total. An analysis by Verite found that if the cap were enacted today, it would eliminate about 170 short-term rental permits. That’s about 13.5% of currently active residential permits, or about 7% of total active permits, including commercial permits.
Of the 128 total blockfaces, 80 of those are instances where one property has multiple permits, according to City Planner Laura Byron.
Map of residential short-term rental permits on blockfaces with more than one permit.
Some residents and commissioners noted that the new rules may have also created a loophole by changing the rules for traditional bed and breakfast permits. Under current law, bed and breakfast permits also require a homestead exemption.
Similar to short-term rentals, the homestead exemption requirement for bed and breakfasts would be erased. But unlike short-term rentals, bed and breakfasts wouldn’t be subject to any blockface limit. That could theoretically allow short-term rental operators to evade the blockface limit by getting bed and breakfast permits and continuing to advertise on sites like Airbnb.
“It does seem like a loophole,” Commissioner Katie Witry said.
To address that issue, the City Planning Commission staff on Tuesday added a recommendation to change bed and breakfasts from a “permitted” to a “conditional” use permit. That creates additional hurdles for people trying to get a bed and breakfast permit.
But not everyone was convinced the additional hurdles were enough to stop short-term rental operators — especially wealthy, corporate ones — from taking advantage of the change.
“Too many times the city rubber stamps conditional use permits,” Allen Johnson, president of the Faubourg Marigny Improvement Association, told Verite.
Rivers once again emphasized that the city is having to craft rules under a tight deadline. He said the commission staff had trouble accessing enough data about current bed and breakfast licenses to fully address it, and that this is one of the issues the city and commission would likely return to.
“There are a lot of questions we have, and we thought at this stage, putting a very onerous process in the way of expanding bed and breakfasts is the stopgap measure we can put in place right now,” Rivers said. “But the intention is to take more time to look at it.”
All in all, the restrictions did not go far enough for many short-term rental opponents, many of who want to see vacation rentals out of residential neighborhoods altogether in light of the city’s affordable housing crisis and the negative impacts they have on neighborhoods quality of life.
Affordable housing advocates, including the Louisiana Fair Housing Action Center and the Jane Place Neighborhood Sustainability Initiative, have advocated for banning whole-home rentals altogether, with the possible exception of certain commercial districts or when they’re coupled with affordable housing projects
The groups point out that cities and counties across the country, including neighboring Jefferson Parish, have enacted similar blanket bans in residential areas. The City Council asked the City Planning Commission to consider partial or citywide bans, but that didn’t end up in the staff’s recommendations.
“We have been working nearly a decade against short-term rentals in all residential neighborhoods,” Holmes said. “They displace residents. They erode communities.”
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