Short-Term Rental Ordinance Heads To New Orleans City Council

Oct 6, 2016

The New Orleans City Council is preparing for a long and emotional debate October 20  on how to deal with short-term rentals. An ordinance is on the table that’s designed to regulate the industry that many credit for letting them make enough money to stay in their homes. Others argue that an abundance of visitors staying in neighborhoods throughout the city is ruining their quality of life.

It’s a pretty quiet weekday morning in the Faubourg Marigny.

Allen Johnson says by the end of the week, that quiet will disappear.

“You see all the suitcases rolling in Thursday night, Friday morning, Friday afternoon. There’s lots of times in a shuttle bus,” Johnson said. “There’s one large house here that rents out I think about 12 people for party groups that come in during the weekend.” 

Johnson is the new president of the Faubourg Marigny Improvement Association, and he’s been working on ways to regulate short-term rentals for a few years now.

The city says there are 174 short-term rentals available in the Marigny.

He said, “Going to all the city planning meetings….It has taken up a lot, a lot of our time. It seems we’re always reacting to the actions of the city, rather than doing things that we would like to do to really promote and build up our neighborhood.”  

It’s a frustration that’s building all over the city – not just in high-tourist areas.

Short-term rentals have operated illegally for years in New Orleans, with residents renting out a spare room or separate apartment unit to make some money. But its popularity has spread quickly. Even in neighborhoods far from popular tourist destinations, like Old Arabi, Gentilly, and New Orleans East. Airbnb is only one of many companies offering accommodations. HomeAway is another site featuring hundreds of locations in New Orleans.

Matt Curtis is a spokesman for HomeAway. He thinks there’s some middle ground that can be reached in terms of managing his industry. And he says there are ways in the ordinance to address neighborhood concerns.

“There are certainly regulations that are good examples out there in the world, where we can create a registration program and try to get a handle on the total numbers of short-term rentals,” Curtis said. “So that if there are pockets of places where there might be more than there are in other parts of the city, then there’s certainly a regulation that can be put in place to address that.” 

The New Orleans Planning Commission has spent the past two years exploring how best to regulate the short term rental industry. It compiled a 140-page report for the city council.

It estimates the city could take in $400,000 a year in taxes if it levied the 1.5 percent tax on short-term rentals that it now gets in the 13 percent state hotel and motel sales tax.

But how?

“If whole-home short-term rentals especially were allowed to become legal and no limitation on density, well, it would be Disneyland.” 

That’s Maevis Early, executive director of the Greater New Orleans Hotel and Lodging Association. She’s been working with the New Orleans Convention and Visitors Bureau for more than two years on the short-term rental market.

She says the hotel industry can deal with the competition, if it’s fair.

“Hotels, when they pay their taxes, there’s this matrix, you know, with 25 questions on every single day, and then you pay your hotel taxes on that. So it’s very, very specific,” Early said. “So the short-term rental companies should be required to do the same thing so that the city is sure that they are paying appropriate taxes, just like hotels are.” 

The commission is recommending the city add three or four staff positions with a $300,000 budget to keep track through the Department of Safety and Permits. That money would come from permit fees. Those are recommended at $200 a year for units with owners on site.

But Early says there are too many unknowns.

“If you pass it and you make it legal, then you’re going to go figure out enforcement? Shouldn’t you figure out enforcement first to protect everyone?”

The planning report notes that the city needs to get state legislation passed to levy the hotel tax on short-term rentals. It also needs a process set up to handle complaints.