Pin It
Favorite

The hotel next door 

The debate over short-term rentals takes center stage at New Orleans City Hall

click to enlarge coverstory.jpg

In New Orleans, you can rent a tent in a backyard for $26 a night or a six-bedroom mansion for $600. There are more than 4,000 local listings on Airbnb alone.

  More than 70 percent of those listings advertise entire homes or apartments. The debate over short-term rentals in New Orleans isn't so much over the city's spare bedrooms and pull-out couches but the more than 3,000 entire homes that, with taxes and permits, have the potential to bring millions of dollars into city coffers. It's in the city's fiscal interest to wrangle a revenue stream from the thousands of listings sitting on a currently illegal market — but at what cost?

  Monika Gerhart-Hambrick, policy advisor for the Greater New Orleans Fair Housing Action Center, says if those rentals do generate revenue, and if the city is serious about affordable housing concerns, then figuring out how to get a handle on short-term rentals could be an important step toward long-term affordability.

  "We're less concerned with tourists and more concerned with New Orleanians," she told Gambit. "There's a whole host of issues driving affordability — short term rentals being one of them."

  Short-term rental maps largely mirror where visitors are going when they come to New Orleans. Most listings are in Uptown and the French Quarter and downtown areas, but listings in other neighborhoods are increasing. The number of listings in Treme and the Fairgrounds jumped 136 and 172 percent, respectively, from 2015 to 2016.

  According to data-scraping website Inside Airbnb, more than half of Airbnb operators list more than one property and "are unlikely to be living in the property, and in violation of most short-term rental laws designed to protect residential housing," according to the website. Stay Alfred Vacation Rentals, for example, has 40 listings.

  Next month, the New Orleans City Planning Commission is expected to vote on recommendations from its staff outlining how to regulate short-term rentals — after six years of debate — while enforcement of laws already on the books has slacked. Short-term rentals aren't going anywhere. Even its advocates admit too much regulation will push them underground, and it's unlikely the city will ban them outright. After years of debate, with little to show for it, short-term rentals could be legal by Jan. 1, 2017. What will the new rules look like, and what guarantees the city and industry will enforce them?


As short-term rentals increase, residents fear losing their culture and neighborhoods — or their own home — to de facto hotels. The hotel and restaurant industries fear losing rooms as well as staff that relies on affordable housing close to their hospitality gigs. Housing advocates fear losing the battle for affordable housing. Neighborhood groups fear handing their tony blocks over to perma-beaded tourists.

  It's happening already in Marigny and Bywater. Last year, artist Caroline Thomas parodied bro and bachelorette party invasions with Coney Island-style, carnival barker-esque signs ("Who needs neighbors when we've got brunch?") as her Royal Street block (where "you too can live like a local") went full Airbnb. During the 2016 New Orleans Jazz & Heritage Festival, posters aimed at Airbnb tourists declared, "You are directly responsible for displacing the last remaining long-time neighborhood residents." Last month, the dozens of posters advertised Airbnb hosts' phone numbers in the Marigny. Above them, the words "Airbnb destroys neighborhoods!"

  New Orleans isn't in new legal territory. Laws attempting to regulate short-term rental websites have been adopted and changed across the U.S. and Europe. Whole-home rentals are being phased out in Austin, Texas. They're banned in Berlin, Germany. When Airbnb's hometown of San Francisco rolled out legalization plans last year, fewer than 300 people signed up, making more than 90 percent of listings illegal. San Francisco's ordinance levies fines up to $1,000 a day for unregistered listings, though critics say the city isn't collecting them.

  State lawmakers, anticipating New Orleans' adoption of new rules this summer, approved a 4 percent state hotel sales tax for short-term rentals — but they killed a bill that would give the State Fire Marshal authority to enforce fire codes and other basic safety requirements at those same rentals. The fire marshal supported the latter measure, but the industry opposed it.

  New Orleans City Council members agree the current laws, which essentially allow only licensed and taxed bed and breakfasts, are unenforceable.

  "It would be naive to expect that there is any rational scenario in which short-term rental websites would stop operating in New Orleans," At-Large Councilwoman Stacy Head told Gambit in an email. "I believe that short-term rental websites are in New Orleans to stay, like they are in all major tourist cities in the world (even in spite of attempted bans). I believe, and have stated many times, that the most practical way to reduce the negatives of short-term rentals is to regulate them and harness due tax and fee dollars for aggressive enforcement against bad operators or actors."


Pending before the New Orleans City Planning Commission (CPC) are nearly 200 pages from its staff outlining changes to the city's zoning codes, a framework for short-term rentals as they're being used now through websites like Airbnb. The staff report suggests four types of short-term rentals: "Accessory" or owner-occupied homes renting out two spare rooms or three rooms in half a shotgun double; "Temporary" homes rented for no more than 30 days a year; "Commercial" vacation homes in commercially zoned corridors; and "Principal Residential" rentals, or entire homes in residential neighborhoods.

  Whole-home rentals would require a conditional use permit under the proposed zoning laws and would be subject to density restrictions. Four rentals would be allowed per residential block in Bywater, the French Quarter, Marigny and Treme. Three per block would be allowed in most other residential areas, and two per block in Lakeview, New Orleans East and Algiers. Non-residential or "commercial" neighborhoods would have no restrictions. The CPC objected to whole-home rentals in a previous staff report, but another draft put them back on the table at Mayor Mitch Landrieu's request.

  Once the CPC votes on the latest recommendations, their fate lies with the New Orleans City Council. District A Councilwoman Susan Guidry told Gambit whole-home rentals pose "the biggest threat to the quality of life of our long-term residents." Head says those types of rentals should be "heavily regulated." Guidry and Head own rental property in New Orleans. Both say they have no plans to use them for short-term rentals.

  District D Councilman Jared Brossett says he has "many concerns regarding this issue, including the effects on the affordability of housing, preserving the integrity of neighborhoods, prioritizing adequate housing inspections, ensuring public safety, and preventing the commercialization of residential neighborhoods as a result of whole-house short-term rentals."

  In a statement from spokesman David Winkler-Schmit, District B Councilwoman LaToya Cantrell said she "is really interested in seeing what the City Planning Commission does" in the wake of a City Council motion directing the CPC to examine short-term rentals in the context of the city's Comprehensive Zoning Ordinance.

  Council Vice President Jason Williams and District E Councilman James Gray did not respond to emails from Gambit requesting comment.

  Councilwoman Nadine Ramsey, whose District C encompasses the French Quarter and Marigny, areas with a growing Airbnb footprint, still hasn't decided (publicly at least) what to do about them. "Short-term rentals, and any governing legislation, involve the issues of enforcement, quality of life, property rights and availability of housing to name a few," Ramsey said in a brief statement to Gambit. "This process is still unfolding and the Commission has not yet made its final recommendation. I am continually receiving the input of stakeholders and residents. All of this will be weighed as we move through the process."

  That "input" and "process" started as late as 2011, when New Orleans Inspector General Ed Quatrevaux said he "hoped to launch an inquiry" on short-term rentals that year. Last week, Paula Pendarvis with the IG's office confirmed to Gambit a report never was produced.

  Landrieu, too, didn't clarify his administration's position on whole-home rentals, but he echoed the Council's concerns about enforceability. "We are committed to seeking broad stakeholder input in order to establish regulations on short-term rentals that are workable, equitable and enforceable," Landrieu press secretary Hayne Rainey said in a statement to Gambit. "It is our goal to regulate, tax and limit short-term rentals in the city."

  Enforcement, however, hasn't kept up with the volume. Short-term rentals ballooned as the city hosted Super Bowl XLVII in 2013. Gambit filed a public records request for the number of subpoenas the city issued to illegal operators between June and September 2012. The answer: zero.

click to enlarge thinkstockphotos-463625865.jpg

Short-term rental proponents say they improve neighborhoods, not disrupt them. Head told Gambit that "whole-home short-term rentals can be appropriate and beneficial, particularly as a tool for addressing some of the [more than 10,000] blighted properties in our city." Short-term rental industry group Alliance for Neighborhood (ANP) wants those density caps based on the city's entire housing stock — including areas still struggling with vast swaths of blight like the Lower 9th Ward and New Orleans East, where tourists are unlikely to stay. "Is there a magic number on that density? No," ANP President Eric Bay said. "But we do think there is some way to manage those density restrictions."

  In a letter to the CPC and City Council, ANP has asked the city to refrain from "stiffening" density restrictions, such as banning whole-home rentals altogether in residential areas. Bay emphasized the group wants to "equalize the playing field" by adding a hotel-motel tax to short-term rentals, along with other markers of "responsible home ownership," from basic safety measures to potential "quiet" hours. ANP doesn't want "every house on the block" listed as a short-term rental, Bay says, but too many density restrictions on whole-home rentals would kill hundreds of listings. "There are some bad actors — we're not advocating for them," Bay said. "Sometimes the nicest house on the block is a short-term rental."

  In January, the travel website Expedia bought HomeAway, the umbrella short-term company for sites such as VRBO, adding it to its cache of travel options from planes to rental cars to hotel rooms. HomeAway's newly launched "Stay Neighborly" program aims to identify those "bad actors" in its networks, but the program only relates to noise or other complaints, not whether the listing is operating without a permit or license. Matt Curtis, HomeAway's senior director of public policy and government affairs, says companies aren't yet able to prevent people from joining or posting an ad if they don't have a required permit — raising the question of how companies will police themselves if the city's already-stressed legal and code enforcement departments aren't able to keep up.

  Curtis says it would be a challenge to allow only people with a registration number or permit to place ads, but he's willing to hash it out.

  "We have to get a to a place where we finish the policy and help the city understand how to build the policy to achieve compliance," Curtis said. "We want to get registration to be as compliant as possible. ... If we get to a place where the policy says anything along the lines of, 'You have to list a registration number' ... that's a conversation we're willing to have."

  Neighborhood groups have pressed short-term companies to share their data: where the listings are, who's listing them, and how often. The industry is reluctant to share data. It shares some statistics — like the ages and average nights of stay — but not raw numbers.


The Harvard Business Review describes Paris at the center of Airbnb's "existential expansion," inviting tourists to live like a local and "belong anywhere" among the city's 40,000 list-ings while dissolving the rea- sons people choose to live there in the first place. If tourists are the only people living in your city, why even go? New Orleans faces a similar outlook. In a state with some of the weakest renters' protection laws in the country, what can you do if your landlord gives you notice to leave your home once your lease is up, only to put it on Airbnb? In a word: nothing.

  The Greater New Orleans Housing Alliance estimates that the city will need to make available more than 33,000 affordable units over the next decade — at a rate of more than 3,000 a year — to meet the demand for new housing. If that projected need isn't met, the Housing Alliance claims, real estate costs (and rents) will continue to skyrocket, edging out lower- and middle-income residents. But occupied addresses have climbed by only 2,211 a year since 2010. In his recent State of the City address, Landrieu unveiled his five-year housing plan, calling for 7,500 affordable housing units by 2021. "We must ensure that working people do not get priced out of New Orleans," he said. "They are the backbone of our city."

  Until last month, housing advocacy groups largely had sidelined the short-term rental issue. It's not that they weren't seeing the rise in short-term rentals as a threat, it's that there was little commitment or promise from the city to focus legislation or funding on long-term rental issues in the city — where there are absolutely no renters' rights or rent control and a slumlord-ruled stock of falling-apart housing with old pipes, faulty foundations, termites and dozens other issues low-income renters are ill-prepared to battle. Any potential threat to the affordable housing stock for residents still is a threat. As the Housing Alliance says, "Every unit counts."

  Following more than three hours of public comment from speakers representing hotels and the Garden District at a recent meeting, City Planning Commissioner Royce Duplessis noted "a lack of advocacy on behalf of poor people" despite concerns from the crowd about short-term rentals pushing out lower-income renters, particularly artists, musicians and hospitality workers. "Where's the advocacy of people who can't take off the entire day to be here?" he said. "Where are the advocates for people struggling to survive in this city?"

  The Housing Alliance proposes a 2 percent transaction fee on each rental to help fund the Neighborhood Housing Improvement Fund (NHIF), a city trust to potentially "offset" affordable housing concerns. The Alliance also calls for a rental registry, which the City Council floated last spring but did not adopt, and for the city to leverage its existing publicly held land assets — which also are included in Landrieu's housing plan.

  The Greater New Orleans Fair Housing Action Center also clarified its position on short-term rentals last month, stating that such rentals "surely exacerbate the housing affordability crisis that existed prior to their proliferation in the New Orleans area."

  Public funds also have played a significant role in gentrifying New Orleans neighborhoods, from large investments in downtown's St. Roch Market and Crescent Park to beautification efforts and "infrastructure improvements" including the expanded streetcar line on Rampart Street. But Gerhart-Hambrick says there are no parallel efforts for ensuring affordable housing for current residents as those neighborhoods see higher property values.

  "Those investments are not coupled with investments to keep long-term residents in the homes they have, whether they're renting or owning," she said. "It definitely raises questions about who these neighborhoods are for."


Where the New Orleans City Council stands on short-term rentals
Pin It
Favorite

Comments (2)

Showing 1-2 of 2

Add a comment

 
Subscribe to this thread:
Showing 1-2 of 2

Add a comment

Submit an event Jump to date

Latest in News

More by Alex Woodward

Spotlight Events

  • St. Claude Second Saturdays @ St. Claude Arts District
    2820 St. Claude Ave.

    • Second Saturday of every month
    • 4 going/interested

© 2016 Gambit
Powered by Foundation