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Super Bowl-ing For Dollars 

Charles Maldonado on New Orleans' room shortage for the Super Bowl — and the market

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click to enlarge The house on the left is advertised for rent during the Super Bowl, and is next door to a permitted B&B, according to city records. - PHOTO BY CHERYL GERBER
  • Photo by Cheryl Gerber
  • The house on the left is advertised for rent during the Super Bowl, and is next door to a permitted B&B, according to city records.

  All legal rentals must undergo inspection and owners must pay taxes on rental income — anywhere from 50 cents per room night for small bed-and-breakfasts (B&Bs) to the full 13 percent hotel-motel tax for larger operations.

  "What surprises me is that the city isn't going after this because it needs money," Matassa said, picking up a stack of rental printouts from VRBO.-com. "This right here is a pile of short-term rentals that the city is not collecting revenue from. ... It's amazing to me that no one can figure out where these are. You stand on the corner of Dauphine and St. Claude where our grocery store is, we have one, two, three, four — going each direction."

  Brian Furness, who runs Gentry House, a permitted B&B in the French Quarter, pays $600 a year for his permit. He also pays 50 cents in hotel occupancy tax per occupied room night.

  "I probably pay about $500, $550 [in taxes] or something like that," Furness said.

  He co-chairs French Quarter Citizens' short-term rental committee with Jerry Zachary. Both agreed with Matassa about lax enforcement by the city government.

  "Every decade or so, someone like yourself writes an article," Zachary said. "There's a little hullabaloo, and nothing happens. We've tossed it around forever."

The illegal short-term ordinance is under "criminal law" in the Municipal Code, but the New Orleans Police Department isn't responsible for enforcement. That's handled by the Bureau of Revenue.

click to enlarge Craigslist ad for Super Bowl vacation rentals.
  • Craigslist ad for Super Bowl vacation rentals.

  Advertisers for unlicensed rentals are supposed to receive a letter of warning for a first offense. Subsequent ads, if discovered by the city, can result in $500 fines and up to 30 days jail time for violators. Yet examining a list of every permitted hotel, motel, bed and breakfast and guesthouse, it's clear that many of the homes now being advertised — in some cases multiple times — aren't on the city's regulatory radar.

  Anne Beck, a licensed real estate agent for Coxe Property Management & Leasing, administers a website featuring vacation rentals. As of last week, her website showed six homes — in the French Quarter, the Central Business District, Uptown and Mid-City. None are on the city's list of permitted short-term rentals. In a phone interview, Beck said she didn't know they needed a permit.

  "I'm not even aware of such a thing," she said. "We do corporate rentals as a mainstay of our business, so the owners have asked me to rent for Super Bowl. We're a real estate company. We're not in the hotel business. This is not something we usually do."

  Byron Jeanice, who owns one of the houses on Beck's website, said he didn't know about the requirement either. He said he planned to ask Beck to remove his listing from the site. (It was still up as of late last week.)

click to enlarge Craigslist ad for Super Bowl vacation rentals.
  • Craigslist ad for Super Bowl vacation rentals.

  Rabe, however, said she believes many agencies and property owners are aware of the law but choose to flout it. She said the problem isn't ignorance — it's the process. Certain neighborhoods, such as the French Quarter and the Garden District, have zoning moratoriums on new short-term rental properties, she said.

  "Some of those properties do run illegally because they cannot get a permit," she said.

  But even in cases where a new B&B or guesthouse would be allowed, getting permitted is often confusing and time-consuming.

  "It's an arduous process," Rabe said. "We have had lots of people say they feel that way. And there are multiple trips to City Hall. You still have to go up to the seventh floor and down to the fifth floor and back to the seventh floor. It can be just tedious."

  Another problem, Rabe said, is the City Code doesn't actually provide for vacation home rentals. The only available permit for anyone wishing to rent out a house is a bed-and-breakfast permit — and the B&B mayoralty permit requires an owner to live in the house as his or her primary residence. Part-time New Orleans residents, who might be especially inclined to rent a home to tourists, have no way of doing it legally.

click to enlarge Craigslist ad for Super Bowl vacation rentals.
  • Craigslist ad for Super Bowl vacation rentals.

  "You have to have a homestead exemption on that property and show that you live there," she said. "There's just no place for them in the works anywhere. There's a need for that kind of language and there's a need for that kind of rental."

  Rabe said PIANO has been discussing the creation of a new designation that would allow for vacation home rentals to be licensed and taxed.

  "It's an exorbitant amount of money that is not going to be taxed," Rabe said. "That's our big thing: We're all paying taxes. We're property owners in the city of New Orleans. They're not contributing to the city tax base. That's our really big sticking point. We welcome properties to get licensed and join our community. There's a definite need for that."

  So what's the city doing about illegal rentals?

  "The City looks into properties that have received complaints, and when applicable, the Bureau of Revenue will send an administrative subpoena that asks the resident or business to come into compliance with the law," mayoral spokesman Ryan Berni wrote in an email. "Given the resources we have, we do what we can to discourage companies who are actively advertising illegal short-term rentals."

  The law also requires the city to publish a semi-annual report on illegal short-term rental enforcement on its website, which it has not done. Gambit filed a request for records of subpoenas issued and city's follow-up actions for the last six months, but as of press time had not received the information.

  Furness said he doesn't think the city should go after every advertised property, but he would like to see more enforcement of large-scale guesthouses and real estate agents who advertise multiple properties for many homeowners.

  "There are two types of illegal short-term rental operations. ... Those on VRBO — you have to pony up money, that's not a freebie — or [those with] a website," he said. "There's all kinds of ways to interact with them. Those are illegal rentals being operated as a business. That has to be the first target. But when your cousin Jed rents his house in Lakeview out for the Super Bowl, that's more of a mom-and-pop-type thing. That should maybe not come first."

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