‘A major paradigm shift’: New Orleans hires former short-term rental executive to lead land use regulation
3rd August 2020 · 0 Comments
By Michael Isaac Stein
The Lens
The city of New Orleans has hired Peter Bowen, the former general manager of major short-term rental operator Sonder, as the city’s new deputy chief administrative officer of land use. In his new position, Bowen will manage and oversee major departments including the Department of Code Enforcement and the Department of Safety and Permits, whose long list of responsibilities includes short-term rental permitting and enforcement.
But Bowen isn’t simply replacing the former deputy, Chad Dyer, who left the position in September. Bowen’s role is being expanded and recast as the “founding entrepreneur” of the newly created Office of Business and External Services.
In an interview, Gilbert Montaño — the city’s Chief Administration Officer and top aide to Mayor LaToya Cantrell — told The Lens that the new office represented “a major paradigm shift” and an attempt to blend the city’s land use regulation departments with its economic development initiatives.
Broadly, the aim of the new office is to present New Orleans as “the world’s best city to do business.”
Not only will the newly created office represent a major change in how the city enforces land use regulations, it will physically move several city departments from City Hall to leased offices in Orleans Tower on Poydras Street, including the Department of Safety and Permits, the City Planning Commission, and the Historic District Landmark Commission.
Bowen’s new position caught the attention of some affordable housing advocates on Monday due to his former job as general manager of Sonder — a San Francisco-based company that has grown to be one of the largest operators of short-term rentals in New Orleans. In the resume he submitted for the job, Bowen claimed that during his tenure at Sonder he “Blitz Scaled the New Orleans market for Sonder from launch to 1,000 apartments (2,500 rooms) in under 36 months.”
A report from March 2018 by Jane Place Neighborhood Sustainability Initiative, an affordable housing group that opposed the expansion of the legal short-term rental market in the city, found that Sonder had more listings on Airbnb than any other short-term rental operator in the city with 124. (At the time, the legal short-term rental market in the city was near its height, with about 4,300 permits issued by the city. That number has since shrunk considerably following a series of new legal restrictions imposed by the City Council. The city’s online database showed about 1,850 active permits as of last Tuesday morning.)
Short-term rental licensing data compiled by The Lens shows that in March 2018, Bowen’s name appeared on more than 80 city-issued short-term rental permit documents as a point of contact — usually the person or company who acts as a property’s short-term rental manager — more than any other individual. Many were concentrated in apartment buildings in the Central Business District.
“We worked closely with hospitality workers that were evicted to make way for high-end, absentee Sonder short-term rentals under Peter Bowen,” said a Tweet from the Louisiana Fair Housing Action Center on Monday, reacting to the news about the city’s new hire.
The organization pointed to the case of Destiny Toro, who testified at a 2019 council meeting that she was evicted to make room for Sonder-operated short-term rentals.
In an emailed statement, the organization’s director noted that an eviction moratorium, put in place during the first few months of the coronavirus crisis, was recently lifted, even though many New Orleans residents remain under- or unemployed due to mass business closures.
“New Orleans is about to enter an unprecedented eviction crisis, so it’s deeply concerning that the city is putting people like Peter Bowen–who profited off of the evictions of our residents to make way for wealthy tourists–in charge of regulatory and policy reform,” Cashuana Hill, executive director of the Louisiana Fair Housing Action Center, said in an emailed statement.
While Bowen’s past work has caused concern among housing advocates, he will likely have a much bigger impact on New Orleans city government as he builds the brand new Office of Business and External Services, or OBES. According to a presentation that the administration provided to The Lens, Bowen will be overseeing 233 employees and a budget of $20.8 million.
OBES
When Dyer had the job, he was responsible for the Department of Safety and Permits, Office of Code Enforcement, the City Planning Commission, the Historic District Landmark Commission and the Vieux Carre Commission, according to the presentation.
Bowen will retain authority over those departments, but the city will also add two more departments to his “portfolio” — the Office of Economic Development and the Real Estate and Records Division of the Department of Property Management, which is responsible for buying, selling and leasing city-owned land.
The presentation also notes that “opportunities for future expansion” include the Office of Cultural Economy, the Office of Supplier Diversity and the Office of Workforce Development.
“We’re really reimagining what our entitlement and regulatory agencies would do and how they would align,” Montaño told The Lens. “So something I really wanted to establish is something called the Office of Business and External Services. And that is going to umbrella all those regulatory agencies. But I really wanted to bring in and blend my economic development workforce departments into that realm and that world and really align those needs.”
And it appears the city has contemplated an even larger expansion of OBES. In January, the New Orleans Office of Inspector General issued a report finding that the city was over-collecting fees and mismanaging the city’s traffic camera ticketing program. In a response attached to the report, the city said that the creation of OBES would improve oversight of the program.
“Because of the heavy public access through the adjudicator and hearing processes, [the traffic camera safety program] is categorized as a customer-facing function,” said the response written by Dyer. “Considerations are underway for the best way to centralize external services, such as [the traffic camera safety program], within the OBES portfolio.”
One of Bowen’s most immediate tasks will be to rebuild the city’s scandal-plagued Department of Safety and Permits, which handles everything from alcohol permits to business licenses to short-term rentals to construction permits.
A federal corruption investigation into the department led to the indictment of a former building inspector, who later pleaded guilty to taking $65,000 in bribes in exchange. The investigation also led the city to suspend two other department employees, including the city’s top building inspector. The city later suspended another two inspectors after it was revealed that they had falsified inspections at the Hard Rock construction site, which collapsed in October 2019, killing three men.
And in March, shortly before the onset of the coronavirus crisis, Montaño demoted the department’s then-director Zachary Smith and announced a department-wide shakeup.
“We are starting anew,” Montaño told WWL-TV in March. “This is a complete overhaul of the organization from almost top to bottom.”
Montaño told The Lens that when the pandemic initially hit, he was unsure if the city would still be able to create OBES, given projections of major budget shortfalls. But ultimately, he said that the pandemic makes the new office all the more necessary as the city tries to climb out of a recession.
“I had to reevaluate whether this is really going to be a thing,” he said. “But it’s the time, now, that you need it the most because of the importance of this recovery period.”
In the job posting for Bowen’s new position, the city says the job pays “up to $175,000.” Montano said the only new funding that will be appropriated to the office is “some capital money to reorganize some of the office space” at Orleans Tower. Aside from that, the new office will have to rely on existing funding within the offices Bowen manages, he said.
Mixing economic development with regulation
Breonne DeDecker, program manager at Jane Place Sustainable Neighborhood Initiative, pointed out that Bowen lobbied against some land use regulations he’ll now be tasked with enforcing. In particular, he fought against a 25 percent cap on short-term rentals in any one large commercial building, arguing that it would stymie economic development and revitalization.
“Peter Bowen spent years undermining the City’s attempt to regulate short term rentals as the face of Sonder,” said a statement from DeDecker. “At Sonder, Bowen’s job was to convert as many apartments as possible into hotel rooms. … We are very concerned to see someone who worked to put the profits of corporations over the needs of residents in this role.”
The Lens asked Montaño about whether he held any concerns about blending economic development initiatives with the enforcement of land use regulations, some of which are aimed at restraining business development to protect resident livability.
“It’s a fair question and I’ve contemplated it,” he said. “The reason why I think they are important to have together is that they can learn from each other in a lot of aspects. The one thing you don’t want to have in growth and expansion of a city and opportunity is a complete black and white perspective.”
Montaño said that the new office will not seek to loosen enforcement of city regulations. Rather, it will help businesses navigate complex regulations and salvage their plans if they clash with restrictions, he said.
“Instead of someone saying no immediately, it’s someone saying, ‘Let’s find a way to accomplish what you’re trying to accomplish and still stay within our rules and guidelines, not skirt the system, but let’s get creative on how we can help you succeed. Because you succeeding is us succeeding.’ “
He said that when he references “businesses,” he is also talking about neighborhoods and residents.
“I really want to be thoughtful on the term business, because we were worried that there may be criticism that we only are thinking of businesses. I say business as a very global perspective where neighborhoods are businesses in my mind. People that have never been through this process and want to expand their gate, those individuals, those customers are businesses. So it’s not just ‘hey let’s help big business.’”
The new office, and the departments that fall under its umbrella, will be located in Orleans Tower, on Poydras Street across from City Hall. Out of the seven departments being placed under OBES, only the Department of Code Enforcement and the Office of Economic Development are currently in that building. The rest will be transferred from their current locations in City Hall. The Office of Community Development and the Civil Service Commission, which are currently located in Orleans Tower, will swap places with the OBES departments and be moved into City Hall, according to the presentation.
The presentation appears to justify the move on the basis that City Hall presents a poor image to residents and businesses. It included anonymous employee survey responses in which City Hall employees criticize the poor condition of the building, saying it’s “embarrassing” when vendors have to visit the building.
As for Bowen’s past at Sonder, Montaño said that he spoke to Bowen in the interview specifically about how his former lobbying would affect his position. He said that the administration would be “swift to act” if Bowen’s past interests started “bleeding” into his current job.
“I think everyone’s resume has something on there that shows some distaste to some group,” he said. “He did have a history of working in a world that I understand can be controversial. STRs, you love them or you hate them.”
Montaño said that he was more interested in his work ethic and ideas.
“Probably the thing that I’m most excited about is Peter’s work ethic,” he said. “I need someone who is willing to work 26 hours a day to ensure that these initiatives are moved forward. Someone who never turns off their phone and will put their heart and soul into this.”
The above article originally appeared in The Lens on its website (www.thelensnola.org). The Louisiana Weekly enjoys a partnership with The Lens.
This article originally published in the August 3, 2020 print edition of The Louisiana Weekly newspaper.
