City Planning Commission to consider short-term rentals

25th January 2016   ·   0 Comments

By Della Hasselle
Contributing Writer

New Orleanians wanting to rent out their properties on a short-term basis may soon be able to do so legally, if New Orleans City Council adopts new recommendations released last Tuesday by the City Planning Commission.

After six months of studying the impact of Air BnB and other illegal short-term that “proliferate” certain areas of New Orleans, the City Planning Commission is ready to consider ways to “prioritize” enforcement of short-term rental bans, placing no neighborhood prohibitions on the practice and instead regulating by type of rental.

City planners also recommend more stringent enforcement of the new rules, should they be adopted, by requiring every short-term rental operator to get a license, provide liability insurance and pay all “applicable taxes and fees.”

Up until now, enforcement of the rules has been lax, with between 2,400 to 4,000 short-term listings in New Orleans, the “vast majority” of which are operating without proper approvals or in zoning categories where that rental is prohibited, city planners found.

And, despite the illegality of most of these rentals, demand remains high, with most concentrated in historic core neighborhoods. About 70 percent are whole unit rentals with an average nightly rental rate of $250, and only about 230 violations were reported over the past three years.

Those findings were released last Tuesday in a new report called the “Short Term Rental Study,” ordered by the New Orleans City Council over the summer. The commission on Jan. 26 will consider the months-long investigation, and pass the issue back to the council on Feb. 1.

Under the study, planning staff found that even if an operator of a short-term rental wanted to “follow the rules” by getting a license, and paying fees and taxes, the owner couldn’t because of the way current regulations work.

“Under the current regulations, short term rentals are allowed in few districts and there is no licensing structure to regulate [them],” the report reads. “Having a structure in place is important to regulate short term rentals, to minimize the negative impacts on surrounding properties, and to facilitate enforcement on problem operators.”

Should the report’s recommendations pass, the stringency of rules governing the rentals would, in the future, be based on whether or not an operator was present, with those living on the property facing fewer restrictions than those operating the temporary rentals remotely.

Renters who aren’t present, however, could still obtain up to four permits a year for temporary short-term rentals, providing up to five bedrooms for up to 30 days at a time. The owners would have to get a conditional-use permit from the city, renewable every three years and costing about $1,000.

In non-residential districts, the property owners could rent out as many as eight bedrooms at a time.

The proposal is likely to ignite dissenters of the short-term rental market. As of now, the mostly illegal renters are impacting largely residential areas, opponents have complained, risking the character of the city’s neighborhoods.

Without a disclosure requirement from websites like Air BnB, the city could also have difficulty keeping track of the number of short-term rentals, or enforcing their licensing fees or regulations.

Under the proposed rules, already-crowded neighborhoods could become even more populated. The owner of a shotgun double who lives on site, for example, would be allowed to rent out his or her property all year round, without any caps on density in any neighborhood.

However, one off-street parking space would be required for every two rooms, which could reduce the number of qualifying properties, according to the planning staff.

Staff also proposed finding ways for the city to benefit financially, by imposing yearly licensing fees ranging from $50 to $500 a year for short-term rentals, depending on the type of license. Staff also suggests the city lobby Legislature to allow higher taxes on short-term rentals.

The study also calls for hiring three or four city employees to focus specifically on short-term rentals, at a cost of $175,000 to $300,000 a year, and creating a website that lists licensed short-term rentals and provides a way to report violations.

This article originally published in the January 25, 2016 print edition of The Louisiana Weekly newspaper.