New Orleans City Planning needs to keep the city in Mind

Few things seem more antithetical to the Big Easy than forcing neighbors on the same block to compete with one another for income, but if the City of New Orleans Planning Commission (CPC) has its way, it might soon become a reality for more than a fifth of New Orleans short-term rental (STR) owners.

New Orleans is one of the U.S.’s most popular tourist destinations, attracting over 17 million visitors per year – over three times the entire population of Louisiana. Many visitors experience the charm of the city by staying in residential neighborhoods through short-term rentals hosted by locals.

But the CPC has decided to propose new restrictions on short-term rentals that would upend a system that has brought more than $110 million in earnings to New Orleans homeowners in 2021, tossing the STR regulatory process into chaos and likely hurting small-time hosts the most.

The New Orleans City Council should not be punishing New Orleanians for wanting to share their home or make some extra income on the side — they should instead focus their efforts on consistent and fair policies that look out for small STR operators.

One of the biggest issues with the CPC’s proposal is that its recommendation would only allow a single short term rental unit per side of a city street, which would reduce the total number of rentals by 23 percent. That’s one out of every five New Orleans hosts who would lose out.

Even worse, the CPC would use an annual lottery system to grant STR permits, meaning that even if an owner can rent out space this year, that may not be the case next year.

While the CPC claims its goal is to stop out-of-state investors, in reality, these changes would hurt New Orleanians just trying to make ends meet. According to Airbnb, the vast majority of New Orleans hosts share only one home, and more than half of hosts (58%) say the money they earn on the platform helps them cover increasing costs of living. Many New Orleans residents rent their space on the side while pursuing a career as a musician, artist, or even while working to get another business off the ground. All of these residents stand to lose if the CPC and City Council decide to crack down on tourism.

But the effects of the new regulations won’t just affect owners trying to make ends meet—they’ll hurt New Orleans as a whole. Tourism is its largest source of employment and revenue, contributing over $10 billion to the local economy every year. Going after the tourism industry and short-term rentals directly hurts local homeowners, especially as New Orleans continues to recover from COVID-19 and its catastrophic effects. In fact, residents have called the impacts of COVID-19 even worse than Hurricane Katrina, and the city has struggled to rebound since. The blow to the hospitality industry alone led to over a $75 million drop in revenue.

Short-term rentals helped soften the blow, and have even helped keep people in their homes. Forty six percent of New Orleans hosts in that same survey said that the money they’ve earned by renting out space on Airbnb helped them stay in their home, and 31 percent said that renting out space has helped them avoid eviction or foreclosure.

Communities can and should have sensible regulations around short-term rentals, but they have to be made with local homeowners in mind. The CPC should focus on proposing regulations that are stable and wouldn’t leave the fate of residential STRs to be decided on a random year-to-year basis that pits one neighbor against another.

– Adam Kovacevich

This article originally published in the April 3, 2023 print edition of The Louisiana Weekly newspaper.