Plan to legalize short-term rental market in New Orleans gains praise from supporters

A draft plan that would legalize and regulate the short-term rental market in New Orleans drew guarded praise Wednesday from supporters of the growing practice, which has taken off nationally through websites like Airbnb, and scorn from its opponents, who said proposed restrictions and enforcement would not be tight enough.

The plan comes amid continuing debate over whether residents should be allowed to convert bedrooms or whole homes into accommodations for visitors, a discussion fraught with broader questions about housing affordability, gentrification and private property rights.

The proposal released Tuesday evening by the City Planning Commission staff is likely to be the starting point for a renewed debate on the question at the City Council and the Legislature.

Councilwoman Stacy Head wants some kind of agreement on the city’s approach to regulating short-term rentals in time for the spring legislative session. That way the city can lobby for changes to state law that would allow it to receive significant revenue from the industry.

“It is not possible for short-term rentals to be eradicated because of the access to the Internet and direct communication between willing participants,” Head said. “We should be realistic, harness the revenues and allow them in certain places.”

Renting properties or rooms for less than 30 days — or 60 days in the French Quarter — is banned under existing city ordinances, with the exception of licensed hotels and bed-and-breakfasts. But those laws are rarely enforced.

The Planning Commission staff, drawing on analyses of AirBnB and other services, estimate that between 2,400 and 4,000 properties are being used as short-term rentals and that about 70 percent of those involve the rental of a full house or apartment. Enforcement is relatively lax; only 231 violations have been reported in the past three years.

The commission’s proposal outlines four types of short-term rentals that would be allowed, each of which would require residents to buy a permit from the city. Residents would be allowed to rent up to two bedrooms at the property where they live — or half of a double if they own both sides — to as many as three guests at a time. They would be required to remain on site during the rental.

A “temporary” designation aimed at those who would rent during major events would allow units of up to five bedrooms to be rented up to four times per year for a total of 30 days.

Property owners also would be able to apply for a conditional-use permit to use an entire unit in a residential area as a full-time, short-term rental. Only two to four of those would be allowed per square block, depending on the zoning of the area. In areas zoned commercial or mixed-use, whole units could be rented out without those restrictions.

The study also recommends bringing regulations on traditional bed-and-breakfasts in line with the new rules, though they would remain a separate category. It also suggests tighter enforcement that could cost between $175,000 and $300,000 a year.

Those restrictions, predictably, drew vastly different reactions from the two sides of the debate.

A spokesperson for Airbnb and attorneys for the Alliance for Neighborhood Prosperity, which represents about 115 New Orleans residents who rent out homes, apartments or rooms, characterized the proposal as a good start.

Jim Uschold, one of the lawyers for the group, argued for loosening some of the restrictions, including limits on how many rentals would be allowed per block. Doing so would increase the number of residents able to legally rent out properties, which in turn would increase city revenue, he said.

“We’re trying to figure out a way to get those higher rates, allowing more people to participate and then capping it and waiting for attrition to grind the numbers down if they’re too high,” he said.

But for Brian Luckett, a board member of Neighbors First for Bywater and a 20-year resident of the area, the plan already is too generous. In particular, he said he worried that allowing unlimited rentals in commercial districts could result in some of the condo developments proposed for the area turning almost entirely into vacation rentals.

One significant area where Head, who had tried to craft her own version of a new regulatory scheme last year, diverged from the Planning Commission was on the topic of the French Quarter. The city should completely ban short-term rentals in its historic core to preserve the neighborhood’s character, she said.

Short-term rental supporters, however, said doing so would only decrease the number of renters who would register with the city.

Follow Jeff Adelson on Twitter, @jadelson.

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