New Orleans needs commonsense regulations on short-term rentals

Posted on: October 19 2016

By  The Editorial Board, | The Times-Picayune

The argument over short-term rentals in New Orleans pits the rights of the individual against the well-being of the city. Homeowners want liberty to do what they wish with their properties, including renting their homes out to the city's visitors. New Orleans residents just want to preserve New Orleans, that is, keep their relationships with neighbors who ask after their mamas, say "Who dat?" and mispronounce the names of the muses.

Some homeowners see short-term rentals as a way to offset the rising cost of living in the city. Other residents believe the phenomenon of short-term rentals is helping price them out of the city they love.

So what should the New Orleans City Council do when it convenes Thursday morning and considers a report from the City Planning Commission to regulate short-term rentals? As of Monday afternoon, not even Mayor Mitch Landrieu could give a firm answer. His administration has searched the United States and Europe for best practices, but "have not found a city getting this exactly right." Because there aren't any perfect regulations out there, the mayor said, "we're trying to do everything we can to get it right."

Getting it right will be hard, but leaving things as they are is unacceptable.

While the City Council is now confronted specifically with an unregulated short-term rental market, the more general problem is that New Orleans is experiencing the same disruption that is affecting virtually every business in America. What happens when ride-sharing services challenge the taxi-cab industry, when food trucks invade the turf of brick-and-mortar restaurants, when customers in a city with a cable TV monopoly cry out for internet protocol television? How does the city embrace innovators without being unfair to businesses that have adhered to the old set of rules?

How does a nearly 300-year-old city adapt to the digital age? 

Though the short-term rental issue has been discussed at length, the specifics of what the City Council will be discussing Thursday are unclear. In a Monday afternoon meeting with | The Times-Picayune, Mayor Landrieu indicated that the proposed regulations were being drafted.

Regulations are crucial. Not even the most enthusiastic supporters of short-term rentals want a free-for-all where entire residential neighborhoods are converted into virtual hotel districts. Nor is it possible, the mayor said, to enforce a blanket prohibition. With the obvious exception of hotels, motels and bed-and-breakfasts, short-term rentals are already illegal, and, yet, websites such as Airbnb and HomeAway are openly attracting visitors to New Orleans. So there has to be a middle ground where a limited number of short-term rentals can operate without altering the character of the city's neighborhoods.

Hoteliers rightly complain that they're required to add a 13 percent tax to their guests' bills while those renting their homes short-term do not. Mayor Landrieu indicated support for that argument when he said the new regulations should generate enough revenue for the enforcement of those regulations. Enforcement is critical. There's no point establishing regulations that residents can ignore with impunity.

It's important that the City Council establish an application process that's transparent and above board and decide if those already operating short-term rentals should be given first-consideration when applying. Maximum compliance with reasonable regulations should be the council's goal.

Ryan Berni, the city's deputy mayor of external affairs, said the cities with better short-term rental regulations – he cited Chicago, Philadelphia and Seattle – have had the cooperation of short-term-rental websites. If the city required those running short-term rentals to register, and the websites only agreed to list properly registered homes, then that would hamper the ability of non-registered short-term rentals to attract guests.

Mr. Berni said that the mayor's administration is definitely opposed to "full-time, whole-home, year-round" rentals; that is, houses that serve as nonstop turnstiles for tourists. Restricting the number of days per year that an entire home can be rented should strike the right balance between property rights and cultural preservation. 

This is a uniquely tough issue for the City Council to tackle. There are people of good will on all sides with valid concerns about what's happening now and what could happen in the future. But this is not a time for the City Council to delay and ponder. No solution will be perfect. The rule of unintended consequences will be in full effect. Modifications will be required. But the City Council must act now, and prove to its residents that it is up to the challenge of balancing preservation and progress in an age of disruption.