What the City Planning Commission must decide about New Orleans short-term rentals

Posted on: August 8 2016

By Katherine Sayre, NOLA.com | The Times-Picayune

A proposal to legalize and monitor short-term rentals in New Orleans is expected to get a vote from the City Planning Commission on Tuesday (Aug. 9) after months of contentious debate and delayed action.

The question likely at the forefront of commissioners' minds: Should they allow year-round rentals of entire houses and condos without the owners living on site?

Renting out residences to visitors for less than 30 days -- or less than 60 days in the French Quarter -- is technically illegal in New Orleans, but even so, an estimated 5,000 short-term rentals in the city have been listed on websites such as Airbnb, VRBO and HomeAway.

In the city's months-long attempt to legalize and regulate the industry, the idea of allowing whole-house rentals managed by absent owners and managers has sparked the most controversy. Whole-house rentals also make up the majority of short-term listings.

Two leading New Orleans housing advocacy groups have come out in opposition to whole-house rentals since the last time the issue came before the commission in June.

The proposal creates four categories of short-term rentals to be regulated: principal residential (whole-house), accessory, temporary, and commercial.

Owners who live in their properties would be allowed to rent out up to two spare bedrooms -- or three bedrooms in the other half of a shotgun double -- in nearly every neighborhood in the city without special approval from the city. 

The prospect of owner-occupied rentals hasn't provoked as much controversy. Affordable housing advocates say the extra income could help homeowners pay for rising property and insurance costs. Others say the oversight of on-site owners keeps visitors from being disruptive to long-term residents.

Owners could also temporarily rent out an entire house or condo for up to 30 days in a year -- such as the popular tourism days around Jazz Fest and Mardi Gras -- without special approval. 

The proposal also considers a "commercial" category for owners to operate their rentals as a commercial business when located in mixed-use developments or commercial districts.

All four categories would require a license from the city's Department of Safety and Permits.

Back in January, the Planning Commission initially voted 5-2 against including whole-house rentals when deciding to move forward with legalization. But a whole-house policy was put back into consideration at the request of Mayor Mitch Landrieu.

Critics of whole-house rentals worry that converting long-term residences into vacation homes worsens the city's rent affordability crisis by taking long-term rentals off the market. They also say short-term rentals damage the character of neighborhoods by creating a revolving door of visitors who are not invested in the area's welfare.

Property owners would be required to get special permission for a whole-house rental -- called a "principal residential" -- through the city's conditional use permit process. Owner-occupied and temporary short-term rentals wouldn't require a conditional-use permit.

Eric Bay, president of Alliance for Neighborhood Prosperity, a pro-short-term rental group, said the conditional use process would require owners to get approval for a whole-house rental during a public hearing, in which any concerned neighbors could speak up. Owners would be required to pay up to $3,000 per year in fees if approved -- money that could fund the city's enforcement to root out bad landlords and hold property owners accountable, he said.

"We want the enforcement mechanism," Bay said. "We want the bad actors to go away."

The whole-house category would be restricted through a density limit, with no more than two rentals on a single side of a block. The rentals would also be limited to four per square in "historic core" neighborhoods, three per square in historic urban neighborhoods and two per square in suburban neighborhoods.

Bonnie Rabe, who owns the Grand Victorian Bed & Breakfast in the Garden District and leads the Professional Innkeepers Association of New Orleans, said because the density limit applies to only one category, the total number of short-term rentals on a single block could be unlimited.

Rabe said she hopes the planning commission votes Tuesday "instead of stalling indefinitely." 

"Our hope is that the City Planning Commission is going to stick with their original recommendation, which is not to allow whole-house rentals," Rabe said. "Whole-house rentals just violate every neighborhood rule and code of conduct."

The commission only makes recommendations to the City Council, which would have the final vote on any short-term rental system. 

The meeting begins at 1:30 p.m. at City Hall. Stay with NOLA.com for live updates.