The New Orleans City Council is working around a federal court ruling that struck down its short-term rental ordinance.
That law was designed to regulate the number of short-term rental units in the city and to prevent neighborhoods from becoming dominated by AirBNB and similar rental homes. The federal court said the law's distinction between homeowners with homestead exemption and those without violated the Constitution's commerce clause.
"The reason why we have to do it is because the court basically said we could not draw a distinction between properties that have a homestead exemption and properties that do not," city council vice president J. P. Morrell told WWL's Tommy Tucker. "The plaintiffs, who are largely out-of-state short-term rental owners, they basically have put us in the position of either freezing and not allowing renewals or just opening up short-term rentals for five months to the wild, wild west like back in the day when everybody could have one."
Now, council members are looking for ways to protect neighborhoods from being bought out by investment groups and to keep property values within the range of middle-class people who want to live in the New Orleans.
"The council is in the process of writing a new Air B&B law which will be out by March," Morrell said.
"When you have someone who's holding property--swaths of property, investment property--you're getting property tax, (but) you're getting it occasionally when it's rented, but you're not getting sustainable, everyday investment, and you're making it unaffordable for the average person, and I'm talking about even a middle-class person who wants to buy a house in the city to live here," Morrell added. "You have whole blocks in the Treme where no one lives there any more, and they're all short-term rentals. That's not good for any city."
Now, the council is pausing short-term rental expansion until it can draft and pass a new short-term rental law. How will current short-term license holders be impacted by this change?
"From now until March when the new laws come into effect, if you currently have a residential short-term rental, you can continue to operate it," Morrell said. "If it expires before March, you cannot renew it until we put the new laws in in March. There are no new permits being issued."
