On Short Term Rentals and City Planning Commission: Interview with Jeffrey Goodman

[ Audio: 54min ]

A short term rental is defined as renting a space for less than 30 days. Legal hotels are commercial enterprises, Bed and Breakfasts are a separate designation whose spacing is controlled. In the last few years the proliferation of online sites that promote short term rentals, such as AirBNB, has led to a citywide crisis. Since these rentals are not legal, they are not following the same safety rules, they are not following zoning rules, and they are not paying taxes.

Further, neighborhoods are experiencing frustration when unexpected tourists are occupying their streets. Someone who is renting all year round in New Orleans has different priorities than a person who rents their place to a bachelor party every weekend. The online listing sites take no liability or responsibility for complaints and conflicts. The sites will not share their data with city officials. Further, they have creative defenses when sued for why they cannot enforce the law on those who use their site.

This is a global issue: online listing sites are worth a lot of money. AirBNB for example is valued higher than Marriott. And cities everywhere are struggling with how to manage the effect on housing, with limited access to the companies’ data. In Barcelona city officials say if you’re caught renting your home as a short term rental, then they will take the apartment and rent it as an affordable housing unit. In Paris a squad does investigate and bust short term rentals. In Austin, Texas, the city council hosting an emergency meeting when short term rentals jeopardized their historic district. In San Francisco officials said it is a crime both to rent and to list an un-permitted rental, and AirBNB sued for First Amendment Rights as a “content” provider, rather than a commercial entity.

New Orleans in particular is experiencing a housing crisis. While people are spending 40% more on housing than before Hurricane Katrina, they are not making 40% more income. The city needs more than 3000 affordable units of housing in the next years, to help people find places to live. Based on what data is available from online listing sites and anecdotal evidence, short term rentals do affect the availability of housing.

The classic New Orleans debate of locals versus tourists is central in the short term rental problem. If we make it very difficult for the people who live here, then what are we selling in the tourism industry? In prime neighborhoods like French Quarter an apartment may be bought initially as an investment to be used for short term rentals. In Marigny there are a lot of homeowners, and traditionally apartment rental opportunities rarely come up. AirBNB further exacerbates the rental shortage there. Given the choice of renting an apartment for $1000 a month versus a week, the decision is clear.

In response, the City Planning Commission staff came up with a 180-page report on short term rentals. It includes four different permit classes; the first is a permit that allows for 30 days rental per year, the second is an accessory permit, which includes a bedroom or apartment in your own home unit, the third is for a full time, full home rental, then the last is a commercial permit. The commercial permit is geared toward big CBD, Midcity and Bywater developments, such as the Midcity-based complex planned by Sidney Torres, which is likely to contain many short term rental units.

The original report had not recommended full time, full home rentals, and it had not included such a permit category, but after review by the City’s economic development committee and Mayor, the City Planning Commission were given another chance to edit the report, in order to specifically include the full home, full time rentals. The Mayor is sending the message either of support of full time, full home short term rentals or that there needs to be greater study of the phenomenon. Mitch Landrieu’s hopes for the New Orleans Tricentennial in 2018 -to increase tourism- are suspect in his attitude toward short term housing regulation.

Stakeholders in the issue include neighborhood groups and residents, who are passionate about the issue, tourism-based industry, and a small group that wants to legalize the full time, full home rentals. This last group is divided between people who want their single unit legalized, and those people renting out thirty plus properties in residential neighborhoods.

Racial disparities in short term rentals mirror those of the housing industry. Brown and black renters are rejected more often from AirBNB listings than white-appearing people, and they report neighbors call police for suspicious behavior. And white people who rent on these online listing sites make more money for similar units. If Marriott displayed this kind of racial bias, they would be held accountable. The implications of this racial inequity in New Orleans, which brings its own racial discrimination to housing, includes: people who are profiting off of short term rentals are often not those who need the extra income, people who could benefit from offering short term rentals are less able to.

The dialogue has brought up renter’s rights. The city and state have notoriously weak tenant’s rights, and tenants have limited ability control their living situation. Proposals about landlord registration and safety inspection are a way to improve the stock of housing.