N.O. City Council begins tweaking short-term rental rules

Process will take months

N.O. City Council begins tweaking short-term rental rules

NEW ORLEANS (WVUE) - With a series of unanimous votes, the New Orleans City Council took the first steps toward overhauling the city’s short-term rental policies.

Council members said short-term rentals have changed the character of some areas of the city.

"Neighborhoods are for neighbors. It is disheartening to walk the streets of the communities and see blocks that once teemed with families now sitting silent, waiting for the weekend when the next round of tourists come rolling through,” said Councilwoman Kristin Gisleson Palmer, whose district includes the French Quarter.

People for and against short-term rentals addressed council members during Thursday’s meeting.

"We’re afraid that with short-term housing we’re going to have elements that come into the community that will not appreciate what we have,” Marilyn DeGrasse said.

"I was a bed-and-breakfast [operator] for a while. It’s really a significant change of an operation. Now I do it as a short-term rental, so obviously I would like to continue doing short-term rentals,” Cynthia Riggs said.

One of the measures that won council approval creates two types of short-term rental permits - residential and commercial. To get a residential permit the property owner would need a homestead exemption and an on-site host.

"Requiring the homestead exemption also limits whole-home rental, which has become a burden on many of our historic neighborhoods,” Palmer said.

Another measure calls for establishing guidelines for increasing short-term rental fees and fines. It is a move which aims to help the city create more affordable housing.

“Numerous studies indicate that short-term rentals have some impact on the housing market, yet, there is only a one dollar per night fee that is allocated to the Neighborhood Housing Improvement Fund to expand affordable housing,” City Council Vice President Helena Moreno said. “Last year, that resulted in $482,000 generated from short-term rentals. I hate to say it, but that’s actually a pitiful amount of money being generated to help promote and develop affordable housing.”

And finally, the council supported a motion to have an economic development incentive study conducted.

"Which would, in essence, allow for district council members to determine where in their districts whole-home rentals could be proliferated by more than just one,” Councilman Jay Banks said.

“Do we really need a 16th century solution to a 21st century issue,” asked Eric Bay, a supporter of short-term rentals.

Some business groups and residents said any changes should include a “grandfather” provision.

"We need to maintain the opportunity for all previously licensed, legal operators and create new policy to determine the fate of future applicants,” Bay stated.

Council members said changes to the short-term rental policies would not be finalized for months.

"Any action taken today will not be the final word because short-term rentals are in part, a land-use issue. Changing our policies requires amending the Comprehensive Zoning Ordinance,” Palmer said.

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