In 2017, the New Orleans City Council began regulating STRs by requiring platforms like Airbnb to share operator data - and, for Airbnb exclusively, to contribute to affordable housing funds - and by requiring STR operators to obtain one of three City licenses. JPNSI assessed the implementation of the City’s STR regulatory measures a year after their adoption through data collected from the City’s publicly available permit database, reports on monthly usage from STR platforms, and scrapes of Airbnb listings available online through Inside Airbnb. JPNSI finds that the City’s approach to STR regulation accelerates gentrification and the displacement of residents by permitting the limitless removal of homes from the housing market for conversion into STRs and ignoring the inflation of overall housing costs to which STRs contribute.
Thousands of homes have been removed from the rental housing market, primarily in historically Black neighborhoods, to accommodate tourists and housing costs have increased as supply decreases and as sales prices factor in the potential return from renting to tourists.
Current Number of Licensed STRs in Operating in the City*
Current Number of Illegal STRs Operating in the City*
Number of Entire Homes Listed on Airbnb in 2015
Current Number of Entire Homes Listed on Airbnb*
*As of March 6th, 2018.
The Dominance of Whole-Home Rentals
Eighty-two percent of Airbnb listings are for whole-homes, single units of housing as opposed to accommodations within an operator’s residence, with the average of such listings being available 174 nights per year. Most Airbnb listings are exclusively used as vacation housing for tourists, as the units are off-market for over half of the year and, therefore, unavailable to residents.
Single Operators with Multiple Listings
Large-scale STR operators, many of whom are based outside of New Orleans, are essentially running scattered-site hotels. Just 11% of STR operators control nearly half of all permitted STRs in the city. Administrative flaws allow STR operators to register permits under different names and/or the names of employees, making it difficult for the City or independent researchers to track their footprint within the market.
The Oversaturation of STRs in Residential Neighborhoods
City Council has placed no limits on the number of rooms or homes per block that can be converted into full- or part-time STRs, leading to extreme concentrations of STRs in certain blocks, particularly in neighborhoods that are close to amenities that tourists want but residents need, such as access to public transportation, public parks and greenspace, and the restaurants and bars of the French Quarter that provide thousands of jobs for residents. Over the past two years, the geographic concentration of STRs has shifted away from neighborhoods more commonly associated with tourism (such as the French Quarter and the Marigny), towards the CBD and many working-class Black neighborhoods that are close to downtown, particularly the Seventh Ward, Treme, and Central City. STRs are capitalizing on and contributing to the displacement of Black communities, making it more difficult for families to remain in or return to their neighborhoods as more and more housing units are dedicated away from housing and towards tourist use, causing overall housing prices for both renters and homeowners in the neighborhood to rise.
The Inflation of Overall Housing Costs
The proliferation of whole-home rentals in residential and commercially-zoned neighborhoods is making it more difficult for families to return to or remain in their neighborhoods as more housing units are dedicated away from residents and towards tourist use, causing overall housing prices to rise. Rent has increased in the nine neighborhoods with the highest concentration of STRs, including rent increases of 30% for a two-bedroom unit in the Seventh Ward, a 27.95% increase in a two-bedroom in MidCity, and a 71.93% increase for a three-bedroom unit in Bywater.
The Prioritization of Tourists over Residents
The City’s STR policy offers property owners a high economic incentive to remove housing from the residential market in order to offer it to tourists who, attracted to the year-round festivals and other events calendar, will pay many times more per night than the resident laborers who provide services. The policy included measures that the City claimed would offset the impact of STRs by exacting $1.00 per night from Airbnb rentals for affordable housing development. Airbnb reported that between January 1 and September 30, 2017, only $230,000 in funding for affordable housing was generated through legal STRs - enough for one unit of housing to be produced.
Our STR Ordinance: Rest
Why does New Orleans need to reform its STR regulations?
The short-term rental policy that was ratified by City Council in 2016 prioritizes tourists over the New Orleanians who make our city run. The few restrictions it does include to protect residents have no teeth and are easily circumvented. Across the city, but especially in the historically Black neighborhoods that birthed many of our unique cultural traditions, housing costs for both renters and homeowners are soaring as short-term rentals decrease the supply and distort property values. Speculators and investors are threatening the future of our city. We need a new policy that protects our culture and puts New Orleans residents first.
The REST Ordinance Makes 4 Key Changes to STR Laws
Homestead Exemption Requirements for STRs
Restrict STR permits to residents with homestead exemptions and limit residents with homestead exemptions to one permit, only valid for the property they live in, allowing New Orleanians to rent out a bedroom or the other half of their double as a temporary or year-round STR. By ensuring that STRs are run by neighbors, and not investors, it slows displacement in our neighborhoods and ensures that all STRs are managed on-site by a member of the community who is accountable to the community.
Mandated Platform Accountability
Currently, STR platforms like Airbnb face no fines or penalities for listing and booking illegal STRs on their websites. We need to follow the lead of other cities that have won the right in federal court to require licenses for STR platforms, ensuring they share the responsibility of enforcement by deleting illegal listings and providing useable data to the City.
Increased Support for Affordable Housing Development
Increase funding to develop affordable housing by creating a $20/night fee on all STR transactions which will be dedicated to the Neighborhood Housing Improvement Fund (NHIF) for affordable housing development. The fee will double NHIF, bringing in an estimated $3 million dollars in year one. As property values rise in New Orleans, it becomes more and more expensive to develop affordable housing in the city. As real estate becomes pricier, the amount of subsidy required to make a homeownership unit or a rental unit affordable for the average New Orleans family increases. This increase in subsidy need per unit, as well as the overall increase in need for affordable housing, is coming at a time when the amount of money available for affordable housing is decreasing. We need to increase our commitment to affordable housing to prevent further displacement and cultural erosion in New Orleans.
Zero Tolerance Against Discrimination
There have been numerous reports that STR platforms undermine public accomodation laws. New Orleans can be the first city to create a zero-tolerance policy against discrimination; any STR host found to be discriminating against guests based on age, color, creed, gender identification, gender or sex, marital status, national origin/ancestry, physical condition/disability, race, religion, or sexual orientation will have their STR permit revoked and will be permanently banned from getting another permit.
Read the full ordinance here .
Commercial STRs in the Central Business District should be treated differently.
Large out-of-state corporations have scooped up hundreds of apartments in the CBD and converted them into full-time STRs. JPNSI, the Greater New Orleans Fair Housing Action Center, and HousingNOLA recommend that STR operators in the CBD be required to also provide affordable housing. This could be done one of two ways:
- One-to-One Match with a Cap: Allow STR permits up to a cap of a certain percentage of the building’s total units (15%, 20%, 30%), but only if the building also holds a matching number of units affordable at 60% AMI.
- One-to-Two Match with no Cap: Allow an unlimited number of STR permits per building, but only if the building also provides two units of housing affordable at 60% AMI for every one STR permit.
Tying commercial STR permits to affordable housing would bring hundreds of apartments online at rates that would be affordable to hospitality workers, teachers, nurses, first responders, and many others. This would create opportunities for New Orleanians to live close to all of the amenities clustered in the CBD and French Quarter, from jobs to transportation to healthcare to recreational activities. Residents deserve to partake in all New Orleans has to offer- we should not turn over the entire CBD to corporations catering to tourists who can afford to pay top dollar.
The following organizations and businesses have joined the REST Coalition and support the ordinance
Greater New Orleans Fair Housing Action Center, Step Up Louisiana, RIDE New Orleans, the Anti-Gentrification Action Group, Puentes, Central City Renaissance Alliance, Crescent City Community Land Trust, Tulane/Canal Neighborhood Development Corporation, First Grace Community Alliance/Hagar's House, VOTE, Broad Community Connections, Women with a Vision, 12 Mile Limit, Dashing Cycles
Interested in Joining the Coalition? Please Contact JPNSI here.