Vote on short-term rental restrictions delayed until next month

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A preliminary City Council vote on a proposal to add new restrictions to the city’s short-term rental laws, originally scheduled for consideration this week, is being delayed until January.

“In order to pass a robust legislation to preserve our neighborhoods, we need open conversations and strong civil engagement. In light of the holiday season when everyone is focused on family, I would like to defer the vote on this issue,” Councilwoman Kristin Palmer, who announced the plan last week, said in an emailed statement Monday night. “We will continue to encourage feedback and public input during this time, and in the New Year, will move forward with legislation that puts the neighborhoods first.”

The proposal, which Palmer announced last week, seeks to eliminate so-called “whole home” rentals in residentially zoned areas by limiting them to owner-occupied houses and requiring that hosts be on site while guests are staying on their properties.

Under current rules, passed in 2016 with former Mayor Mitch Landrieu’s backing, property owners and long-term tenants can obtain “temporary” short-term rental licenses, allowing them to rent out full homes in residential neighborhoods for up to 90 days per year. Temporary licenses have become the most popular of three short-term rental licenses offered. As of Tuesday morning, temporary licenses made up 37 percent of about 3,700 active short-term rental licenses in the city. Prior to the enactment of a partial freeze on the 90-day licenses, they made up about 50 percent of all issued licenses.

Critics of the city’s laws said the residential whole-home licenses took full houses off the city’s long-term rental market, further squeezing residents in a city that has seen large increases in rent over the past decade. Even if temporary license holders adhered to the annual cap, and some did not, they are still allowed to rent their properties to tourists for a full quarter — or nearly every weekend night — of the year

Palmer’s proposal would eliminate temporary licenses and restrict residential licenses to homeowners with homestead exemptions. It would limit them to three licenses per property, allowing the owner of a four-plex to license three units. It would also require them to be home while tourists are using their properties.

The plan is based in part on recommendations from the City Planning Commission, which released a study this fall calling for tighter curbs on the short-term rental market in the city. Planners, however, recommended limiting residential licenses to one non-owner-occupied unit per property.

Palmer would also do away with the city’s “commercial” license, which allows  owners or managers to rent properties year-round in mixed-use or commercially zoned districts. Her plan replaces it with three different license categories.

“Commercial single unit” licenses would be for condos and houses in commercial and mixed use areas. Those, like the residential licenses, would require a homestead exemption.

“Commercial small scale” licenses would allow every residential unit in buildings with fewer than five residential units to be used as short-term rentals. The first floors of those buildings would, however, be reserved for commercial uses, like retail, unless they are already being used for residential units.

“Commercial large scale” licenses would be reserved for buildings with five or more residential units. That license would limit short-term rentals to 30 percent of dwellings in each building. And each short-term rental would have to be matched with an affordable long-term rental unit, though Palmer’s office did not define “affordable” last week when the councilwoman released her proposal. Again, the first floors of these building would be reserved for commerce.

If the motion passes next month, Palmer estimated that it will take another three or four months to implement the changes. The motion would send the proposed policies to the City Planning Commission for its consideration. Then, the City Planning Commission has to release a study, hold a public hearing, and vote on the study’s recommendations. Only after that would the Council be able to vote to codify the changes into the city’s Comprehensive Zoning Ordinance.

The commercial licenses are another departure from the City Planning Commission’s recommendations, which called for a complete ban in several low-intensity commercial and mixed-use districts and a 25 percent cap in buildings where they would be allowed.

A fact-sheet provided last week by Palmer’s office said that the council may consider “spacing restrictions,” such as a limit of one short-term rental per block, in mixed-use areas.

Even though it is, in some ways, less restrictive than planners’ recommendations, short-term rental platforms, including Airbnb and HomeAway criticized the so-called “Palmer ban” last week, saying it was crafted in secret and without enough input. The plan, a statement from Airbnb said, “would devastate New Orleanians who operate short-term rentals to support their families.”

As she announced the vote’s delay on Monday, Palmer defended the proposal as an attempt to protect the city’s neighborhoods.

“This motion is an opportunity to revise existing short-term rental regulations in a way that limits disruption to our neighborhoods and communities,” Palmer said in the statement.

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