NEW ORLEANS — Pending litigation and an updated law for short-term rental properties across the city of New Orleans have been in limbo for months. A federal judge has now stepped up and is urging city leaders to take action before courts do.
Right now, the deadline in place is March 31st, but if the council does not come up with new guidelines for short-term rental owners, a judge has warned the court will step in with its own regulations.
This started back in 2019 when the council had to revise the short-term rental laws after a lawsuit from out-of-state property owners. A ruling came back that the homestead exemption put in place, requiring rental operators to have that exemption violated the constitutional rights of operators from outside Louisiana. In October the council unanimously decided to put a ban on short-term rentals in the meantime while they sort things out.
Recently, in a memo released by the New Orleans Office of Inspector General Edward Michel, to Mayor Latoya Cantrell and Tammie Jackson, the Director of the Department of Safety and Permits, Michel said, "The Office of Inspector General's (OIG) concern with the City's ongoing short-term rental issues is primarily focused on the City's lack of enforcement of its own short-term rental regulations."
The letter detailed insight from an OIG auditor who found 12 properties operating illegally. With the city's $500 fine each day a property is out of compliance, they totaled over half a million dollars in fines just for those 12 properties. It is believed that there are hundreds of properties not in compliance across the city.
"Effective enforcement by the City will also deter homeowners from operating illegal short-term rentals," Michel said in the letter. "Ongoing litigation regarding short-term rentals does not preclude the City from levying fines for those properties operating illegally with an expired permit or no permit at all."
In a statement from Ashely Becnel, the Chief Zoning Official with the Department of Safety and Permits, Becnel said her team identified illegal short-term rental properties almost every day. She reports that the STR Administration has a team of 9 inspectors who investigate complaints received about illegal STRs daily.
"It's important to regulate STRs in order to preserve the city's permanent housing stock, balance the economic opportunity created by short-term rentals with the need to maintain a supply of long-term rental housing stock available at a range of prices, reduce any indirect negative effects on the availability of affordable housing that results from the dedication of long term housing stock to short-term rental use, create a level playing field for all parties engaged in the business of providing lodging, ensure the sufficient collection of tax revenue, mitigate the disruptive effects that unmonitored short-term rentals can have on neighborhoods, and protect the livability and quality of life of the city's residential neighborhoods," Becnel said.
Illegal rentals are identified across the city, but Becnel says they find many in the French Quarter and Treme.
At this time, it is unclear when the council would come to a final decision on short-term rental laws in the city, but previous reports reflect a commitment so it's just a matter of when.