New Orleans City Council temporarily bans several short-term rentals

The New Orleans City Council has voted to suspend new short-term rental permits for whole-home rentals while it takes another look at the current law, which was passed in 2016 and went into effect last year.

The decision was made at the council’s first full meeting with five new members who were voted in during the last election.

The City Council passed a motion that suspends the issuance of new “temporary” short–term rental licenses for nine months, or until the council passes new rules. The temporary type of license is required for homeowners who want to rent out their entire home for up to 90 days a year.

Those who already hold temporary licenses may continue to operate until their permits expire, but they will not be allowed to renew their permits during the nine-month moratorium. The ban also applies to permits that have been applied for but not yet granted. About 870 applications filed in May have yet to be processed. Those who want to apply for licenses during the ban may appeal to the City Planning Commission and City Council.

The permit ban applies to a new “interim zoning district,” created by the council, that includes most of the city’s historic neighborhoods and the Central Business District, where most of the short-term rentals in the city are located. Short-term rentals are already completely banned in the French Quarter.

A total of 4,320 New Orleans short-term rentals are currently listed on sites such as Airbnb, VRBO, and HomeAway. Rentals with temporary licenses make up more than half of all licensed short-term rentals in New Orleans. The temporary licenses now in effect for approximately 1,160 of the 2,228 short-term rentals in the city will expire before the end of the year.

The council also made a change for short-term rental licenses in commercial zones. These will continue to be issued and renewed, except for units on the first floor of multistory buildings that allow residential use.

Other types of short-term rentals in which a homeowner rents out part of a home or half of a duplex while living on the property are not affected by the permit ban.

Along with the short-term rental permit moratorium, the City Council directed the City Planning Commission to expand a study on the effect of short-term rentals. The study is due September 21

The new order will add to a study that has been in the works since earlier this year to "take a closer look at unintended second effects" of short-term rentals as well as include more information on how other cities are regulating short-term rentals. The Planning Commission was directed to take a look at four cities in particular: Charleston, South Carolina; Nashville, Tennessee; Austin, Texas; and Savannah, Georgia.

Part of New Orleans’ current short-term rental rules includes an obligation for hosts to collect lodging taxes from guests and pass them on to the government. New Orleans hosts must collect a 4 percent Hotel-Motel Sales Tax; a Hotel Occupancy Privilege Tax of 50 cents per night; and a Neighborhood Housing Improvement Fund Fee of $1 per night. Hosts must also collect a 5 percent state sales tax on bookings.

New Orleans has collected about $6 million in taxes and fees from Airbnb since regulations took effect in April 2017. Airbnb is the only short-term rental platform that collects New Orleans lodging taxes on behalf of its hosts. It collects both the state and city lodging taxes for hosts listing on its platform.

Short-term rental operators in New Orleans who list their properties with other platforms, such as VRBO or HomeAway, must collect both state and city taxes themselves and remit them separately to the correct agency. MyLodgeTax can help ease the lodging tax compliance burden for short-term rental hosts in New Orleans.