New Orleans City Council passes stricter Airbnb rules

The New Orleans City Council has passed new rules that place stricter limits on short-term rentals in residential neighborhoods.

The new rules require short-term rental owners in residential neighborhoods to live in their rental properties. The former “temporary” short-term rental license that allowed whole-home rentals in residential neighborhoods was replaced with a “residential” license that requires a valid homestead exemption.

The new rules allow owners to operate up to three additional short-term rental units on the property where they live. These types of large rental properties (triplexes and fourplexes) are limited to only one on each side of a street. Short-term rental properties may not host more than 12 guests at a time.

Short-term rentals will remain illegal in most of the French Quarter and the Garden District. In the Historic Marigny/Tremé/Bywater districts, short-term rentals may be allowed on a case-by-case basis, requiring approval from the council.

The council also created a “commercial” short-term rental license with different variations depending on how many units the operator would be renting out.

It will take some time before the new rules could go into effect, with more public comment and a final council vote within a few months. The new rules must be formally adopted within 90 days to become law.

The council is still waiting for the results of a study that will recommend how to regulate short-term rentals in commercial areas such as the Central Business District and Warehouse District.

The current rules were passed in 2016. Last year, the City Council voted to suspend new short-term rental permits for whole-home rentals while it studied the issue. A short-term rental hosts’ group recently sued the council over the moratorium, stating that it prevented short-term rental operators from renewing legally obtained short-term rental permits.

The city’s current short-term rental rules include an obligation for hosts to collect lodging taxes from guests, including hotel-motel sales tax, hotel occupancy privilege tax, and a neighborhood housing improvement fund fee. Hosts must also collect Louisiana state sales tax on bookings.

If a bill recently passed by the state House of Representatives becomes law and is approved by New Orleans voters, New Orleans short-term rentals will also be subject to a city occupancy tax.

Airbnb collects both the state and city taxes for hosts listing on its platform. VRBO also started collecting city taxes for New Orleans hosts on April 1, but doesn’t collect state sales tax.

Hosts must collect lodging taxes directly from guests if their platform doesn’t collect it for them, and they’re required to register and file lodging tax returns with the city even if tax is being collected for them.

MyLodgeTax can help short-term rental hosts in New Orleans comply with all lodging tax requirements. See our Louisiana Vacation Rental Guide for more on short-term rental taxes in the state.