New Orleans promises to get tougher on short-term rental rule breakers

New Orleans, Louisiana, is making plans to step up enforcement of the city’s short-term rental law in the face of public criticism. The city plans to increase the number of staff dedicated to short-term rentals from six to 23, doubling the number of inspectors and adding other positions. Staff also intends to start conducting inspections at night and on weekends, rather than just during the day.

The administration also aims to raise the number of short-term rental violation cases to 50 per month, up from last year’s average of one per month. And by September, it plans to start using software that allows the city to more easily identify illegal vacation rentals.

The city promises stiff punishment for egregious lawbreakers, including fines of up to $500 per violation, electricity cutoff, and license revocation.

Mayor LaToya Cantrell's administration has come under fire for allowing illegal rentals to spread throughout the city without much fear of repercussion. In April, the City Council froze part of the city’s safety and permits budget in an attempt to motivate the administration to take action on short-term rentals and other issues. In June, City Council Budget Committee Chairman Joe Giarrusso filed ordinances that would restore the safety and permits budget in return for the city’s promised enforcement steps.

New Orleans’ short-term rental ordinance, which went into effect in 2019, requires all short-term rentals to be licensed. Vacation rental hosts in residential neighborhoods must have a “homestead exemption,” meaning that they live there and claim the property as their primary residence. Vacation rentals are prohibited in residential areas of the Garden District as well as in most of the French Quarter, and they may take up no more than 25% of commercial or mixed-use property.

The City Council has also outlawed vacation rentals in newly permitted fourplexes. Last year, the city had approved a zoning change allowing more small multifamily buildings throughout the city, part of an effort to create more affordable housing. Originally, each new fourplex was permitted to include one short-term rental, but the council unanimously reversed that in May.

New Orleans short-term rental hosts are required to collect lodging taxes that include Louisiana state sales tax and several city taxes, including sales tax, a short-term rental occupancy fee, occupancy privilege tax, and a short-term rental equalization occupancy tax.

Vacation rental operators must register and file lodging tax returns with city and state tax authorities. Airbnb collects both city and state taxes on behalf of its hosts. Vrbo also collects city taxes for New Orleans hosts, but does not collect Louisiana state taxes. Hosts are required to collect and pay taxes that are not collected by their platform, and they must register and file lodging tax returns even if taxes are being collected on their behalf.

MyLodgeTax can help short-term rental hosts in New Orleans simplify and automate lodging tax compliance. See our Louisiana Vacation Rental Tax Guide for more on short-term rental taxes in the state. If you have tax questions related to New Orleans properties, drop us a line and we’ll get back to you with answers.