Residential homeowners and Short-Term Rental (STR) owners in New Orleans have been operating for six months under new regulations without any objection from the courts.
- Each STR operator can have one STR permit
- STR permits are limited to “natural persons” (not corporate entities)
- STR operators must live on the same lot as the STR unit
- An on-site innkeeper is required
- STR platforms (like Airbnb and Vrbo) can not post listings without a valid permit number
- STRs are awarded (one-STR-per-block basis) by a lottery system
- Two or more STR permits (per city square) may be issued with an approved special exemption
On Wednesday, September 27, the United States District Court for the Eastern District of Louisiana extended its prior temporary restraining order by continuing to enjoin the City from enforcing its Non-Commercial Short-Term Rental (NCSTR) laws. At the Federal Court hearing, Judge Ivan Lemelle spent over an hour questioning attorneys on both sides before ordering supplemental briefing, extending the TRO, and setting a new hearing date for November 2.
The ban on enforcement of the NCSTR laws will remain in place until then.
The ruling likely creates greater uncertainty in the City’s real estate market. The New Orleans City Council has already performed a first reading of an ordinance that would ban all NCSTR’s, and the co-authoring council members have indicated their intent to move forward with a vote on the proposed ordinance immediately. During Wednesday’s hearing, the Court took a dim view of that proposed ordinance, likening it to a child picking up his marbles and going home.
Various Council Members have publicly shared their observations:
“Cities across the country are struggling to grapple with predatory companies (like Airbnb and VRBO). Vulnerable New Orleans residents are struggle to find affordable housing…”
“We will not allow corporations to overtake our neighborhoods. The only choice left may be to ban non-commercial STRs. This is not where we wanted to be, the blame lies solely on those pursuing to strike regulations…”
“Our March 2023 STR regulations were our final and best offer. We are not going to spend the next four years constantly renegotiating…”
“We would be naïve to think that there would not be future potential lawsuits or restraining orders. We want to make sure that we do it right, protection of our neighborhoods has got to be paramount…”
The Court’s decision comes on the heels of what AirBnB (the largest STR platform) has referred to a “de facto ban” that went into effect on STRs in New York City on September 5, 2023.
On September 27, the city of Richmond, Virginia took an approach similar to the City of New Orleans by passing on-site STR operator requirements.