New short-term rental inquiries paused as New Orleans council decides next steps

The New Orleans City Council has declared a temporary moratorium on allowing new residential short-term rentals as the city returns to the drawing board to craft new regulations aimed at curbing the controversial industry.

The Council adopted a movement at a special meeting Monday that effectively suspends new short-term rental applications for residential units for six months. The move comes after a federal appeals court ruled last week that a key part of the city’s existing regulations were unconstitutional.

The existing arrangement governing short-term rentals, passed in 2019, prohibits “whole house” rentals in residential areas by requiring licensees to be granted an ownership exemption for lots they list on rental platforms at short term like Airbnb. This means that the owner must live on site.

But the New Orleans 5th Circuit Court of Appeals ruled the provision violated the Commerce Clause of the U.S. Constitution by discriminating against out-of-state property owners, according to The ruling did not immediately void city bylaws, but lays the groundwork for a district judge to do so.

General Council member JP Morrell said the recently passed break means that over the next six months all residency permits will be phased out; in the meantime, the Planning Commission and the Council will draft new laws.

“We want to make sure all permits are under the same regime,” Morrell said.

Enforcement of the city’s 2019 ordinance has become a key issue since the rules were passed, with an unknown number of unlicensed short-term rentals underway at any given time. Morrell noted Monday that freezing new applications could give the Department of Security and Permits time to work through a backlog of illegal short-term rentals “and possibly process them before coming out the other side.”

The Council also introduced an ordinance requiring short-term rentals to have prominent signage with their permit information, which Morrell says is intended to make enforcement easier and allow neighbors to have the contact details of property owners. short term rental.

These changes do not affect commercial or mixed-use areas, which have different permit requirements.

According to a 2018 report per the Jane Place Neighborhood Sustainability Initiative, the proliferation of short-term rentals has contributed to a broader rise in housing costs in New Orleans as more units are moved from residential to tourist use.

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