Since it first legalized short-term rentals nearly a decade ago, the New Orleans City Council has repeatedly adjusted city regulations, trying to balance residents’ concerns about noise and rising rents with the rights of property owners to rent out their homes to guests.
Some of the regulations — licensing laws, safety requirements and caps on numbers of guests per unit, among others — impact how companies like Airbnb or VRBO must operate their platforms in the city.
In response, several local property owners and Airbnb recently sued the city – the third lawsuit over short-term rental regulations since New Orleans first laid down permitting rules in 2016. And it’s the first suit in which the home-sharing giant – the largest short-term rental platform in the industry – has joined as a plaintiff.
Plaintiffs say the regulations infringe on property owners’ rights and illegally force booking platforms to enforce the city’s regulations.
In a statement to Verite News, Airbnb called the city’s policies “some of the most extreme short-term rental restrictions on hosts in the country.” The company maintains that its platform benefits the local economy and helps hosts earn reliable income.
During events like the Super Bowl and Mardi Gras, demand for short-term rentals is higher than normal, said Monique Blossom, director of policy at the Louisiana Fair Housing Action Center. Blossom and other critics of the short-term rental industry argue that, by taking housing off the long-term rental market in some of the city’s most high-demand neighborhoods, it drives gentrification and affects housing stock and affordability.
“The reality is it disrupts the quality of life in the neighborhoods where these are found,” Blossom said.
Here’s what you need to know about short-term rentals in New Orleans.
What are the current regulations for legal short-term rentals?
Since 2016, New Orleans City Council has passed a series of ordinances regulating non-commercial short-term rental properties. A short-term rental is defined as a home offered for stays of 30 days or less.
Some of the regulations are related to its permitting process. Only properties with a permit can legally host renters – those without a permit are operating illegally.
Most notable is a rule which allows only one property to be permitted within a square block in a residentially zoned neighborhood. If multiple properties within a square block apply for a permit, a lottery system determines who will ultimately receive a permit.
Corporate entities, such as LLCs, are not permitted to rent out residential properties. And property owners can only be permitted for one property.
All properties must have a property manager or operator living on site full time. This rule is intended to encourage out-of-state investors to have a presence in the neighborhoods they are operating in.
“If somebody local owns that, they can respond a lot quicker than somebody who lives out of state to an emergency or quality of life concern that’s happening on their property,” Blossom said.
Additionally, properties in the French Quarter and certain sections of the Historic Garden District cannot be permitted.
Are there any exceptions?
Exceptions to the one-block density limit were put on pause for one year in December. However, the city is still working through a backlog of exception applications that were filed before the pause.
Prior to the pause, an amendment to the density limit ordinance allowed special exceptions for two additional permits per square block.
The City Planning Commission, which recommends whether or not to approve an exception before it is decided by the council, was criticized for being inconsistent and subjective in its review process.
An August 2024 report by the The Times-Picayune found that all but one exception had been approved by the council – many of those granted went against recommendations from the City Planning Commission.
Why is Airbnb suing New Orleans? What’s in the lawsuit?
Airbnb and several local operators filed a lawsuit Feb. 14 against the city of New Orleans over its short-term rental policies, arguing they unconstitutionally infringe on property owners’ rights.
“The 2023 Ordinances are as unlawful as they are misguided,” the 79-page lawsuit said. “The restrictions violate the Takings Clauses of the U.S. and Louisiana Constitutions by preventing Host Plaintiffs and other homeowners from exercising their fundamental right as property owners to lease their property to short-term guests and realize the full value of their homes.”
They also expressed legal concerns around policies requiring platforms like Airbnb to share certain data with the city, and claim the city is illegally forcing platforms to enforce the city’s laws.
The plaintiffs claim that city ordinances are “unprecedented restrictions” that are unconstitutional.
“We never imagined we’d have to file a lawsuit against the city we love and call home, but the never-ending onerous regulations have put our livelihood at risk,” said Brad Newell, a plaintiff in the lawsuit, in a statement.
The lawsuit challenges all of the city’s regulations for permitting.
It also challenges recent rules imposed on booking platforms like Airbnb.
A 2024 ordinance requires Airbnb and other platforms to remove listings for properties that aren’t permitted by the city. This regulation is currently set to go into effect on June 1. Plaintiffs claim that this ordinance improperly “deputizes” booking platforms to enforce city regulations, forcing them to take on the city’s role as regulator and law enforcement officer.
Another requirement is that booking platforms must submit monthly reports to the city with data on its rental properties, forcing the company to violate its customers’ privacy, the lawsuit argues.
“Over the years, we have promoted responsible hosting in accordance with local regulations, including by giving city staff access to Airbnb’s City Portal since 2020 to help them enforce their short-term rental rules,” said Haven Thorn, a spokesperson for Airbnb. “Even so, the city has struggled with poor coordination between city departments and administrative challenges around short-term rentals.”
How are regulations being enforced by the city?
In spite of what Airbnb characterizes as an overly strict enforcement regime, the city has over the years developed a reputation for letting the industry get away with a lot. And many operators in the city are still renting out properties illegally, largely unchecked.
Data kept by the city shows nearly 2,500 licenses had been issued as of Feb. 23, and about 1,350 of those are in residential areas. According to Inside Airbnb, the platform has more than 7,000 active listings in New Orleans; unlicensed Airbnbs operating in the city have been estimated to range into the thousands.
Criticisms of the city’s enforcement of short-term rentals have come from outside and inside City Hall.
In 2024, Mayor LaToya Cantrell’s Deputy Chief Administrative Officer Thomas Mulligan wrote a letter to City Council Vice President JP Morrell, calling for significant reform to the short-term rental program. Mulligan also outlined issues with process of setting fines against violators.
A July 2024 report by Gambit found that the city’s short-term rental office was understaffed and unable to handle all of the hearings it should have been conducting. But With recent moves such as the 2024 law requiring short-term rental companies to remove unpermitted listings, the city has put some of the responsibility of enforcement on the platforms..
“Platform accountability is a common sense solution that would help preserve neighborhoods, but Airbnb has once again shown that they are not interested in common sense solutions,” said Monet Brignac-Sullivan, a spokesperson for Morrell.
In a statement to Verite News, Airbnb cited resources on its website that lay out the rules for hosting legally in New Orleans, along with its “City Portal,” which the company says can help local governments enforce regulations.
What’s next?
The future of short-term rentals in New Orleans could hinge on the outcome of legal challenges such as the one filed last month.
Airbnb’s federal lawsuit follows a 2019 challenge to the city’s permitting law, which took issue with provisions including a requirement for residential short-term rental owners to essentially prove that they lived in the homes they were renting out. A federal judge sided with the city in that suit last year, but the plaintiffs have appealed it to the U.S. Fifth Circuit Court of Appeals.
Morrell has said on the record that if the courts overturn the city’s rules, he would move to ban short-term rentals entirely.
“If the courts determine that the City cannot effectively regulate STRs in a way that respects and protects neighborhoods, then the City Council will ban short-term rentals,” Morrell’s spokesperson said.
The legislation that would enact a ban has been on the council’s agenda for more than a year, according to Morrell’s office, and it will remain on the agenda until both lawsuits are resolved.
Statewide legislation impacting regulation could be proposed during this year’s session. Per Louisiana Ethics Administration Program records, Airbnb currently has two lobbyists registered in the state.
In 2024, Rep. Rodney Lyons, D-Marrero, proposed two bills — seen as friendly to the industry — that would have made it harder for local governments to regulate short-term rentals.
One bill proposed a framework for private property owners in Louisiana to take legal action against local governments whose policies may impose a “burden” on owners’ property rights. Another bill sought to prohibit local governments from regulating online marketplaces like Airbnb.
As of Monday (Feb. 24), legislators have prefiled 13 bills for the upcoming spring session, which begins on April 14. Thus far, none address local short-term rental regulations.