“History affords us many instances of the ruin of states, by the prosecution measures ill suited to the temper and genius of their people. The ordaining of laws in favor of one part of the nation, to the prejudice and oppression of another, is certainly the most erroneous and mistaken policy.”
~Ben Franklin 1774
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shead@nola.gov
jasonwilliams@nola.gov
sgguidry@nola.gov
lcantrell@nola.gov
districtc@nola.gov
councildistrictd@nola.gov
jagray@nola.gov
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The New Orleans City Council will vote on short term rentals on Thursday, October 6th.
August 8, 2016
Director Robert D. Rivers
City Planning Commission
1033 Perdido Street, 7th Floor
New Orleans, LA 70112
RE: FSJNA Positions on Short-term Rentals
Director Rivers,
The Faubourg St. John Neighborhood Association (FSJNA) would like to put on record our opinions regarding Short-Term Rentals in New Orleans. These opinions are based on the existing CPC study, research into how other cities in the country are handling the same challenges, recommendations from other New Orleans neighborhood associations and, our members.
FSJNA found there is a greater adverse impact to our neighborhoods from short-term rentals than we originally anticipated and that the number of housing stock used for short-term rentals has increased from what was observed in the 2015 festival season.
For the four types of Short-Term Rentals itemized in the existing CPC study:
PRINCIPAL RESIDENTIAL / “WHOLE HOUSE” – FSJNA is in complete opposition to this type and strongly believes the CPC was right to remove this option from the earlier report. This type of use has the most adverse effect on neighborhoods and residents. It removes valuable housing stock that could be used as affordable rentals or sales to primary residents, and artificially inflates home sale prices and property tax values.
TEMPORARY – We are against any whole home rentals, even if owned by an owner-occupant. We believe there is no practical way to enforce the proposed 30 day/4 times per year restriction.
ACCESSORY – Allow only a permanent resident owner to rent out spare bedrooms or additional units in a multi-family that he or she occupies, but he or she must occupy at least one of the units.
COMMERCIAL – FSJNA believes that the CPC must identify the types of commercial zones they will allow this use, not just all “Commercial or Mixed Use” properties. Additionally, FSJNA believes that ALL short –term rentals in Commercial or Mixed use zones should ONLY BE ALLOWED AS CONDITIONAL USE.
For Overall Short-Term Rental Options:
FSJNA supports requiring a permit number be associated with every online listing.
Fines for enforcement or taxation violations should be the cost of doing business or a minimum of $1000 per instance whichever is greater. Penalties for breaking the law must be very high to ensure compliance with any new zoning use and enforcement. They should also attach to the property, such as a tax lien, to ensure compliance.
FSJNA reserves the right to offer additional opinions to city agencies and City Council pending the results of CPC Staff draft ordinances and reports expected this summer.
Thank you for your consideration, we would be happy to work with you to offer our ideas about ways to ensure compliance and to ease enforcement. For further information, please do not hesitate to contact me.
Sincerely,
Steve Mardon
President, Faubourg St. John Neighborhood Association
president@fsjna.org
(504) 486-8125
CC:
shead@nola.gov
jasonwilliams@nola.gov
sgguidry@nola.gov
lcantrell@nola.gov
districtc@nola.gov
councildistrictd@nola.gov
jagray@nola.gov
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SHORT TERM RENTALS
by Emile J. Brinkmann
I am submitting these comments in connection with the City Planning Commission’s reconsideration of the issue of Short-Term Rentals (STRs) in Orleans Parish, and the City Council’s directive that a proposed zoning ordinance be drafted. As a point of background, I am the retired Chief Economist of the Mortgage Bankers Association in Washington and spent years running a research group dedicated to housing and housing finance issues. I have appeared on all of the major network and cable news shows, and have been quoted in newspapers through the US and other countries. Even though I retired and moved back to New Orleans two years ago, I am still the US representative on the executive committee of the International Union of Housing Finance, a 100-year old organization dedicated to housing issues around the world.
Based on my background, I cannot think of an action that would be more destructive to the fabric of our neighborhoods and the well-being of our homeowners than the legalization of STRs for the benefit of a few, thereby rewarding those who take advantage of a lack of enforcement to violate existing laws with impunity. In Part One of my comments, I will make three basic points about the negative economic effects on homeowners. In Part Two I will address comments that have been made to the effect that AirBNB, VRBO, and similar operations are like Uber and are merely part of the growth of the so-called sharing economy.
Part One
1) STRs fundamentally upset residential valuations by introducing unsustainable commercial valuations into residential neighborhoods.
We have already seen home prices in historically significant neighborhoods increase at rates far in excess of the local incomes needed to support those prices. A significant portion of those home price increases are due to ability of some of the properties to earn upwards of 20 percent to 25 percent return on investment through illegal renting. This is great news if you already own a home in one of these areas and will be selling soon. Because the Assessor’s Office has no way to separate out house sales for STR usage, this is great news if you are the city collecting residential property taxes based on values inflated by STR commercial use. It is bad news if you are trying to buy or rent in Mid-City, Treme, the Bywater, or other impacted neighborhoods in order to live in the city.
It is terrible news if you are a long-term resident with no intention of moving, but are now faced with an annual property bill driven up by the valuation effects of illegal renting.
The valuation and property tax problem will likely be exacerbated by the idea that the city can mitigate the negative impact of STRs by limiting the number allowed per block face. The owner of the first one on the block makes a killing, and the value of that property goes up. However, the other owners on the block not only have to deal with the disruptions caused by the STRs and the higher property taxes, they are precluded from selling at the higher STR-driven prices because no other STRs will be allowed on their block (assuming for the sake of argument that the city would actively enforce density limitations). Therefore, the idea that the negative impacts of STRs can somehow be ameliorated by reducing the permitted densities can actually make more people worse off from a valuation perspective.
Given the instability of this structure and the lack of equitable treatment in terms of valuation and who is allowed an STR and who is not, I do not believe density limits would survive legal or political challenges, and are therefore not a viable option to prohibition.
The result is that if you are a New Orleans resident with no intention of selling and moving, you would not only face the prospect of having weekly fraternity parties next door, you get to pay higher property taxes for the privilege. The result is that if you are looking to buy, you risk over-paying and being underwater on your mortgage if something were to happen suddenly to impact negatively the STR business, as will be covered in the next point.
2) Short-term Rentals directly inject the business risk of tourism into residential neighborhoods.
Hotel owners and operators are accustomed to the business risks associated with the travel and hospitality industry. These risks are reflected in their operational plans, capital investments, and equity and debt financing costs. They understand that in a recession, travel is disproportionately impacted as businesses cut back on discretionary travel as a first response. They learned in the aftermath of the 9/11 attacks that terrorism can interrupt air travel, and that even when flights are restored, companies will impose travel restrictions on key personnel.
In New Orleans and other hurricane-impacted areas, they have learned that even the threat of a storm, with or without a mandatory evacuation, can cause their rooms to empty and disrupt operations for some time. (As a side note, would operators of STRs be required to maintain enforceable hurricane evacuation policies for their guests, or would responsibility for these visitors fall on the city?)
In contrast, the health of the hospitality industry has a more muted impact on the traditional residential housing market in New Orleans. Tourism is only one of the legs of the New Orleans economy, and there are other legs to support the New Orleans jobs market and home prices. STRs, however, directly inject the risk of the tourism market into every neighborhood of the city where they exist. Demand for houses and high prices exist when owners can earn high returns, but what happens in a downturn? What happens when tourism suddenly slows for one of any number of predictable and unpredictable reasons? What happens is what we have seen in other housing markets dominated by investors and speculators. At the first sign of a reversal, they sell with a vengeance, driving down prices and leaving the long-term residents suffering the consequences of rapidly falling prices and “For Sale” signs everywhere. If the properties are leveraged, they can sit for months and years as they work their way through the mortgage foreclosure (and probably bankruptcy) process, further depressing values.
Real estate speculation is a fact of life. Some people win and some people lose. When a strip mall goes bankrupt on Airline Highway, the negative consequences (other than to the property’s owners and lenders) are limited to having one more eyesore around town. When that speculation, however, is driven by STRs and is occurring in some of the city’s most important and historic residential neighborhoods, the negative consequences of a drop in tourism will go right to the hearts of these neighborhoods, and will be much more severe and widespread than any normal downturn.
3) Weekly bachelor parties are more than a nuisance. They represent a real loss of value for the neighbors.
Many of the comments presented to the CPC and the City Council on this issue have dealt with the horror stories of late night parties and the problems that occur when out-of-towners believe that they can freely extend the revels of Bourbon Street to the residential neighborhood where they have rented a house for the weekend. The problems go far beyond loss of sleep, frustration with the inability of an under-staffed NOPD to deal with noise issues, and the absence of a private right of action to move against the owners of the offending properties. They represent a real loss of value to anyone attempting to sell an impacted home to anyone other than an STR operator. (I do not know whether the failure to disclose a nearby nuisance STR in a real estate declaration has been tested in a Louisiana court, but I am fairly certain it would be actionable in other jurisdictions.)
The logical outcome is that once an STR opens on a block, the only informed sales that would not be negatively impacted by the existence of the STR would be those to another STR operator. As already noted, however, such a sale would be prohibited if density limitations were put in place as part of an attempt to make STRs politically palatable.
This points again to the utter fallacy of putting any faith in density limitations. The idea that the CPC and the City Council would not be inundated with requests for exceptions, and that many of those requests would be granted, simply ignores political reality. That assumes, of course that the many illegal operators of STRs would even apply for exemptions to the density limits. The reality is that the city has failed for years to deal with illegal STRs. Based on this history, it is reasonable to expect that any density limits would be ignored or gutted in a few years.
In conclusion, the adoption of a legal STR framework for residential neighborhoods, particularly for non-owner occupied structures, would have tremendous and largely irreversible negative impacts on the fundamental character of the city for years to come. Ignoring the quality of life issues, the economics alone will lead to a further hollowing out of the city’s full-time residents. Homeowners will see that the rational action is to sell. They would avoid both the higher property taxes and the risk of a speculative bubble bursting with downturn in the tourism industry.
Part Two
AirBNB is not like Uber
It has often been argued that AirBNB and similar operations are nothing more than Uber for houses, that they are simply one part of an irreversible movement toward a shared economy where technology brings together the buyers and sellers of various services. At their best, such arguments are facile and do not stand up to even a modest amount of economic scrutiny. At their worst, they are a bald-faced attempt to direct attention away from what is illegal activity by saying that it is no different from what everyone else is doing in other areas of the economy. In reality, the only similarity between Uber and AirBNB is that both rely heavily on computers and smart phones.
Uber is an example of what the Austrian-American economist Joseph Schumpeter described as “creative destruction”. The idea is that in a capitalist system, economic growth occurs when innovators put their money behind new ideas for goods and services. While the creative process is the key for creating new markets and new opportunities, it comes at the cost of destroying old products and services, and the capital invested in delivering those old goods and services.
A prime example is Blockbuster versus Netflix. Blockbuster invested huge sums in brick and mortar stores and an inventory of video tapes, and later DVDs, to fill the shelves in those stores. It had a large complement of employees to man the cash registers and stock those shelves. Along came Netflix with the idea that people could go to their computers, select what titles they wanted to see, and have the DVDs delivered a few days later by the postal carrier. Immediately successful, the service Netflix created began the destruction of the hundreds of millions of dollars Blockbuster had invested in its system. Later, when Netflix switched to streaming content, it effectively destroyed the capital Netflix itself had invested in DVDs and its mail order business.
In Uber’s case, it challenged the existing way of summoning a taxi, as well as introducing a model that matched supply and pricing to peak periods of demand. Uber was challenging the economic model of the taxi business, but, more importantly, it challenged the local regulatory framework for taxis that existed in each of the cities where it sought to operate. Its success has come in exposing and differentiating between those regulations that were necessary for the public’s protection and those regulations that merely existed to protect the status quo. After all, until Uber, the method of summoning a cab outside a hotel had not really changed since the 1800s. This is Schumpeter’s creative destruction process at work.
The key difference between Uber and AirBNB (and similar companies) is that there is nothing fundamentally illegal about the service Uber provides. Paying someone to take you in his or her car from Point A to Point B is not inherently illegal, provided appropriate licensing requirements are met. The only ones harmed by the Uber innovation are those invested in the old ways of doing business.
In contrast, AirBNB and similar services are providing technology platforms that offer services that are fundamentally illegal. The regulations of which AirBNB facilitates the violation are not there to protect capital invested in the hotel industry. Rather AirBNB is facilitating, for a profit, the violation of zoning laws that were enacted to protect individual homeowners from this type of commercial activity. If the only harm was to the established hotels and legal bed and breakfast establishments, it could be argued that AirBNB is just another example of Schumpeter’s creative destruction. However, the true harm and destruction is to the residents of the neighborhoods disrupted by the illegal short-term rentals. The residents of these neighborhoods do not have capital at risk in the hospitality industry like Marriott or Hilton. Rather the capital they have at risk is in homes that they trusted would be protected by zoning laws and the enforcement powers of the city government. It appears that trust was misplaced.
Therefore, AirBNB has nothing to do with Uber or Schumpeter’s growth through creative destruction, but is simply a case of making a fast buck at the expense of someone else by facilitating an illegal activity. The closest parallel to AirBNB is not Uber, but hiring prostitutes with Craig’s list.
Sincerely,
Emile J. Brinkmann
Jay Brinkmann is the retired Chief Economist and Senior Vice President of Research and Education at the Mortgage Bankers Association where he worked on a wide range of issues impacting single-family, commercial and multifamily real estate finance. His team handled economic forecasting, responding to regulatory and legislative issues impacting the mortgage industry, and benchmarking the operational efficiency and profitability of the mortgage divisions of commercial banks and independent mortgage companies.
Jay is a native of New Orleans, but began his career on Capitol Hill as the press secretary to U.S. Rep. David C. Treen. He then served as Treen’s deputy chief of staff when Treen was elected governor. He worked in commercial banking at what was then Louisiana National Bank/Premier National Bank in Baton Rouge, and was on the business school faculty at the University of Houston where he specialized in financial institution regulation and energy markets. Immediately prior to joining Mortgage Bankers Association, he worked in the portfolio strategy group at Fannie Mae.
He has published articles on bank regulation and housing finance in various academic journals and on the op-ed pages of The Wall Street Journal and the American Banker. He was frequently quoted in print and electronic news outlets on real estate finance topics, has appeared on the news shows of all of the major broadcast and cable networks, and has testified before the US House and Senate banking committees. Jay holds a Ph.D. in finance from Purdue University, an MBA from Tulane University and a BA in International Affairs from The George Washington University. He currently serves at the US representative on the executive committee of the International Union of Housing Finance, a 100-year old organization dedicated to housing issues around the world.
He returned home as a full time resident to New Orleans in 2014 after a 40-year absence, intending to spend his time being a grandfather, and renovating an old home. He has instead found his time increasingly occupied by being a volunteer for various public policy and community service projects.
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Lisa Amoss writes, “This is a problem that is rapidly spiraling out of control. While, in our post-Katrina recovery and rebuilding mode, we haven’t been paying attention, our neighborhood (and many others) have been invaded by short-term rentals and they are drastically changing our character and culture. I am NOT talking about neighbors renting out rooms in the homes they occupy, nor about anyone occasionally renting out the entire home they occupy for Jazz Fest while they are out of town. I am talking about developers coming in and buying up multiple houses, then renting them out as a business venture. These are hotels in residential neighborhoods. They are creating parking and noise problems on our residential blocks, and they are helping to drive up housing prices so that young families cannot afford to buy homes here any more. Our neighborhood is becoming increasingly occupied by transients who have no vested interest in keeping this a vibrant, diverse and safe place to live. If your block has not yet experienced this, there are many in FSJ that have. And it’s changing faster than you can imagine. ”
Cynthia Scott writes, “The ‘hotel’ on my block has now graduated to an events rental venue. Last week, for 3 or 4 days running, the space was rented to someone from Tales of the Cocktail for a daily party from early afternoon to 7 pm each day, with a DJ blasting extremely loud hip hop and other music and a constant stream of people being ferried from the CBD to the location via Uber. A week or two earlier the space was rented for the day to a HUUUUUGE (to paraphrase a certain candidate) birthday party which drew people from all over the city, with cars racing up and down our one-way street and parking in people’s driveways. They departed by sundown, so neither of these rentals could be considered a “home rental” by any definition.
An open letter to the Tales of the Cocktail Community regarding the effects of Short Term Rentals in New Orleans
Dear friends,
This open letter is not about Air…BnB as such, but about the challenge of supporting your industry and community amidst new paradigms of travel and tourism. When Tales of the Cocktail was founded, we deliberately placed the event in July, one of the most difficult months for our local economy, in an effort to help increase revenue for New Orleans’ many hospitality businesses and employees. The hotels, bars, restaurants and thousands of hospitality workers they employ have been grateful for Tales of the Cocktail, and we want to continue to do right by them. In this spirit, we write to you today to help raise awareness about the effect short term rentals, such as AirBnB, are having on residents, business owners, and event producers, like ourselves.
Bar manager at Erin Rose, and former CAP, Rhiannon Enlil was given a notice of eviction last week, after four years in her apartment because her landlord wants to list the property on AirBnB. This is by no means an isolated incident. There are now over 4,316 AirBnBs operating in New Orleans.
“There are a finite number of homes in this city, and the demand is high for workers and residents who keep the economic engine running. If you allow short-term rentals to eat away at that supply, the appeal to live and work in this city diminishes. All of the visitors who use short-term rentals, who want to eat in our restaurants, listen to our live music, drink in our bars… who will serve them if we in the service and entertainment industry cannot afford to live here?”
Rhiannon Enlil
Erin Rose
Newly evicted tenant
This issue is also having a significant impact on the hotels and licenses B&B’s in New Orleans. Hotels are one of the longest standing harbingers of hospitality. They employ hundreds to thousands of people, provide insight and infrastructure to guests, and work with event organizers to facilitate events that would otherwise not be possible, such as Tales of the Cocktail. Every tasting room and seminar we facilitate is done so in a hotel, and it’s hard to imagine where else we could possibly produce so many events within one week. Because of our longstanding relationships with these hotels, we’re able to negotiate special rates for Tales attendees year after year. Hotels are experienced in the practice of hospitality, and legally qualified to accommodate our guests, whereas short term rentals, which are illegal in New Orleans, fundamentally upset residential valuations by introducing unsustainable commercial valuations into residential neighborhoods.
In this spirit, we encourage you to stay with one of our partnering hotels (or even another local hotel if you prefer), but please avoid staying at an AirBnB or other short term rental property that is not legally sanctioned to operate in New Orleans. Each short term rental takes revenue away from our own hospitality industry; if the hotels are operating below projected capacity, staff hours get cut, and employees get laid off. Tales of the Cocktail is one of many organizations in New Orleans working to have these illegal rentals addressed by our city government, but in the meantime, we encourage you to consider the matter for yourself. Everyone wants the best deal they can find, but sometimes the best deal results in an exceptionally rotten deal for everyone else. We employ you: help us keep locals in their homes and guests visiting our city in the many beautiful and hospitable hotels and B&Bs New Orleans has to offer. Thank you for your time and consideration. If you support this effort, please share this post.
Respectfully,
Tales of the Cocktail
Thank you to our partnering hotels: Hotel Monteleone, Royal Sonesta Hotel New Orleans, Ace Hotel New Orleans, AC Hotel New Orleans Bourbon, Bienville House, Bourbon Orleans Hotel, Dauphine Orleans Hotel, Hotel Le Marais, Hotel Mazarin, MOXY NOLA, Omni Royal Orleans Hotel, The Ritz-Carlton, New Orleans, W New Orleans – French Quarter.
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“Venice, whose world-famous canals are constantly in a precarious condition because of the environment, is now seeing some 22 million visitors per year, which dwarfs the estimated 55,000 people who actually live there. And while many Venetians rely on tourists filling hotels, going for gondola rides, and eating in restaurants to stimulate the local economy, it’s clear that some people would rather the travelers go home.”
The effects of “over visiting” in Venice is reaching a boiling point, so much so that residents are posting signs telling tourists to go away. An independent study projects by 2030 there will be zero locals living in Venice.
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shead@nola.gov
jasonwilliams@nola.gov
sgguidry@nola.gov
lcantrell@nola.gov
districtc@nola.gov
councildistrictd@nola.gov
jagray@nola.gov
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from Keith Hardie
Please send your comments about short term rentals to:
cpcinfo@nola.gov, jasonwilliams@nola.gov, shead@nola.gov, sgguidry@nola.gov, lcantrell@nola.gov, districtc@nola.gov, councildistrictd@nola.gov, jagray@nola.gov, rdrivers@nola.gov, mayor@nola.gov, ryanberni@nola.gov
Members of the Planning Commission:
Please oppose legalization of whole house short term rentals, which the Advocate characterized as “year-round miniature hotels” in residential neighborhoods throughout the City. At a meeting with the Administration, neighborhood leaders were told that the City needs to legalize these rentals so that it can better deal with the “bad apples” – the bachelor parties, late night shouting matches, etc. – but even if the City succeeds at that, it wouldn’t address the major question: are we going to displace thousands of long-time residents for tourists, driving the cost of buying or renting homes and apartments in New Orleans higher and higher, and leaving many existing residents without real neighbors. Other cities, such as Seattle, have recognized that speculators are “shifting hundreds of homes from the long-term residential market to short-term rental platforms like Airbnb, and in doing so dangerously reduce our housing supply,” and have moved to stop or limit the practice. Don’t let tourism and short term rentals do to New Orleans what they did to Venice, where, in three decades, soaring property values have reduced the population from 120,000 to 55,000.
Please insure that long-time residents and their children can continue to live in New Orleans. Do not recommend to the Council that whole house short-term rentals in residential neighborhoods be legalized. If they must be legalized, they must be severely limited, for example, by not allowing a new one within four blocks of another.
I would also ask you to seriously limit STRs in commercial areas. The proposal in your original study opened up those corridors to STRs with few restrictions, and if that proposal becomes law, I anticipate that many apartments on our commercial corridors, such as those in the Lafayette Square and Warehouse Districts, will be converted to short term rentals, further tightening the housing market for residents,and, in particular, making it difficult for young people who want to work in the city and live in commercial areas to find housing. I hear that one apartment building under construction has already been fully leased to a single entity for this purpose. Please, read the article about Venice linked to above. That is where we are headed if you do not place significant limitations on STRs.
The administration told neighborhood leaders that regulating STRs would cost in the range of $ 750,000 – $ 1,000,000 a year. That is not a huge amount, and I suggest that the City find the funds to create an agency policing STRs before it opens up the floodgates and legalizes STRs wholesale. This may be the biggest threat to face the City since Katrina. It certainly has the potential to displace a lot of residents. If you let this genie out of the bottle, you will never get it back in, and you will never hear the end of scofflaws moaning about their 5th Amendment property rights.
Finally, it would be grossly unfair to reward those who have been buying these properties and operating them illegally by allowing them to be first in the door for legalization. The fact that they knowingly broke the law tells us that they will continue to do so. Every application for a short term rental should require the owner to state, under oath before a notary, that he or she has not owned or operated a short term rental or been the beneficial recipient of any proceeds (such as through an LLC) from an illegal or unlicensed short term rental in New Orleans or any other city for three years prior to the application, that he or she currently has no interest in any other STR, and that he or she agrees not to operate (or be the beneficiary of proceeds from) any other STR for as long as the property for which the application is made continues to operate as an STR (such that if the owner/STR operator sells the property to a third party who continues to operate it as an STR, the original owner/licensee cannot apply for a license for a new property, i.e., one STR per customer). If the applicant cannot so swear, the license should go to someone who can.
In addition, the City should require every taxpayer to submit a form with his or her payment of property taxes verifying that the subject property was not operated as an STR during the relevant tax period. That is a legitimate inquiry from a taxing agency and would (a) provide information to the City as to which properties are being operated as STRs so that they can be properly taxed, and (b) put those who file false answers at risk for prosecution for filing false papers.
The Commission did the right thing in cutting back the original staff report and in rejecting the recent proposal to remove limits on Bed and Breakfast facilities. Please, keep up the good work.
Please send your comments about short term rentals to:
cpcinfo@nola.gov, jasonwilliams@nola.gov, shead@nola.gov, sgguidry@nola.gov, lcantrell@nola.gov, districtc@nola.gov, councildistrictd@nola.gov, jagray@nola.gov, rdrivers@nola.gov, mayor@nola.gov, ryanberni@nola.gov
shead@nola.gov, sgguidry@nola.gov, jasonwilliams@nola.gov, lcantrell@nola.gov, districtc@nola.gov, jcbrossett@nola.gov, jagray@nola.gov
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by Keith Hardie, Jr.
Please urge your City Councilperson to pass strong regulations prohibiting short-term rentals of residential properties.
Short term rentals, if permitted, will change the character of the City. They should be prohibited for a number of reasons:
1. There are no fire safety regulations for short term rentals as there are for hotels.
2. The “guests” frequently disrupt residential neighborhoods.
3. Demand by investors in short term rentals drive up the cost of housing. As you read this, realtors representing out-of-state investors are actively looking for housing to convert to short term rentals.
4. Local residents are displaced by the increased cost of housing.
Profits from short term rentals are far in excess of normal rental rates. There is plenty of incentive for investors to ignore the law.
5. Those who live next to a short term rental don’t have neighbors, weakening neighborhood cohesion.
6. The City loses tax revenue, both because the “residents” do not pay hotel taxes, and because they do not stay in hotels.
7. The cost of regulating short term rentals will be high and, like so many other things in the City, regulations are unlikely to be enforced.
It is easier to enforce a prohibition than to permit and attempt to regulate short term rentals.
8. Landlords are unlikely to maintain short term rentals.
Look at student rentals in the Carrollton-University area, many of which have been cited for blight, to see what STRs will become and what they will do to a neighborhood.
9. Without its residents and neighborhoods, New Orleans loses its soul. That is what has happened to Venice, as seen in the article below: “There has been an incredible increase in the number of bed-and-breakfasts and rented rooms in the last five years. You go into a palazzo and there are no Venetians at all; it’s just tourists,” says Mr. Secchi . . . . . Locals are also being priced out by wealthy foreigners, who buy up apartments in search of their own little piece of Venetian charm.”
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shead@nola.gov, sgguidry@nola.gov, jasonwilliams@nola.gov, lcantrell@nola.gov, districtc@nola.gov, jcbrossett@nola.gov, jagray@nola.gov
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For Carl Orend, what was supposed to be a dream weekend in New Orleans recently took a horrible turn when he arrived at the Mid-City home he rented through a short-term rental website. “The hygiene of the place was very bad. There was trash everywhere,” he said. “The place was very dirty. The back door didn’t lock properly, didn’t even close properly.”
According to city ordinance, it’s illegal to rent a property for fewer than 60 days in the French Quarter and 30 days in the rest of the city. A spokesman said the city investigates when it receives complaints about a property, and sends violation letters when applicable.
Visit the link below for the rest of the story by Scott Satchfield:
http://www.fox8live.com/story/24016980/f
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Please send your comments about short term rentals to:
cpcinfo@nola.gov, jasonwilliams@nola.gov, shead@nola.gov, sgguidry@nola.gov, lcantrell@nola.gov, districtc@nola.gov, councildistrictd@nola.gov, jagray@nola.gov, rdrivers@nola.gov, mayor@nola.gov, ryanberni@nola.gov
shead@nola.gov, sgguidry@nola.gov, jasonwilliams@nola.gov, lcantrell@nola.gov, districtc@nola.gov, jcbrossett@nola.gov, jagray@nola.gov
REAL WORLD EXPERIENCE WITH A SHORT TERM RENTAL
Michael Cloke posted the message below on Facebook and has authorized the message to be posted here.
Below is some real world experience with a short term rental…
“I have witnessed first hand what short-term renters do to the neighborhood. The only person that benefits from such illegal activities is the landlord. And that is only if the illegal occupants don’t destroy anyone’s property.
Next time some genius suggests that hotels, or the hospitality industry should contribute more fees/taxes to police patrols during such events, just remember; your neighbor skirted the law, and quite possibly deprived you and your family adequate protection, because the funds weren’t there.
When my neighbor rented her basement apt for Jazz Fest several years ago, the out-of-state tenants took a crap in my yard, littered my yard and garden with cigarette butts and beer cans, food wrappers, etc. I’m guessing someone, or several someones peed in my bushes, or poured stale beer in them; they were ruined. My insurance would not pay for it. My neighbor’s ins. wouldn’t pay either~~~the tenants were there illegally (ins rarely pays for a policyholder’s illegal activities). These people who come to town for a weekend or week, are generally here to party! It is a FESTIVAL! Whether it’s JF, Boogaloo, Voodoo, Endymion, etc. And it is not their property, nor are we their neighbors.
It will take more than “permit” fees and hotel taxes to handle the liabilities these transients bring to our neighborhoods. Check your homeowners ins. Such activities may not be covered, and you’ll be stuck holding the bag. It’s is not the same as having guests in your home; you are operating a business that could fall under the legal definition of a B & B or a hostel.
If I knew that my neighbors were renting their place out, say 3,4,or 5 times a year, to people who come here from out-of-state to party, I might not be so inclined to move into the neighborhood.
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Please send your comments about short term rentals to:
cpcinfo@nola.gov, jasonwilliams@nola.gov, shead@nola.gov, sgguidry@nola.gov, lcantrell@nola.gov, districtc@nola.gov, councildistrictd@nola.gov, jagray@nola.gov, rdrivers@nola.gov, mayor@nola.gov, ryanberni@nola.gov
shead@nola.gov, sgguidry@nola.gov, jasonwilliams@nola.gov, lcantrell@nola.gov, districtc@nola.gov, jcbrossett@nola.gov, jagray@nola.gov
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