Tougher STR rules on the horizon
New Orleans is on the way to requiring that short-term rentals be confined to owner-occupied parcels in residential zoning. This homestead exemption requirement is good news for historic neighborhoods, but the upcoming debate over how many short term rentals (STRs) are too many in commercial and mixed-use zoning will be equally important. On May 16, 2019, the City Council approved some changes, including outright prohibition in the French Quarter and Garden District. The council did not set density limits for STRs in commercially zoned properties, saying instead it would wait on the findings of an internal study.
Early this year, the New Orleans City Council tasked the City Planning Commission with developing language for the Comprehensive Zoning Ordinance to implement a new regulatory regime for short-term rentals such as Air BnB and VRBO. The council motion M-19-4 sketched out an approach and commission staff were asked to flesh it out with a view to legality and enforce-ability.
As reported in the Advocate, the Planning Commission rejected a proposed ban on STRs in the Garden District but upheld a ban in the residential areas of the French Quarter. Commissioners endorsed a 25% cap on the number of apartments that can serve as STRs in a commercially zoned building in lieu of the four tiered system of commercial permitting the council motion suggested. Perhaps most importantly, they agreed on a provision to require a homestead exemption for STRs in residentially zoned property. This is widely viewed as the simplest way to curtail the practice of whole-house rentals by non-resident owners.
In addition, the City Planning Commission staff are also conducting a study on the possibility of “incentive zones,” wherein whole house rentals might be permitted as a means of drawing investment to blighted neighborhoods.