With the revamp of the residential short-term rental regulations passed recently, the New Orleans City Council has turned its attention to commercial short-term rental (“CSTR”) regulations. The City Council has asked the City Planning Commission (“CPC”) to study the regulations to determine the overall impact of CSTRs on the City’s neighborhoods. In particular, the CPC is to analyze the overall impact of CSTRs on the availability of both affordable and market-rate housing and make recommendations on possible solutions to mitigate CSTR impacts on citizens’ quality of life. Areas for analysis include:
- Limitation on number of units per building;
- Limitation on number of rooms and guests, by unit;
- Other density limitations, which may vary by zoning district, zoning district classification, future land use designation, or other such land use designation;
- Number of commercial permits allowed per owner and/or operator;
- Requirement that each permit holder is a natural person, not a juridical person;
- Strengthened requirements, including density limitations and other new standards, for CSTRs that 1) abut residential or mixed-use zoning districts, and/or 2) are located in the building that also houses long-term residents, so as to mitigate quality-of-life impacts;
- A ban on whole home or whole building CSTRs;
- A requirement for CSTRs to be located on the same lot, parcel, or building as other commercial uses;
- Possible use of CSTR allowances to incentivize the development and/or preservation of affordable housing;
- In buildings with units used for both long-term and short-term housing, requiring separate entrances to access short-term dwelling units;
- Requiring other standards for entry, including keypads;
- Requiring on-site operators; and
- Overall impact of CSTRs on the availability of long-term housing, both affordable and market rate, and possible measures to mitigate such impacts, including but not limited to, an overall cap on persons or permits who may participate in the commercial short-term rental market, and increasing the price of a commercial short-term rental owner and/or operator permit.
At the CPC’s public hearing on the topic, there were comments for and against strengthening the current CSTR regulations. Those in favor of strengthening the regulations argued that CSTRs are affecting New Orleans residents’ quality of life due to CSTRs creating nuisances such as increased noise, parking, and litter. They also argued that CSTRs replace affordable housing and hotels. Those against strengthening the current CSTR regulations argue that CSTRs foster other commercial growth in neighborhoods in need of redevelopment and CSTRs could be used as a mechanism to require affordable housing development as a component of approval of CSTRs. There will be another public hearing before the City Planning Commission with the revised study to be introduced by August 23, 2023, which will be open to public comment in person or by email. In the meantime, there is still an Interim Zoning District in effect that prohibits the issuance of new CSTR licenses in certain zoning districts. Those licensees that currently hold licenses should be grandfathered in absent legislation that would phase out CSTRs.