New Orleans ready to vote on Airbnb regulation

Christopher Walker, Editor-in-Chief

Last month, the New Orleans City Council commissioned a study into short-term rentals and their effects on the city; and on Oct. 8, a major vote will determine the fate of short-term housing rentals in New Orleans, the largest portion of which are Airbnb rentals.

“The appropriate regulatory enforcement mechanisms need to be in place before short-term rentals are allowed to legally operate in New Orleans,” said Jared Brossett, a member of the New Orleans City Council.

The city of San Francisco, another city with a thriving tourism industry, recently decided that it had enough of Airbnb using their city without seeing any revenue from taxes and sued Airbnb $1,000 every day for each unregistered home on their website.

San Francisco councilman David Campo opposed Airbnb from the company’s start. His assistant, Carolyn Gossenn, spoke out recently on Airbnb.

“We definitely believe there is a place for short-term rentals in San Francisco, if regulated well. But we also need to ensure housing for all, which is so precious right now in San Francisco. We need to make sure that the short-term rental industry does what it’s supposed to do, which is to provide some additional income for folks that are struggling while at the same time not replacing long term housing for folks.”

For some landlords, having a steady rotation of tourists can be more profitable than one long-term tenant. Unfortunately for New Orleans suburbs, that means many homes are ground zero to an ever-changing group of loud, obnoxious and drunk tourists who are only concerned with partying as hard as they possibly can.  

“We feel like it’s not an either-or; it’s how can we achieve a harmony of having some short-term rentals but done in a fair, regulated way.”  

Regulating a large-scale service Web site like Airbnb is extremely difficult. Often, listings on the site go unreported to local government, and the city sees no tax revenue. Airbnb is notorious for allowing its listings to avoid local taxes.

“We’ve been trying to regulate Airbnb rentals for a few years now, and it’s been very challenging. One of the challenges has been that Airbnb is the largest, most profitable startups in the world. Airbnb worked closely with some of the [lawmakers in San Francisco] a few years ago to craft legislation that ultimately kept them off the hook. They crafted the legislation in such a way that it’s actually unenforceable.”

The city of New York had similar problems, and Airbnb is currently being brought to trial there. As reported by The New York Times, tourists spent about $2 billion on Airbnb rentals last year. Virtually none of that money was taxed in New York. Cities are starting to fight back, making Airbnb legally responsible for any tax avoidance.

Much of the controversy surrounding Airbnb regards whole-home rentals turning neighborhoods into extensions of the French Quarter. Many landlords do not live in the houses they rent out; they have simply purchased multiple properties around the city and rent them out.

“The law was written a few years ago: If you live in your home and are renting out a guest room, you can do short-term rentals year-round. If you’re away from your home, or on vacation, you can do it 90 days in a year. That’s the current law in San Francisco, and in theory, it solves so many problems. The issue is, again, no enforcements because the platforms control the data, and a lot of people just ignore the law.”

“I think it also requires bravery on the part of political leaders because this company has been throwing their weight around financially and into campaigns. [Political leaders] need to take this on because, of course, corporations are going to spend money to receive less regulation.”

San Francisco and New Orleans share many characteristics, and Gossenn warns the New Orleans government to be wary of Airbnb’s effects on housing prices.
“Airbnb has not created gentrification or created a housing crises, but it has exacerbated them. The neighborhoods with the highest evictions in San Francisco also have the highest number of Airbnbs.”