We are glad to see that the City Planning Commission has held off on making a decision regarding the future of short term rentals in New Orleans. Taking time to think more, talk more, and field more suggestions before making its recommendation to the City Council is a good idea. We are hopeful this move is an indication that the members of the commission are coming to understand what we have known all along—short term rentals are not “The Problem” that the duplicitous and greedy make them out to be. The short-term rental has become the whipping boy for the city’s ills. In the last municipal election, candidates made sure to mention that “something needed to be done” about STRs. Of course, it is easier to talk about STRs than it is to combat the real issue of affordable housing. But this is a matter that should not be politicized.
In fact, if you are looking for an honest assessment of the city’s affordable housing problem disregard the bogus arguments against STRs being floated and funded by millionaire hoteliers and developers to stop small-time, middle-class New Orleanians from profiting from their real estate investments by participating in the short-term rental industry, which has allowed them to maintain their properties, pay their mortgages, taxes, and insurance premiums as opposed to being forced to sell their homes or worse, losing them to foreclosures and tax liens. Thirty-two percent of local STR operators are African-American.
If you really want to understand how New Orleans has arrived at this place—the place where 61 percent of renters pay more than 30 percent of their income on housing and 36 percent are severely housing cost burdened, meaning they pay 50 percent or more of their income on housing—we will be glad to tell you…again.
Under the guise of “de-concentration of poverty”, the poorest residents of this community were pushed out when public housing was demolished. Private developers were allowed to benefit from the redevelopment of public housing, creating fewer units with only a portion made available to residents that relied on subsidized housing and offering the rest at top-dollar market rates. More working poor and even middle-class New Orleanians soon began to feel the push as well, as they watched their long-time neighborhoods gentrify and property values (along with tax bills) soar. They felt the pinch even more so as home prices and rental rates skyrocketed over the last 13 years. Meanwhile, over the last decade, developers have been given the go ahead to build thousands of luxury condos and over-priced rental units to attract newcomers and entice the well-heeled to return from their post-segregation suburban retreats with little or no attention to the mostly Black, working and middle-class New Orleanians who have always been here and who make New Orleans the cultural jewel that it is, but who cannot afford $1500 a month rent for a one-bed, one-bath apartment. Make no mistake about it, the people struggling to pay rent or mortgages, insurances and taxes…the people getting priced out and pushed out of the city—many of them are the people that the shadow government never wanted to return to New Orleans after Hurricane Katrina in the first place. This affordable housing crisis was not happenstance. It was by design. In fact, it seems to us that our city’s business and political leaders didn’t even recognize or at least want to admit that New Orleans had an affordable housing crisis until unintended targets couldn’t afford to rent or buy a decent place in New Orleans either. All of a sudden, leaders and experts want to make clear that “affordable housing” is not just subsidized housing or housing for the poor. Now that people who earn good wages and salaries can’t afford to live in the Big Easy, we really have a problem. Uh…ever consider that we wouldn’t have to worry about how “hard-working, middle-class, good-wage earning” New Orleanians could afford to live here if we would have given a damn about how “hard-working, poor, low-wage earning” New Orleanians could afford to live here too.
Nonetheless, here we are smack in the middle of this crisis. And the men and women that returned to New Orleans and remained in New Orleans, managed to hang on to homes and even invest in a property or two are threatened as the campaign mounts against STRs. It’s clear that the big-time developers want it all.
Why else would they take time from their busy schedules to sit in on a neighborhood meeting at the Corpus Christi auditorium where attendees were spoon-fed, perhaps even force-fed, a false narrative about the big, bad STRs? Why else would they reach into their deep pockets to fund organizations—one to the tune of more than $400,000 in 2017. By the way, there is no hard data that points to the claims STR opponents have made. There is nothing that indicates that crime or nuisances have increased in the communities where STRs are located. There are no statistics that categorically point to STRs as a cause of the affordable housing crisis. In fact, although about 4000 STR licenses have been issued, only about 2100 are in use, roughly 2.1 percent of the city’s housing stock.
These anti-STR groups only feign concern about the city’s “mounting housing crisis”? To all of the self-righteous anti-STR folk now clamoring about neighborhood integrity, the culture of the city and housing affordability, where were you when public housing residents—mostly Black women and their children—were mocked with blown kisses and tossed to the wind?
By 2015, more than $543 million had been invested in the construction of about 7,500 housing units in the decade following Hurricane Katrina. So why does New Orleans still desperately need housing that its citizens can actually afford? Why? Because developers have been busy building housing for the people they want to see in New Orleans as opposed to the people that are here. New Orleanians is demographically richer and whiter than it was before August 2005. Ah, but it seems someone didn’t think this thing through; and NOLA still is not rich enough or white enough for a charter school teacher to afford $2500 month for a decent three-bedroom apartment or the mortgage on a $500,000 house in the ever-gentrifying 7th Ward or $300,000 for a modest 1,500 square-foot cottage in Broadmoor so their family of four can live comfortably. That’s why we have a crisis.
And all of this has transpired as the city’s leaders watched and approved development after development. It transpired as greedy outside interests and even some close to home took advantage of a ravaged city, gobbled up property to resale at inflated costs. Now, those same developers with their “build it and they will come” mentality are using smoke and mirrors to blame STRs with one hand, then turning to ask for more corporate welfare with the other so that they can build more tony hotels and more high-priced condos, penthouses and so-called luxury rentals that are out of reach of regular folks. Thanks you, BGR for lending your influential voice in opposition to such plans.
Give us a break!
If STRs are outlawed and small property investors are forced to sell their real estate, the indigenous people that have been and are being driven from their “land” will not benefit. Their neighborhoods will continue to gentrify and be priced out of reach.
But thankfully, the CPC has stopped for a minute to give more thought to the issue. Lots of suggestions are being made, including requiring a homestead exemption in order to have a property licensed as a short-term rental. Okay, let’s think about that. Y’all know full well that local residents are using their homestead exemptions for the homes they live in. They want STR licenses for a few investment properties. To require a homestead exemption to use a property as a STR is the same as prohibiting locals from the industry. It will shut out nearly every small-time property owner that calls New Orleans home, leaving only a handful of folk that claim homestead exemptions on small multi-family units, like duplexes. The rest of the STR operators will be out-of-town and out-of-touch corporations and big-time developers. Once again, big business wins. And that’s great for the one percent. Giant corporations will have a lock on the industry, while the people we see every day will have to go back to figuring out how they can afford mortgages, insurances, taxes and maintenance costs on a handful of properties without charging astronomical rent that many New Orleanians couldn’t afford any way. In other words, stopping regular folk from benefitting for the STR industry will NOT fix the city’s affordable housing problem. Local investment property owners will have to put their property on the market for at $2000 a month or more to meet their bottom line, effectively making those units just as inaccessible to local, low-wage and even middle-income earning renters as listing them for $200 a night on Air BnB.
If you want the STR industry to contribute to addressing the issue the answer is simple. Allow both local property owners and corporations to participate; but regulate them accordingly, with rules that fit each situation. Create a reasonable cap for what is considered a small STR operator and one for what characterizes a larger operator as well. Be fair and practical. A developer that constructs a downtown apartment complex then converts nearly all of the units into STRs is a hotelier, not a short-term rental operator. The rules you should be working on now ought to focus on preventing that from happening…again. It is unfair and unrealistic to have rules that apply to a local owner with three investment properties and apply those same rules to some real estate giant. That’s how you get one guy with 100 STR units in buildings in the CBD instead of 100 housing units that hotel and restaurant workers could afford. Finally, tax the industry and earmark the revenue to fund policy and programs that support affordable housing solutions.
For full disclosure, the publishers of The New Orleans Tribune are operators of short-term rental properties. And they also fight against gentrification and the deconstruction of their neighborhoods. For every short-term rental that they operate, they offer a quality, affordable housing unit—a full one-to-one ratio. They don’t get tax credits for renting a home at a rate that a hard working mother can afford to pay. They do it for the same reason they began investing in properties decades ago—to preserve the integrity of neighborhoods, especially those that Black New Orleanians have historically called home. And yes, operating a few STRs has now made it more practical for them to offer long-term housing options that locals can afford. But they have always been compelled to help working people remain in their communities without one tax break or inclusionary zoning incentive from the government; and they are going to keep using properties they own to create spaces for locals to live, work and even operate businesses regardless of what ultimately happens to STRs because it is important to them.
Still, we are concerned by any suggestion that would require small-time short-term rental owners to somehow mitigate the affordable housing crisis. This suggestion only makes sense if we are talking about huge corporations that own scores of apartment units, condos and houses across the city. In fact, these are the entities for which short-term rental rules need to be tightened and restrictions placed on the number of units they can own. But for small-time property owners, local residents that have a few investment properties that they are now able to use to help make ends meet, save for retirement, send children to college and otherwise live their best lives, forcing these resident-operators to address an issue that our own city leaders have dropped the ball on would be preposterous. Our leaders have failed to hold the feet of big-time, wealthy developers to the fire when it comes to addressing affordable housing. It would be unjustifiable and absurd to create rules to make, say . . . a retired teacher or police officer with a couple of investment properties on the STR market responsible for bailing New Orleans out of the affordable housing crisis.
In fact, the only thing more absurd than that would be blaming a retired teacher or police officer with a couple of investment properties for the affordable housing crisis.