Local Property Owners Sue City Over STR Rules

Protesters gathered outside City Hall in January as the New Orleans Council debated new Short-Term Rental regulations.

The Alliance for Neighborhood Prosperity filed a suit today in Civil District Court against the city of New Orleans asking for a temporary restraining to bar the City from enforcing new STR rules that expected to be approved at the May 16 City Council meeting. Specifically, the lawsuit seeks to prohibit the ordinance from impacting property owners that obtained licenses and operated legal short-term rentals before the May 2018 moratorium.

The group, mostly comprised of property owners in Orleans Parish who obtained valid permits to rent houses on the short-term rental market prior to the city’s May 2018 moratorium and subsequent changes to the STR ordinances, claims that the city’s new rules will deprive them of their constitutional rights to due process and to “own and enjoy property”.  They are also seeking to permanently stop the city from implementing its new STR regulations that effectively bars them from the local STR market.

A major sticking point of the new STR rules is that property owners with whole-home STR licenses would have to have a homestead exemption for the property and also reside on the same lot. It’s a move property owners say pushes most of them out of the market.

Lately, the short-term rental market has become the scapegoat for the source of the city’s affordable housing crisis. And it seems that the city’s new ordinances has focused an inordinate amount of attention on whole-home rentals, disproportionately impacting local property owners in the process.

Short-term rental proponents are quick to point out that many of whole-home property owners on the STR market are people who live in the city and are now able to augment their income, better maintain their property, pay taxes and contribute to the economy because of short-term rentals. They welcome regulations that provide safeguards and guidelines for the industry, especially the sort that would limit the amount of STR units owned and operated by out-of-town corporations, but they are vehemently opposed to being told how they can or cannot use their property.

However, the ordinance set to be considered by the Council next week favors commercial STR licensees—the sort that operate hotel-like buildings filled with scores of units leased as vacation rentals while ousting local individuals with residential investments in their neighborhoods and community.

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