Court Sets Hearing On New Short Term Rental Ordinances for Airbnb in New Orleans

This post is a quick update of where things stand today on the permits for Short Term Rentals (STRs) like those on Airbnb and Vrbo, in New Orleans, and the lawsuit that has resulted in a pause on the City’s issuance of new permits. 

(Note, this post is based on the information available on Sept. 19, 2023. Things may/will change going forward.)

Background:

You’ll recall that on Aug. 31, 2023, about three weeks ago, the Eastern District of Louisiana federal court issued a Temporary Restraining Order that stopped the City of New Orleans from enforcing the new Short Term Rental Ordinances.  Hignell, et al. v. City of New Orleans, No. 19-cv-13773, ECF No. 202 (E.D. La. Aug. 31, 2023). The Court stopped the ordinances because it wanted time to rule on a lawsuit challenging those ordinances. Shortly after the Court issued that restraining order, it set a hearing date on the challenge to the ordinances, and that hearing was scheduled to happen last week. But last week’s hearing never happened.

Key Point:

The new hearing date for the lawsuit challenging the new STR ordinances is set for Wednesday, Sept. 27, 2023, at 9:00 a.m.

What happened to the old hearing date?

The Court cancelled the old hearing date and set a new hearing date after a second lawsuit was filed. That second lawsuit, Marquardt v. City of New Orleans, challenged the City’s cancellation of the old STR permits as a violation of Due Process. (That’s slightly different that the main lawsuit, which is challenging whether the new laws are legal.)  

Shortly after this second lawsuit was filed, on Sept. 12, 2023, it was consolidated into the main lawsuit. Because the second lawsuit came into the main lawsuit on the day before the court had the hearing scheduled, the Court delayed the hearing date so the parties could consider and respond to the new lawsuit.

When will this be resolved?

We should have a good sense of where this process is heading after the Sept. 27^th hearing.

The primary lawsuit challenging the new STR ordinances will likely have a ruling soon. The parties have filed summary judgment motions back in July. This means that each party thinks they should win based on the law and the undisputed facts. 

It seems that most of the facts here are undisputed, e.g., the City did pass these new ordinances and they say what they say. So, the question is really whether the Court will find all or any part of them unconstitutional. 

These motions have been filed for about two months now, so a ruling should be coming soon. It’s possible that the Court will rule on the summary judgment motions and determine whether the challenges to the new ordinances have merit at the Sept. 27th hearing. However, it’s also possible that the Court will just hear the parties’ argument on that day, then issue a written ruling sometime later. If the ruling does not happen at the hearing, I would expect the Court to issue its written ruling somewhat quickly after the hearing. Note, even if the Court doesn’t rule at the Sept. 27th hearing, we may get a sense from the Judge’s comments where this matter is going. 

For the second lawsuit---the one challenging the City’s sunsetting of the old R-STR permits---that has not been pending in the Court for very long. In fact, the City has not yet filed an answer to that lawsuit. It will likely do so today. So, it’s less likely that we’ll see a substantive ruling on that lawsuit at the Sept. 27th hearing. However, we may see a ruling on a temporary restraining order in that case. One possibility for that case is that the City could be enjoined / stopped from considering the old permits cancelled, giving the Court the time to work out the law on that issue. To be clear, that is not a certainty. It's too early to tell.

Note, if the City completely loses the lawsuit, a few City Council members have introduced motions that would ban STR in residential areas. However, given that those motions will be highly influenced by the outcome of the lawsuit and the upcoming hearing, it is too early to say what effect they may have on this process.

Next Steps

As of right now, the exception process is on pause because of the Court’s previous restraining order. But we may be getting started on that soon after the Sept. 27th hearing.

I’ll update this blog after the Sept. 27^th hearing. In the meantime, please don’t hesitate to reach out to me with any questions on this.