New Orleans City Council Approves One-Year Ban on Commercial Short-Term Rentals: What It Means for You

The landscape of New Orleans short-term rentals has faced a significant shift with the latest decision by the New Orleans City Council. As of June 8th, 2023, the council has enacted a ban on new permits for commercial short-term rentals in the city's commercial districts.  To watch the full discussion, check out the video at the end of this page.

New Orleans Short-Term Rentals: The New Regulations

This temporary ban will be in place for one year and takes effect immediately. This marks a major change from previous regulations, which had allowed short term rentals in commercial zones to obtain licenses, even as the City revised the process for short term rentals in residential areas.  This new rule aims to slow the spread of short-term rentals while officials are in the process of revamping the rules for commercial short term rentals.

The implications of the ban are far-reaching, especially given the city's concern over developers converting large apartment complexes into short-term rentals. The change is projected to influence investment decisions in the short-term rental market in New Orleans.

How the Ban Affects Existing and Pending Permits

Existing short-term rental permits - which number nearly 1,200, as well as the 560 pending applications recorded in the city's short-term rental registry, will mostly be unaffected by the new legislation, according to reporting by NOLA.com. 

How this Ban Affects “New” Permit Applications for Commercial Short Term Rental Licenses

New CSTR Licenses on hold

If you were planning on filing a new commercial short term rental application, the recently enacted ban means you'll need to put your plans on hold while this Interim Zoning District is in effect. 

What is an IZD?

As explained by the City Planning Commission, this Interim Zoning District supersedes other zoning measures, such that new Commercial STR licenses would not be allowed, even if they would have otherwise been allowed under the existing zoning: 

“These IZDs are temporary in nature and supersede the other zoning regulations that apply to a property.  Thus, properties that are otherwise eligible to be used by a Short Term Rental or Bed and Breakfast may not be allowed to be used in that way due to the IZD.”

- New Orleans City Planning Commission, “Overview of Interim Zoning Districts affecting Short Term Rentals and Bed and Breakfasts”

Bed and Breakfast IZD

This ban comes on the heels of a similar Interim Zoning District, the “Bed and Breakfast interim Zoning District,” which also applies city wide and changes Bed and Breakfast use to a “conditional” use where those uses previously had been allowed.  The purpose of the Bed and Breakfast IZD was to discourage people who would have otherwise applied for a Short Term Rental license from applying for a Bed and Breakfast license instead.  See City Council Motion M-23-59 (passed Feb. 2, 2023) (link). 

Neither of these two IZDs affect the rights of those who want to apply for hotel licenses.

Future of Short-Term Rentals in New Orleans

With this temporary halt, the City Council aims to revamp the rules for commercial short-term rentals comprehensively. They are awaiting recommendations from the City Planning Commission due in September. As we wait for this next phase of regulations, the short-term rental landscape in New Orleans is set for more changes.

Conclusion

The recent changes to New Orleans short-term rentals law could have significant impacts on investors and business owners in the industry. As more developments emerge, we'll keep you updated on the latest news and what it means for your short-term rental business. Remember, we're here to help you navigate these changes - don't hesitate to get in touch.