Council Members Morrell and Harris have introduced a one-year ban on new licenses for Commercial Short Term Rentals (“CSTR”) and Hostels, which is scheduled to be voted on at the next Council meeting, on June 8th. The ban, put forward in Motion No. 23-208, would establish an Interim Zoning District (“IZD”) that would apply across the entire city. The amended version of that Motion can be found here.
With this ban, the Council is looking to stop new Short Term Rentals (“STRs”) during the period that it has given the City Planning Commission to study what changes to make on the regulations concerning Commercial Short Term Rental licenses. Recall that the Council is overhauling the City’s regulations of Commercial Short Term Rentals now that it has finished passing the new rules for the Residential Short Term Rentals.
In support of this Motion, Members Morrell and Harris cite, “a noticeable uptick in the conversion of apartment complexes from long-term housing to transient housing.” They also complain that “commercial short-term rental developments are bypassing zoning regulations aimed at addressing the proliferation of commercial short-term rentals by designating the development as a hotel or other transient lodging but then advertising the units exclusively as short-term rentals.” (NOLA.com reported about one deal to convert long term housing to STRs that happened right by city hall, here.
While this proposed ban on new commercial Short Term Rentals might be aimed at big developments, it will affect single unit buildings and small-scale investors just the same. If you own a property in New Orleans with the zoning that would allow it to be a Commercial Short Term Rental, there are at least two key restrictions that this ban would create:
As originally written, this ban would have applied to projects that had already obtained a building permit based on plans showing that the project would be used as a Short Term Rental. The result would have been that in-progress projects would no longer be allowed to receive licenses to operate as a STR. See New Orleans City Council Motion No. M-23-208.
Just before the last City Council meeting, however, C.M.s Morrell and Harris proposed an amendment to exempt already-permitted projects.
See
Amendment to Motion M-23-208 (May 25, 2023). The amendment also ensured that the ban did not apply to new hotels or motels.
The Amendment to M-23-208 also proposes to limit the development of Timeshares by instituting a cap of no more than one or 25% of the total dwelling units to be permitted to be included in a Timeshare Plan within a Timeshare Building. And there is an exception in the Central Business District for areas with CBD-5 zoning providing that Timeshare Buildings will only be permitted if there are 10 or more dwelling units, such that Mandatory Inclusionary Zoning is triggered and Affordable Housing Units are required.
We understand that this proposed ban will be heard and voted on at the next New Orleans City Council meeting on June 8th, 2023 at 10:00 a.m. Confirmation of the hearing date will be provided when the agenda for that meeting is issued. You can find the agenda on the Monday or Tuesday before the meeting on the City Council website, https://council.nola.gov/home/.
To contact your City Council Members about this motion, you can find their information at
https://council.nola.gov/councilmembers/.
To schedule a consultation with the Stow Firm about how this ban would affect your Short Term Rental business, visit our
Contact page.