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Analysis: An unsurprising proposal in the Airbnb debate

December 21, 2018

NEW ORLEANS (AP) — Companies that link tourists looking for a place to stay in New Orleans with homeowners willing to accommodate for a price reacted swiftly to a proposal that would sharply limit the money-making possibilities for some.

City Council member Kristin Gisleson Palmer’s plan, unveiled earlier this month, would still allow people who own their own homes to rent to vacationers, as long as those owners remain on the premises. That’s a requirement seen as key to making sure visitors don’t get too rowdy (some, critics complain, have taken the city’s hard-partying image too much to heart), while making sure that the city’s most popular neighborhoods aren’t stripped of permanent neighbors.

Palmer aims to outlaw whole-house short-term rentals — of homes that aren’t occupied by the owner and that may or may not be owned by a New Orleans resident.

Soon after Palmer released her proposal, HomeAway issued a statement saying the plan would “devastate” some New Orleans property owners who depend on vacation rentals, and that it was unfair to property owners who have been playing by the rules.

Hours later came Airbnb’s statement, similarly critical of the damage that would be done to property owners and the tourism economy, and accusing Palmer of having crafted it “in a backroom.”

The “backroom” accusation was a little much. Palmer represents neighborhoods that are tourist favorites, including the French Quarter, where a ban was already in effect, the Treme and Marigny neighborhoods. She made clear when she took office that constituents were unhappy with a proliferation of short-term rentals, fearing they were contributing to higher property values (and, thus, higher taxes), and depletion of full-time residents with a stake in neighborhoods’ safety and cleanliness.

There have been public hearings and a study by the City Planning Commission and a unanimous City Council vote for a moratorium on the issuance or renewal of whole-house short-term rental license. So Airbnb had a sure signal that this was coming.

There are debates, hearings and studies yet to come. A final vote by the council isn’t expected until April and champions of whole-house rentals are sure to keep pressing their cases.

And they have some compelling arguments:

“Every one of the properties that I own, whether it’s on the short-term rental market or the long-term rental market, I’ve brought back to commerce,” developer Alex Ramirez said in an August interview, arguing that the city shouldn’t clamp down on a tool to fight blight.

Others argue that whole-house rentals provide an affordable alternative to hotels, thus boosting tourism.

New Orleans is hardly unique in this debate. Opponents of Palmer’s proposal note that San Diego recently repealed regulations barring short-term rentals of second homes. As if in answer, the group AirbnbWATCH, with supporters including the American Hotel & Lodging Association (hoteliers tend to take a dim view of Airbnb), countered with a release heralding Los Angeles rules that allow home-sharing, but not whole-home rentals.

Questions certain to arise in New Orleans: How will the new rules affect overall property values in the city? Can exceptions be carved out to allow whole-home rentals in blighted, less popular areas? Will the online platforms, if they can’t stop the council from adopting limits, try to counter them at the state Legislature?

And will the new rules help with New Orleans’ dearth of affordable housing? Palmer’s proposal includes regulations affecting short-term rentals in commercial areas, including some where large-scale vendors of short-term rental units will have to also provide affordable housing.

So, might a relatively low-wage worker in the New Orleans hospitality industry — say, a hotel employee — someday find an affordable place to live in the city, thanks to a short-term rental operation?

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EDITORS NOTE: Kevin McGill is a reporter for The Associated Press in New Orleans.

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