NEW ORLEANS — It's being considered a victory for the city council and people who criticized the abundance of short-term rentals in Orleans Parish.
Wednesday, a federal judge ruled that most of the restrictions the city council voted in nearly a year ago, could stand.
The ruling out of U.S. District Judge Ivan Lemelle's court could force people who have bookings for upcoming festivals, and even next year's Super Bowl to find another place to stay.
And people who own short-term rentals, now have some clarity on how to move forward.
Councilman JP Morrell says the courts basically agreed with city regulations on short-term rental properties.
“For the most part, the vast majority of these rules, and this is dozens upon dozens of rules that we passed as a council, he upheld all those,” said JP Morrell, New Orleans City Council-at-Large.
There is still only one rental per square block that will be determined by a lottery, but there can be as many as three per square block, if owners go through the exception process, getting neighbors' approval. What is changing is now certain owners who were excluded from the lottery, can now be part of it.
“The wrinkle that the judge did put in, is that we previously prohibited usufruct, and trust from holding a permit. He says they can hold a permit. So, that will be something that will probably lead to us having to redo the lottery,” he explained.
There will also be a change in the timing of when permits will be issued.
Read the complete ruling in the court document below:
Enforcement has been paused since last August during the litigation, but the councilman says to beware if you have been operating illegally during that time.
“For those people who have never had a permit and have never listed legally, they are going to get immediate cease and desist orders,” he said.
And he says there are easily two to three times the number of listings on the internet than there are permits. So, there may be people who think they have a place to stay for the French Quarter Fest or Jazz Fest, who will be disappointed when the owners’ properties are shut down.
“I have zero sympathy for people who have been operating illegally this whole time, and took this opportunity during the pause to operate illegally.”
In the meantime, he understands that insurance and taxes are sky high and believes the city has made a pathway for honest operators to earn extra money, but he says there were too many out-of-state investors gobbling up homes.
“There's a plethora who own swaths of residential property purely to create mini-hotels and mini-motels, cities are meant to be lived in not meant to be Disneyland. And we crafted ordinances. We crafted the process to protect neighborhoods, not to protect investors,” stressed Morrell.
Mike Humphrey, Managing Broker of McEnery Residential, says realtors are still waiting for expert attorneys to give an interpretation of the ruling.
Meantime, the process has been frustrating for property owners who need rules that are easy to understand, aren't constantly changing, and equally, and evenly enforced so they can move forward.
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