The Tourism That Broke The Camel’s Back

By McKenna Smith

In a city known for its raucous spirit, the streets of New Orleans have been unnervingly quiet in the wake of the COVID-19 pandemic. Neighborhoods like Treme and the Marigny, that are home to an especially high concentration of the city’s Airbnbs and consequently, a great deal of the city’s tourists, now seem desolate. “It’s kind of eerie,” said Ashley Robinson, a long-term New Orleans resident, “most of these houses now are completely empty.”

New Orleans, like many other cities, is facing an affordable housing crisis and the question of sustainable housing lingers. In the shadow of the coronavirus and the subsequent decrease in tourism, short-term rental (STR) groups and their hosts must now answer the same question: is this sustainable? 

“The shared understanding of what our neighborhoods exist for is important when you’re talking about sustainability over time,” said Professor Casius Pealer, Director of Tulane’s Master of Sustainable Real Estate Development. “If it happened one or two houses every block you know probably we wouldn’t hear about it but when you go to some neighborhood and it might be 30% of the houses in an area that’s a different question.”

The city sees roughly 18 million tourists in a typical year and housing them all has become a major issue for New Orleans and its residents. Airbnb and other short-term rentals companies have sprung up across the city and have been widely contested by the city’s locals who are concerned these platforms pose a significant threat to their most historic neighborhoods. “Neighborhoods are losing what makes them special, which is the people,” said Andrew Sullivan, Chief of Staff to Councilwoman Kristin G. Palmer who has taken the lead in the fight for sustainable tourism.

“The writing was on the wall with what was going to happen and what did happen especially here,” said Robinson. It’s an old story — low-income households are pushed out of neighborhoods in the pursuit of individual financial gain. “It’s been a bloodbath for this neighborhood,” said Robinson regarding Treme, one of the city’s most historic communities. “There is a street around the corner and of the twelve houses available, nine are full-time Airbnbs.”

According to the Jane Place Neighborhood Sustainability Initiative, a New Orleans-based organization whose mission is to support residents in their fight for housing equality, “Over the past two years, the geographic concentration of STRs has shifted away from neighborhoods more commonly associated with tourism (such as the French Quarter and the Marigny), towards the CBD and many working-class Black neighborhoods that are close to downtown, particularly the Seventh Ward, Treme, and Central City.” These neighborhoods are being substantially impacted by the commodification of once residential neighborhoods, as tourists take over entire blocks. 

“Many of the short-term rentals not a hundred feet from me are ten person Airbnbs,” said Robinson. “I’ve never had so many people vomit in my garbage can before.” 

“It can be, certainly, a more authentic feeling experience than a hotel,” said Pealer regarding short-term rental stays. There is, however, the other side of the coin in which “we [New Orleans] also host our fair share of bachelor and bachelorette parties and sort of people who come down here and think that New Orleans is a place where anything goes and they treat their short-term rental as a sort of a party hub, and it impacts the surrounding neighborhood,” said Sullivan. 

This past December, legislation went into effect that aims to combat some of the deeper problems these platforms can both cause and attribute to such as gentrification, the displacement of residents, and an increase in overall housing costs. 

The Jane Place Neighborhood Sustainability Initiative released a report in 2018 on some of the most damaging effects short-term rentals posed to the city. According to their findings, “Large-scale STR operators, many of whom are based outside of New Orleans, are essentially running scattered-site hotels.” They found that “Eighty-two percent of Airbnb listings are for whole-homes” and “Just 11% of STR operators control nearly half of all permitted STRs in the city.” 

This means that not only are these whole homes unavailable to locals, but the money is being poured into the pockets of only a few people. “It’s also an opportunity to talk about the relationship between profit and people being driven by money, not unreasonably, but still in a way that maybe doesn’t align with our broader sense of what it means to have a home,” said Pealer.  

“The commercialization of residential property causes a whole bunch of problems,” said Sullivan. “If you look at where a lot of the short-term rentals are located, they’re really within the historic neighborhoods close to the urban core which means a lot of real-estate is getting bought up near our job centers,” which also happen to be tourist hotspots.

The new regulations colloquially referred to as the “Palmer Ban,” address some of the core issues of short-term rental operation in New Orleans. “What I cannot get around is how we have regulation for one service and no regulation for the same service as long as it’s done online,” said Robinson concerning the lack of either regulation or policing surrounding short-term rental. “The only thing that can make your house profitable at this point is pillaging the neighborhood and pimping it out for a thousand dollars a night.”   

These short-term rental properties exist in a grey area between residential and business which has protected Airbnb and other groups from obligations such as ADA compliance and fire-safety restrictions. As many of their hosts struggle under the current shelter-in-place order that has limited travel and significantly impacted the profitability of short-term rentals, Airbnb has petitioned the government to include short-term rentals in its federal aid package. Its website encourages hosts to apply for small business grants and loans. But by defining these properties as businesses, long-term implications might arise in terms of New Orleans zoning laws and the legality of short-term rental operation in neighborhoods in a post-COVID-19 environment. 

“In theory, if I have a residential house I can’t open up a business out of that and operate,” said Pealer. “Basically because of the online informal nature of it [short-term rentals] people were operating a business out of their homes or not even living in their homes and operating a business.”

The new legislation requires all operators to have a homestead exemption, meaning the home must be the primary residence of its host. Additionally, in areas such as the French Quarter, these short-term rental companies have been banned completely. 

However, these regulations have yet to have any real effect on either the city or its tourist-based economy due to the unsolved December cyber-attack in which important files were lost containing information concerning the discernment between illegal and legal short-term operators. Many of the city’s residents were in full support of the new legislation.

To the dismay of those in favor of new legislation, large numbers of short-term rentals still operate illegally within the city, despite the new requirements. “This is a tourism city but this is my neighborhood and if I wanted to live next to a hotel, I would have bought in the warehouse district,” said Robinson.  

“There are so many other underlying issues with housing,” said Pealer.  So, Airbnb and other short-term rental groups are not solely responsible for complex and multi-faceted issues such as gentrification, but it seems incredulous to suggest that they have not exacerbated the pre-existing housing crisis New Orleans was experiencing.
There is anxiety over the loss of culture and in some ways, of what it means to live in New Orleans. If “everyone’s a stranger” as Robinson said, how can the close community of porch-sitters and parade-throwers the city is famous for continue to exist? As residents are forced to move due to rent increases, which are a direct result of exorbitant property taxes, which are unreasonable because your neighbor is running a business next door to you, the question of sustainable tourism becomes quite crucial.

The new regulations colloquially referred to as the “Palmer Ban,” address some of the core issues of short-term rental operation in New Orleans. “What I cannot get around is how we have regulation for one service and no regulation for the same service as long as it’s done online,” said Robinson concerning the lack of either regulation or policing surrounding short-term rental. “The only thing that can make your house profitable at this point is pillaging the neighborhood and pimping it out for a thousand dollars a night.”   

These short-term rental properties exist in a grey area between residential and business which has protected Airbnb and other groups from obligations such as ADA compliance and fire-safety restrictions. As many of their hosts struggle under the current shelter-in-place order that has limited travel and significantly impacted the profitability of short-term rentals, Airbnb has petitioned the government to include short-term rentals in its federal aid package. Its website encourages hosts to apply for small business grants and loans. But by defining these properties as businesses, long-term implications might arise in terms of New Orleans zoning laws and the legality of short-term rental operation in neighborhoods in a post-COVID-19 environment. 

“In theory, if I have a residential house I can’t open up a business out of that and operate,” said Pealer. “Basically because of the online informal nature of it [short-term rentals] people were operating a business out of their homes or not even living in their homes and operating a business.”

The new legislation requires all operators to have a homestead exemption, meaning the home must be the primary residence of its host. Additionally, in areas such as the French Quarter, these short-term rental companies have been banned completely. 

However, these regulations have yet to have any real effect on either the city or its tourist-based economy due to the unsolved December cyber-attack in which important files were lost containing information concerning the discernment between illegal and legal short-term operators. Many of the city’s residents were in full support of the new legislation.

To the dismay of those in favor of new legislation, large numbers of short-term rentals still operate illegally within the city, despite the new requirements. “This is a tourism city but this is my neighborhood and if I wanted to live next to a hotel, I would have bought in the warehouse district,” said Robinson.  

“There are so many other underlying issues with housing,” said Pealer.  So, Airbnb and other short-term rental groups are not solely responsible for complex and multi-faceted issues such as gentrification, but it seems incredulous to suggest that they have not exacerbated the pre-existing housing crisis New Orleans was experiencing.
There is anxiety over the loss of culture and in some ways, of what it means to live in New Orleans. If “everyone’s a stranger” as Robinson said, how can the close community of porch-sitters and parade-throwers the city is famous for continue to exist? As residents are forced to move due to rent increases, which are a direct result of exorbitant property taxes, which are unreasonable because your neighbor is running a business next door to you, the question of sustainable tourism becomes quite crucial.

“It’s one thing to have higher property values, that’s great because that might mean there are improvements, but there are no improvements to this neighborhood in the last seven years. The schools haven’t gotten any better, crime hasn’t improved, there have been no huge influx of industry,” said Robinson.  

There is however an unexpected and arguably much more threatening issue than new regulations at hand for short-term rental operators. With one of the fastest-growing rates of COVID-19 in the country, these operators are set to suffer heavy financial losses. As companies like Airbnb rightfully offer no charge cancellations in the face of the global pandemic, their hosts no longer have the opportunity to upcharge neighborhoods. 

Many listings are significantly cheaper than their pre-virus cost and some are even transitioning to long-term rental properties. Although the effects and longevity of such decisions are unclear, there is a possibility that neighborhoods might have a chance to mitigate some of the damage caused at the hand of these online platforms. 

At the moment, Airbnb has moved into a new market, advertising as the ideal way to host incoming frontline workers or even those quarantining from their families. Their website now shows monthly prices for stays available in the city, rather than the typical weekend rentals. The situation is very uncertain moving forward in terms of what this means for New Orleans residential housing and the sustainability of short-term rental groups. But for now, the streets remain quiet, “I haven’t heard a rolley bag in weeks, that was the local sound of Treme,” said Robinson.

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