By Georgia Asmar
The eruption of short-term rentals has sparked fiery tension among members of the community in the city of New Orleans. The presence of short-term rentals has sent authentic neighborhoods up in flames, covering most residential areas in its debris of tourists. Airbnb is a website that fuels a marketplace for home sharing and serves as a transactional link between travelers and providers. The growing popularity of Airbnb users in New Orleans has detonated a heated debate over the legitimacy of these rentals, especially in regards to whether they’re operating legally or not. The decision to ban or allow the existence of short-term rentals in New Orleans is unclear, due to the divide of those in favor and of those against short-term rentals.
“It threatens to destroy everything that preservationists and neighborhood activists have worked for with zoning and rehabilitation and life remediation and getting people back in neighborhoods. It’s all threatened to be destroyed,” said Meg Lousteau, the director of Vieux Carré Property Owners, Residents, & Associates (VCPORA), a group dedicated to the preservation of historic neighborhoods
The impact Airbnb has on neighborhoods is more than just the increase of tourists coming in and out of neighborhood homes. It’s about the destructive effect it has on the community. “You might want actual neighbors,” said Lousteau, noting the increase of homes being turned into hotels. Speaking for those who are concerned for the future of their neighborhoods she said, “They don’t want to live in a hotel, they want to live on a block where they have actual neighbors. They want to be able to leave a key with a neighbor, or know that the guy banging on their door is one of their abusive ex-husbands, or just the things that neighbors know. Tourists, as nice as they might be, don’t know.”
It’s about the sharing economy of private homes, the expense it has on the housing market and neighborhoods effected by rising values of rental homes. “We have very few full time residents in New Orleans, their numbers are dwindling and the dwindling is accelerating because this [Airbnb] is accelerating,” said Lousteau. Neighborhoods are becoming less residential and more commercial with the influx of tourists renting private neighborhood homes and the rising amount of operators.
Jim Uschold is a lawyer with the Alliance for Neighborhood Prosperity, a lobby group in favor of short term rentals. He believes that enforcement of short term rentals should be complaint based. “The problem now is that most of the enforcement complaints I have heard of is people complaining about the mere existence of short term rentals.” People like Lousteau who say that short term rentals are destroying the neighborhood’s civic engagement by bringing in tourists and ruling out residents are among those who have placed complaints. Uschold said, “I don’t personally buy the ‘I have a right to know my neighbor’ argument.” Uschold also spoke on behalf of the tourists coming into neighborhoods and renting homes. “The city council is supposed to regulate how land is used, not who uses land. The city shouldn’t discriminate on you for being an out of towner.”
The question to whether short term rentals are the sole reason for rising property taxes and insurance rates is unclear. Many people believe that it brings more money into the rental market by allowing more homes to be rented. “One of the biggest complaints in the neighborhoods is that it is causing rents to go up. I think that’s an absurd notion,” said Jim Uschold. “Rents are going up because insurance costs a lot more, and you gotta pay more insurance, then property values go up. If property values go up taxes go up, and you also got your insurance deductibles going up.” He agreed that rents are rising, but to him that doesn’t mean anything in regards to short-term rentals. To him, “The reason rent is going up in the more favorable neighborhood is because that’s where people want to live.”
One of the board members of the Alliance for Neighborhood and Prosperity, Eric Bay, is also a short-term rental operator. He is aware of the issues regarding the legitimacy short-term rentals in New Orleans and said, “There are good operators and there are bad operators. We want to pay a fee to get licensed, pay attorneys to draft ordinances to become permitted, regulated, legalized, and remit taxes.”
As a single dad with a single income, he first became involved with the short-term rental market to generate extra income on the side. Unable to afford the mortgage on his historic home, he transformed it into a short-term rental where visitors freely enjoy the authenticity of his New Orleans private home. “When I first did it my first year, I got a 1099 fed form from Airbnb, the revenue is reported to the IRS, I have to pay my federal income tax,” Bay said. “We’re employees basically, or subcontractors. If you get a 1099, you have to claim that on your taxes because the federal government has already gotten it,” said Bay.
Its fairly easy to operate a short-term rental. Airbnb’s website provides an easy way to connect travelers to hosts, and reveal information about the travelers and the hosts. One who wishes to operate a short-term rental simply has to sign an agreement to pay a federal 1099 form, which allows for most operators to be insured.
Bay boasts about the relationships he has with his guests, saying that he can tell the story and history of every guest that has stayed in his home. He communicates freely with his guests, and gives them recommendations on where they should eat or places to see. “It’s an experience most people aren’t going to get,” he said. “I’ll tell them go see Johnny Blancher at Rock n’ Bowl, or go see Hank Staples at the Maple Leaf,” he continued to add “I’m a host and I am also helping them shape their experience, also being a tour guide, and an extra set of hands.” Bay talks about the authentic experience visitors receive when they stay in short term rentals, opposed to those who stay in hotels. He mentions the expensive costs hotels come with, and the lack of sincere service. He acts like a concierge, except he doesn’t receive a tip for every restaurant or tour guide he recommends. “You’re going to get better food, better deal, better service, and a truly better New Orleans experience,” he added.
“They’re using you as a shill to cover up what their real business model is, which is wealthy investors and corporations now buying entire houses to turn into hotels with no regulations and taxations,” Lousteau adds. In doing so, they’re paying property taxes on residential use instead of commercial use, thus profiting illegally.
“It’s different for them because it’s a sharing economy. Please do not tell me that you’re doing this out of the goodness of your heart, you’re doing this to make money,” said Lousteau. People from ANP, like Bay, who support the increase of short term rentals, are very tight-lipped according to Lousteau. “They cloak it in happy language about visitor choice and sharing New Orleans.” said Lousteau. She then added, “This isn’t sharing, this is selling. This is commodifying culture and commodifying our neighborhoods. It’s not conductive to strong civic engagement.”
“They’re able to operate so cheaply because they’re totally unregulated.” Opposition groups and organizations, like VCPORA, urge for City Council to regulate and enforce laws that short term rentals clearly violate in the city of New Orleans.
Recently, a short-term rental caught fire. The short-term rental not only lacked a fire alarm, but also had bars that barricaded the windows, preventing them from being able to escape. If the Fire Department had arrived any later, those men could have burned to death.
“It usually takes someone dying a horrible death to get a reaction,” said Lousteau. “We have been begging for enforcement, please don’t let it take someone dying to address this issue.”
Others, like Jim Uschold see this near tragedy as an everyday, practical accident. “I think that could have been a tragedy, on the other hand it wasn’t. Should there be inspections? I don’t think it’s necessary, the code of enforcement should have something going on.”
In response to the fire, City Council has proposed a bill that would require all short-term rentals to be inspected and registered by the State Fire Marshal’s Office.
In addition, opposition groups draw attention to the land use policy and their violation of local zoning laws. “Legalization has to be coupled with data sharing, not just data sharing with the regulators, but data sharing with the public,” said Lousteau. “We are insisting that any legalization be accompanied by a publically available database, it needs to be out there with the physical location of every legal short term rental, the name of the owner, and the name of the operator because they’re not always the same people,” added Lousteau.
Airbnb is valued at $11 billion right now, with roughly 750,000 people staying in an Airbnb rental every night. “In any city, but especially New Orleans, there is such a resistance to change. Change is bad,” said Bay. Opposition groups who are against the acceptance of short-term rentals challenge companies like Airbnb and demand public data recording the changing neighborhoods of New Orleans. Bay said, “We’re not hiding anything, we’re not hiding revenue. The data is available from Airbnb, you can go on Airbnb and see every place listed.”
Supporters of short term rentals, like Eric Bay, understand opposition groups and their concerns. He and other board members of ANP and people like Jim have been conceding with their complaints, however every time they try to reason with opposition groups, there is always another protest or another grouse to appease with. Bay refers to the opposition groups as “Citizens against everything.” “We’re trying to meet all the reasonable gripes, get regulated, pay money to the city, collect taxes, level the playing field, and ultimately make the whole process easier and safer for people coming to the city because they’ll be staying in a licensed establishment.”
Since the city of New Orleans has yet to reach a final decision regarding the legalization of short term rentals in New Orleans, these opposition groups have chosen to take action themselves. However, because the city is corrupt and broke, there’s no enforcement of codes and regulations on short-term rentals that hotels and bnb’s have to abide by, such as complying with local zoning laws, leases, insurance costs, and taxes. Instead, they allow for the operation of such rentals because of the money it reigns in for the city. Think: tourism industry.
Therefore, until any official laws are put in stone, short-term rentals will continue to operate and people will continue to use them. People like Lousteau that say, “There isn’t any debate about this,” and deny any good coming from the legalization of short-term rentals, have a lot of fighting ahead of them. To people like Lousteau, Eric Bay says, “You can’t kill us and you can’t chase us away, we haven’t taken that cocky attitude.” Earlier in April, Lousiana passed the state “Airbnb Tax,” which is just one of the many steps necessary to for operators to move forward, legally. On that note, Bay’s power of persistence has made pivotal progress for the legalization of short-term rentals.
Georgia Asmar is a junior studying English at Tulane University.