City Council Reviewing New Orleans AirBnB Regulations
Back in July 2018, the New Orleans city council hit the pause button on new permits and renewals for most whole home STRs (short term rentals) in the city. The moratorium is directed primarily at homes in residential neighborhoods – which is pretty much the entire city.
Under consideration now is the requirement that owners of STRs must live on the property and claim a homestead exemption. This change would result in a significant number of properties no longer qualifying for STR licenses. According to a report from Jane Place Neighborhood Sustainability Initiative, about half of the current STRs are controlled by 20% of the operators.
What does this tell us? That there are a handful of people and/or corporations running the majority of the STRs in town, with some (ie, a lot) of them not even based in New Orleans.
If the rules under consideration are passed, what is the likely outcome?
In our opinion, the properties that were bought up by corporations will start to be dumped onto the market if they can no longer provide the cash flow that STRs have brought them. Depending on the number of homes that are listed for sale at the same time, we anticipate lowering property values in the neighborhoods that have been most impacted.
What neighborhoods are at highest risk of falling prices?
With the highest concentration of New Orleans AirBnB listings, these are the neighborhood values that are most likely to drop if the city council implements the proposed changes.
- Marigny and Bywater, below St. Claude Avenue
- Treme
- Lower Garden District
What if you’re considering a move?
Sellers need to seriously think about what a drop in prices would do to their net profits should they wait to sell. If you know you’re going to be moving, consider selling sooner than later, before a glut of homes hit the market in a short time.
Buyers in these neighborhoods, however, would be well advised to perhaps wait a few weeks for the results of the decision. It could mean a huge difference in not just the availability of homes for sale, but also a difference in pricing that could allow them to buy more house than they can currently.
Is any of this set in stone? Not a chance. It’s New Orleans, after all. Developing crazy solutions that no one thought were possible has happened before and will happen again. This is just our best guess as to the possibilities.
