NEW ORLEANS — On Feb. 28, a federal judge issued a ruling that upheld short-term rental regulations enacted by the City of New Orleans in 2023. That decision could end a five-month period when there was essentially no oversight of individuals or companies renting private homes or rooms for brief periods (less than a month) on platforms like Airbnb and VRBO.
The decision from U.S. District Judge Ivan Lemelle is a win for the New Orleans City Council, affordable housing advocates and others opposed to the short-term rental industry. Many in that camp complain that the rise of short-term rentals has spiked housing costs and damaged quality of life in neighborhoods, especially in the city’s popular tourist areas.
Lemelle’s decision will likely be appealed by the plaintiffs, led by lawyer Dawn Wheelahan. In the meantime, the city is free to enforce rules passed in 2023 that limit the number of short-term rentals allowed in residential neighborhoods and bans corporate ownership of rentals. The rules only apply to properties with residential zoning.
“We’ve been fighting from the beginning to stop corporations from taking over our residential neighborhoods, and this ruling vindicates our efforts to protect New Orleanians,” said Councilmember-at-Large Helena Moreno in an email statement. “The ruling upholds and endorses our reasonable regulations on STRs we instituted last year and I appreciate the court’s careful consideration of this case.”
The city’s next move is unknown, but Mayor LaToya Cantrell’s press secretary, John Lawson, said news is coming soon.
“The Department of Safety and Permits is currently working with the Law Department to understand the full implications of the judgment and chart a path forward,” he said. “The department will be releasing additional guidance for the public on enforcement and licensing.”
Wheelahan, the plaintiffs lawyer, said the ruling contradicts a U.S. Supreme Court precedent that says cities “may not eliminate from the market popular products that are disfavored by a vocal minority.” But the judge rejected her arguments and upheld nearly all provisions of the city’s rules, including a limit of one permit per square block and a lottery to award permits in blocks with more than one applicant. There’s also a live-in operator requirement.
The rules have been suspended over the last five months since Lemelle granted the plaintiffs a temporary injunction. Housing advocates and local officials said there’s been a spike in unregulated STRs during that time.
Click here to read the entire court document.
