STR New Orleans: Whats your take? (1 Viewer)

[Zack Lee]

City council will supposedly be taking up the topic today. I am admittedly somewhat ignorant on the topic. How much is it really driving up housing cost and driving out residents?

The city lists exactly 214 legal short-term rentals in New Orleans. Inside Airbnb found 3,621 active short-term rentals in the city as of last week.

http://www.bestofneworleans.com/gambit/short-term-rentals-big-time-problems/Content?oid=2935282

 

[gwballin]

I have mixed feelings about it.

On the one hand, I'm generally not a fan of some authority telling citizens what they can and can not do with private property.

On the other hand, as a resident of the LGD I do not like strangers coming and going, partying it up in my neighborhood inconveniencing residents.

There was one house in my neighborhood that was bought and renovated strictly to use as whole home STR. Luckily for me, it is empty more often than not.

I think there is enough anecdotal evidence to suggest that enough people have been displaced from long term rentals/rising property prices to at least have the conversation.

I am currently of the opinion that whole home exclusive STR should not be allowed but I'm happy to allow extra bedrooms to be rented as much as you'd like. But I acknowledge it is not a very strong opinion.

 

[Galbreath34]

STR has destroyed Vancouver, BC's real estate market, or at the very least brought it to crisis. It set off a boom in prices that drew Chinese investment and speculation and has lots of unoccupied housing and a crazy price bubble. It's been a big news topic there for a year or two. They're considering new laws regulating AirBnB and the like, as well as special taxes on non-primary residence foreign owners.

'Severe' disruption needed for big price drop on Metro Vancouver homes, says economist - British Columbia - CBC News
'A chance to compete': How Vancouver
Vancouver's Rental Market: The Disruption Called Airbnb | Vancouver Homes

 

[guidomerkinsrules]

i don't see how this is sustainable
NO will never be able to grow the jobs/salaries to make this a viable long-term part of the economy
there will always be a sizable renter population - rents are currently fairly steep and while i don't remember exact numbers i think i remember something close to 50% of the population spends more than 35% on rent
those numbers need to go in the opposite direction, but with STRs they continue to increase
this effects schools a lot but also local economy and neighborhood development

then what happens when the housing market reverses?

i left NYC right as the Disneyfication was starting - though rents were high, an artist could still afford rentals on the edges of Manhattan. Now any artist who has remained has to live on the very hinterlands of the boroughs
NYC used to be on the cutting edge of most every art form - now there is virtually no new/innovative work being created there
NYC can survive this b/c of many other factors
I'm not sure NO can

 

[NotOnHerb]

I take no issue with someone renting out a spare bedroom or if they want to leave town for mardi gras and rent their house out on a temporary basis. What I take issue with is the people who are buying up multiple properties and running them as tiny hotels.

 

[Galbreath34]

I still don't understand how these "sharing economy" companies are just allowed to decide they're outside the law everywhere. I sort of get the valley getting excited and California just being stupid about their laws and enforcement, but how it spread without legal challenges and issues is beyond me

There are fantastic reasons why we have all the laws we do about taxicabs, restaurants and hotels. From protecting consumers from crime, disease, etc, to required liability protection, to protecting third parties (zoning, etc). That people could just say "I'm not a restaurant, but I'm going to charge people to eat what I cook at home, so no health inspections or liquor licenses need here thank you very much" and get away with it surprises and appalls me a bit. It's pretty much a touchy-feely name for evading laws and using people as free resources/labor to get a chunk for the central company.

For AirBnB specifically, though, it pretty much only benefits people outside the market-place as investors or people who already own homes and want to sell it before moving away to retire. Ultimately it drives up rents and home values in an way that's completely artificial and external to the local economy. Especially for places that have a tourist economy to begin with. All the new investors drive the prices up without jobs or other things going up. It doesn't help homeowners who want to stay in the city really, because if they sell to lock in the real estate gain, they'd have to rent or buy at the new distorted price. It's great if they want to leave town for Iowa though.

Vancouver housing prices at one point were increasing at over 40% per year, so adding another 120k to a 300k house for example. I think in some areas the rents were doubling in a single year. That's devastating for 5th generation families who have children just working middle class jobs. Empty expensive housing doesn't contain people that are hiring employees, paying sales tax, buying groceries or normally participating in the economy. Moreover these empty houses get used to compete with hotels and traditional tourist businesses and help depress the local economy further. You wind up with boosted prices and no way to have residents catch up, and add a great incentive for homeowners and some of your stable citizens to just sell out and move to a new city.

Vancouver is definitely the extreme example right now, but NOLA is one of the few cities I think could really follow that path. Central Florida too maybe. I could see a lot of foreigners thinking it's a great tourist town to invest in for this stuff. These dangers might not exist at all for Dayton or Des Moines, though.

 

[NotOnHerb]

I still don't understand how these "sharing economy" companies are just allowed to decide they're outside the law everywhere. I sort of get the valley getting excited and California just being stupid about their laws and enforcement, but how it spread without legal challenges and issues is beyond me

There are fantastic reasons why we have all the laws we do about taxicabs, restaurants and hotels. From protecting consumers from crime, disease, etc, to required liability protection, to protecting third parties (zoning, etc). That people could just say "I'm not a restaurant, but I'm going to charge people to eat what I cook at home, so no health inspections or liquor licenses need here thank you very much" and get away with it surprises and appalls me a bit. It's pretty much a touchy-feely name for evading laws and using people as free resources/labor to get a chunk for the central company.

For AirBnB specifically, though, it pretty much only benefits people outside the market-place as investors or people who already own homes and want to sell it before moving away to retire. Ultimately it drives up rents and home values in an way that's completely artificial and external to the local economy. Especially for places that have a tourist economy to begin with. All the new investors drive the prices up without jobs or other things going up. It doesn't help homeowners who want to stay in the city really, because if they sell to lock in the real estate gain, they'd have to rent or buy at the new distorted price. It's great if they want to leave town for Iowa though.

Vancouver housing prices at one point were increasing at over 40% per year, so adding another 120k to a 300k house for example. I think in some areas the rents were doubling in a single year. That's devastating for 5th generation families who have children just working middle class jobs. Empty expensive housing doesn't contain people that are hiring employees, paying sales tax, buying groceries or normally participating in the economy. Moreover these empty houses get used to compete with hotels and traditional tourist businesses and help depress the local economy further. You wind up with boosted prices and no way to have residents catch up, and add a great incentive for homeowners and some of your stable citizens to just sell out and move to a new city.

Vancouver is definitely the extreme example right now, but NOLA is one of the few cities I think could really follow that path. Central Florida too maybe. I could see a lot of foreigners thinking it's a great tourist town to invest in for this stuff.

NOLA is heading that way. Since the city has been talking about actually enforcing the laws and it being unclear what types it would allow, real estate has gone stagnant in my neighborhood, which is one of the most popular STR neighborhoods.

Also, just wait till AirBnB goes public and they cash out. I bet you see them not fighting the good fight for all these folks who bought up property to use as STRs. That could really negatively affect the real estate market as many of them overpaid based on income from it being run as a business.

 

[mb504]

Since short term rentals have been illegal this entire time and the law hasn't been enforced by the city, why should we expect that they will actually start enforcing it now?

My guess is that the City Council will end up supporting whatever position allows the city to grab the most cash from selling licenses to owners and taxing AirBnB, regardless of the effect it has on blocks of "hotels" that used to be neighborhoods. When has this city's leadership ever not taken the position that tourists matter more than actual residents anyway?

 

[NotOnHerb]

Since short term rentals have been illegal this entire time and the law hasn't been enforced by the city, why should we expect that they will actually start enforcing it now?

My guess is that the City Council will end up supporting whatever position allows the city to grab the most cash from selling licenses to owners and taxing AirBnB, regardless of the effect it has on blocks of "hotels" that used to be neighborhoods. When has this city's leadership ever not taken the position that tourists matter more than actual residents anyway?

They proposed an $835k enforcement budget. Without enforcement they won't sell any licenses, just look at Portland.

The council members are realizing this is a big issue among most voters. I know someone who is high up in one council member's office and 9 months ago, it was a very different mind set. They saw the fallout that has been happening since Jazzfest when people got very vocal about it and realized that if they want to run for council again, or potentially replace Mitch when he terms out, they needed to get behind the majority of voters.