Short term rentals, also known as vacation rentals, have become increasingly popular in recent years with the rise of online booking platforms like Airbnb and VRBO. However, the legality of short term rentals varies from city to city, and in destinations like New Orleans, the rules and regulations governing short term rentals are complex. In this article, we’ll break down the current laws regarding short term rentals in New Orleans and provide key information for hosts and travelers.
The history of short term rental regulations in New Orleans
New Orleans first began regulating short term rentals in the 1970s by restricting them to a few designated zoning districts. However, enforcement was lax and short term rentals began proliferating outside of the designated zones. In April 2016, the New Orleans City Council approved legislation that attempted to legalize and expand short term rentals citywide, while also implementing a permitting system and restrictions.
However, many residents pushed back against this, arguing that short term rentals were disrupting neighborhoods and pricing out long term tenants. In May 2017, the City Council reversed course and passed even tighter regulations that banned whole home short term rentals in residential areas.
After a long debate, the most recent regulations were passed by the City Council in August 2019. The key provisions of these current regulations are explained below.
Current short term rental rules in New Orleans
Under the regulations passed in August 2019, here are the basic rules around short term rentals in New Orleans:
- In residential districts, short term rentals of whole homes are prohibited. Only owner-occupied units can be rented out short term in residential areas.
- In commercial districts, whole home short term rentals are allowed with proper permitting.
- A short term rental is defined as a rental of less than 30 consecutive days.
- Anyone operating a short term rental must apply for a permit, which costs $200 annually for residences or $500 annually for commercial units.
- Short term rentals can only be operated in dwellings that are the host’s primary residence and where they live at least 270 days per year.
- Units used as short term rentals must pass safety inspections related to fire, building codes, and noise ordinances.
- Homes that operate short term rentals without permits can be fined up to $500 per day.
In summary, whole home short term rentals are banned in residential areas but allowed in commercial areas with a permit. Owner-occupied units can operate short term rentals legally with a permit.
Areas where short term rentals are allowed
Under the New Orleans short term rental regulations, only certain areas of the city are open to whole home short term rentals. Here are the areas where whole home short term rentals can operate legally with a permit:
- The Downtown Development District
- Business and Mixed-Use zoning districts
- The Warehouse District
- The Lafitte Greenway
- The Laketown neighborhood
- The Lake Catherine neighborhood
- The Milneburg neighborhood
Essentially, short term rentals are allowed in commercial areas, mixed-use areas, and certain designated neighborhoods. A map of the New Orleans zoning districts can be found on the city’s website.
Exceptions to the short term rental rules
While whole home short term rentals are banned in residential districts, there are a few exceptions in the New Orleans regulations:
- Homes that have been operating legally as short term rentals before April 1, 2019 can continue to operate. However, the “grandfathered” status only applies as long as permits are kept current.
- Accessory Dwelling Units (ADUs) like guest houses and carriage houses can be rented out short term with a Homestead Exemption. The ADU and main residence must be owned by the same person.
- Dwellings with validNON-Homestead Exemption permits can operate short term rentals. These are often second homes or investment properties.
So in general, only grandfathered units, ADUs on Homestead Exempt properties, or non-Homestead units can operate as full-home short term rentals in residential areas.
Getting permitted for short term rentals in New Orleans
Any short term rental in New Orleans, whether a full home or owner-occupied unit, requires a permit. Here are the steps involved in getting permitted:
- Check your zoning district to make sure short term rentals are allowed. Commercial districts and designated neighborhoods allow full-home rentals while residential districts only allow owner-occupied units.
- Apply for either a Temporary Permit or Regular Permit through the City’s One Stop portal.
- Pay the annual permit fee, either $200 (residential) or $500 (commercial).
- Pass an inspection of your property related to safety systems, building codes, and noise ordinances.
- Once approved, you will receive your short term rental permit number, which must be displayed on all rental listings.
- Keep your permit up to date by renewing annually and maintaining compliance.
It is important to go through the permitting process to ensure your short term rental business is legal and compliant with city regulations. Renting without a permit can lead to hefty fines up to $500 per day.
Taxes on New Orleans short term rentals
In addition to needing a permit, short term rental hosts in New Orleans are also required to pay local taxes. Here are the details on short term rental taxes in New Orleans:
- Sales tax – New Orleans has a combined tax rate of 11.35%. Hosts must collect and remit sales tax on all short term rental bookings.
- Hotel tax – The New Orleans hotel/occupancy tax rate is 16.35%. This applies to all bookings under 30 days and must be collected by hosts.
- Short term rental tax – On top of hotel tax, New Orleans charges an additional tax of $2 per night for rentals of private residences and $3 per night for rentals of whole homes in residential areas.
In summary, hosts are responsible for collecting and remitting all applicable local taxes which can add up to over 25% in additional charges on top of nightly rental rates.
Are Airbnb and VRBO legal for short term rentals in New Orleans?
Yes, it is legal to list your permitted short term rental on platforms like Airbnb and VRBO in New Orleans. However, all the same rules apply. Listings must have valid permit numbers and abide by zoning restrictions. Platforms like Airbnb and VRBO also handle collecting and remitting taxes on behalf of hosts in New Orleans.
Fines and penalties for illegal short term rentals
The city of New Orleans actively enforces the short term rental rules. Violations can result in the following fines and penalties:
- Advertising or operating a short term rental without a permit – Up to $500 per day
- Renting a whole home short term in a residential district – Up to $500 per day
- Failure to properly display permit number – Up to $500 per day
- Failure to collect and remit taxes – Loss of permit plus repayment of taxes owed
The city performs audits of platforms like Airbnb and VRBO to identify illegal and non-compliant listings. Hosts are subject to fines until violations are corrected or listings are removed. Multiple violations can also result in the loss of a short term rental permit.
How neighbors can report illegal short term rentals
New Orleans residents who suspect an illegal short term rental is operating in their neighborhood have a few options for reporting it:
- Call the Department of Safety and Permits Short Term Rental Administration at (504) 658-7100
- File a report through the Short Term Rental Enforcement page on the City’s website
- Email [email protected] with information about the suspected illegal rental
- Submit an affidavit if you have witnessed the rental operating illegally
- Use the 311 app to make a report by location
Some signs of an illegal short term rental may include multiple groups of different guests staying for short periods, excessive noise or parties, or advertising online without a permit number. The city relies on reports from neighbors to help enforce STR rules.
Pros of legal short term rentals for hosts
Operating a legal short term rental has many advantages for hosts:
- Ability to earn supplemental income from extra space
- Avoiding large fines from the city for non-compliance
- Increased guest trust and fewer neighbor complaints when legally permitted
- Supporting tourism and the local economy by providing more accommodation options
- Possible tax deduction on expenses related to the short term rental
- More reassurance regarding property damage and liability insurance coverage
Cons of illegal short term rentals for hosts
On the other hand, attempting to operate an illegal short term rental can cause hosts major headaches:
- Frequent and expensive fines from the city for zoning or permit violations
- Difficulty finding guests without advertising on major booking platforms
- Possible cancellation of homeowners insurance if property is being used commercially without disclosure
- No tax deductions on expenses since business is operating illegally
- Friction with neighbors and community groups over disruptive activity
Overall, the risks and inconveniences of operating illegally outweigh potential rewards for most hosts.
Should I use a short term rental management company?
Many hosts in New Orleans choose to work with a professional short term rental management company. Some benefits of using a management company include:
- Assistance understanding and complying with local regulations
- Handling guest screening, check-ins, cleaning, etc.
- Advice on pricing strategies and advertising listings
- Collecting taxes and remitting to proper authorities
- Fielding neighbor concerns and noise complaints
The fees for short term rental management companies typically range from 10-25% of booked revenue. Reputable companies can help hosts avoid issues and optimize their listing.
Popular neighborhoods for short term rentals
While availability varies depending on zoning, some of the most popular New Orleans neighborhoods for short term rentals include:
| Neighborhood | Details |
|---|---|
| French Quarter | Historic district near major attractions |
| Garden District | Beautiful architecture and boutique shops |
| Marigny/Bywater | Trendy area with music and art scene |
| Warehouse District | Artsy loft-style rentals near Superdome |
| Mid-City | Quieter neighborhood close to Jazz Fest |
Checking the city’s zoning map is the best way to find eligible areas for operating short term rentals.
Advice for renting a short term rental legally
If you’re looking to book a short term rental as a visitor, here are some tips to ensure it is legal and permitted:
- Check the listing for a valid permit number from the city and confirm it is posted accurately on the listing
- Research the property’s address on the city’s zoning map to make sure whole home rentals are allowed
- Look for reviews that mention hosts collecting and remitting taxes as required
- Avoid listings without reviews, contact information, or details that appear suspicious
- Consider using platforms that provide additional verification of local rules compliance
Booking properly permitted rentals supports legal operators and provides a better overall guest experience.
Conclusion
Short term vacation rentals can provide hosts supplemental income and give visitors an authentic local experience. However, New Orleans regulations restrict full-home rentals to certain commercial areas and require permits for all operators. Understanding the nuances helps hosts and guests alike support legal short term rentals that contribute to the community.
With careful compliance regarding zoning, permitting, taxes, and other rules, hosts can successfully operate short term rentals in New Orleans. Likewise, renters who verify proper permits contribute to a thriving local tourism industry. As regulations continue to evolve, staying up to date will be key for hosts and guests to navigate the rules around short term rentals in New Orleans.
