Tuesday, October 09, 2018

We lost the short term rental argument

Residences du Barronne

The recommendations passed out of CPC last week are already too loose and liberal.  They shift some things around and give them different terms but, in essence, the parameters they set will almost certainly preserve the intolerable status quo. Yes, they're eliminating the "Temporary STR" licenses which were riddling neighborhoods with de-facto hotels.  But they're replacing that with a category that undoubtedly leads to the same outcome. It even opens up the possibility of tenants sub-letting apartments as Airbnbs. The requirements for that form a pretty big loophole in their own right. 
“There is general consensus that the Accessory Short Term Rental is the least problematic type since there is a requirement for a Homestead Exemption and the property owner is present during the time of the rental,” the study says.

These licenses would be marginally expanded and rechristened as “residential licenses.” And they would be split into two categories: whole-unit and partial-unit. Partial-unit licenses would allow homeowners and renters to offer up spare rooms. To allow renters to participate, the operators would have to prove their residency with a Louisiana state-issued ID and a secondary form of identification, instead of a homestead exemption.

Accessory licenses were partially designed for homeowners who want to rent out unoccupied half-doubles. Under the commission’s proposed regulations, these would fall under the residential whole-unit category. This category would expand to include three- and four-plexes, but only allow one licensed unit per lot.
This isn't actually better. It's only different.  And as the matter goes to City Council, the new rules are almost certain to be made more favorable to STR operators than they are now.  For example, it's unlikely this definition of commercial STR is unlikely to remain in place.
The third category of recommended license — commercial — would have new restrictions as well. The study suggests a complete ban of commercial rentals in some of the “least intensive neighborhood business districts,” including some commercial zones in the city’s most popular areas for short-term rentals, like Bywater and Faubourg Marigny.

In the remaining commercially zoned areas of the city, commercial permits would be restricted to one unit or 25% of all units per lot, whichever is greater. Short-term rentals would also be banned on the first floor of residential multi-story buildings in many commercial districts.
Yeah I don't know how jamming 200 STRs into these Motwani-owned buildings  on Canal Street is gonna jibe with that 25 percent rule. Probably not very well.  Jason Williams is determined to make it happen, though.
Bowen said Sonder hasn't attempted a similar approach with a larger space, but Williams said he's content with the company's current approach because it's consistent with other city goals for righting the ship on short-term rentals.

"The focus is to pull short-term rentals out of our neighborhoods where they're causing strife to put it in areas where we can put things back into commerce," Williams said. "The cherry on top, if this works -- and I think this can work -- is we can then not just have liquor stores, T-shirt shops ... but we can have Apple Store, local unique vendor, Crate & Barrel. ... We have a unique opportunity here and I don't want to squander it."
I'm so old I remember way back in 2006 when we were told the "New New Orleans" would have to be built smarter and higher and that the way to do that would be to help people come back out of the post-war swampland neighborhoods and onto the higher ground of the "historic city center."  Since that time, though, the historic neighborhoods have been aggressively cleared out and converted to STR-filled tourism sacrifice zones.  It turns out, a "smarter and higher" built city doesn't necessarily mean anyone is supposed to actually live there. 

Anyway, get used to it.  We lost this argument a long time ago so it's no surprise we're still losing it again this year.  In the same way that building more luxury apartments downtown hasn't done anything to solve the affordable housing crisis, building a Sonder hotel on Canal Street isn't going to "pull short term rentals out of the neighborhoods."   But Jason really wants that Apple Store, I guess. Good for him.

As always the people who count are the people who have money in real estate and we're gonna do whatever helps them turn that money into more money the fastest. Motwani is going to make a lot of money in this Sonder deal. Therefore, that is the best, highest use for land on high ground in downtown New Orleans.

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