Will we ever Make It Right?

We have to say it's a remarkable trip the City of New Orleans has been on with short term rentals for the better part of the last decade only to end up right back where we started. We've been through years and years of hearings, hotly debated regulations that don't work, hotly debated revisions to those regulations that continue to not work, at one point we even decided to go the whole nine and turn enforcement responsibility over to an industry profiteer.  A whole lot of things have happened. But also nothing has changed.  This article says it's "inexplicable" but is it?  

With New Orleans' spring tourism season in full swing, the Cantrell administration’s stated plan to crack down on illegal short-term rentals is inexplicably stalled, leaving scofflaw operators to freely list unpermitted rentals on Airbnb and other online booking platforms.

Pinning down just how many unpermitted rentals are available is nigh impossible, but data provided by the technology firm Granicus, combined with City Hall's short-term rental registry, suggests they outnumber legitimate ones at least 3 to 1.

There's probably a very simple explanation, actually. Helena Moreno seems pretty close to getting it right here. 

Council member Helena Moreno said she is baffled by the administration’s flagging enforcement efforts. 

 “With the lack of enforcement and slow-walking of accountability measures, it makes me wonder whether this is purposeful,” Moreno said.

It's hard not to think that. Otherwise, it would be difficult to explain why the city would be leaving so much money on the table. As Moreno also points out, the city has somehow never managed to give anyone a straight answer as to how much money it actually collects in fees and fines under the current STR enforcement regime. Strange behavior for an administration that has been otherwise diligent in chasing down drivers ticketed by its robots or shutting down any street parade or music venue not able to pay the premium fees. We know the city wants to collect its money.  It's just particular about who actually has to pay. 

Now I'm not honestly recommending that any normal person with actual things to do tries this, but, for those who really must, you can view last Wednesday's meeting of the city revenue estimating conference here.  Watching these meetings one gets a (rather grim) feel for what this administration's ideas are about the city's economy and who it is supposed to serve. For example, during a discussion on employment numbers, Gilbert Montano briefly references the "Great Resignation" to signal his sympathy with the "people don't want to work" myth popular among bosses these days. (Actually the labor participation rate is nearly back to pre-pandemic status now. But that isn't going to stop the ownership class from demanding we continue to shred what's left of the social safety net just in case any workers out there feel even the slightest hope.) At the REC, the Cantrell administration generally sound like they are the corporate board of a big hotel. Almost all of the metrics highlighted in their presentation are based on how well the tourism business is going; how many visitors fly in and out, how many hotel rooms are occupied, etc.  The first time I saw LaToya Cantrell speak publicly about short term rentals her comments were already very much shaped by a hospitality management mindset. Even while she assented to the point that they may be raising housing costs, she basically looked past that to assert that New Orleans is a "destination city" and that STRs are a source of revenue.

But Cantrell is "the mayor right now" and somehow all that revenue isn't finding its way into city coffers. Property values are up, rents are way way way up,  but according to city projections, property tax revenue is down slightly.  At the meeting, much of the discussion about that centered on assessor Erroll Williams. In September, Williams granted across the board breaks to property owners following Hurricane Ida.  The fact that Williams's office has apparently granted some invalid corporate exemptions was also mentioned. 

Near the end of 2020, three local government agencies denied tax breaks for planned improvements to the Folgers coffee plants in New Orleans East. But only now, more than a year later, has the assessor put the properties onto the tax rolls, making the company liable for $5.1 million in real estate levies.

Assessor Erroll Williams blames the Louisiana Department of Economic Development for the delay. That agency blames Williams.

That T-P story details circular arguments from the assessor and from LED about who is supposed to inform whom about ITEP denials. But, I dunno, I think one thing an assessor might do in a case like this  is call somebody and ask?

Williams said his office was following its standard practice: Don't put properties on the rolls while their applications for tax breaks are still pending. He said his office asked the state about Folgers in February because the state database did not yet show the tax breaks were denied and he had received no formal paperwork from any agency saying a decision on the breaks had been made.

"This office hasn’t gotten a letter from the School Board, city of New Orleans or the Sheriff’s Office that they’ve decided to vote the contract down, so I can’t put a taxpayer on the rolls based on what I read in the newspaper," Williams said.

The status was not changed to “denied” until March, at which point Williams said his staff began working to put the properties on the tax rolls.

The state agency said it “does not notify local taxing authorities about the actions of local government entities involved in the ITEP application review process. Questions about when and how the exemption is applied at the local level are best directed to each local taxing authority.”

Hard to believe these people can't all get together and talk one way or another. This just isn't that big a town.  Especially now that nobody actually lives here. Who can afford to, anyway?

Anyway, not to give the REC any more work to do but it turns out there are other places to dig for lost property tax money if they're feeling hard up. 

In total, Make It Right owes $14,972.81 in back taxes and fines, which are added to a property’s tax bill once they become delinquent. Most of that debt was accumulated in 2021, when the foundation failed to pay taxes on any one of its properties. And It’s possible that number will grow even higher for unpaid 2022 taxes, which are due today, March 31. 

According to the city’s online tax records database, the foundation owes $9,493 in 2022 property taxes. But The Lens was unable to confirm that the foundation has not paid that down. It appears that the city’s digital property tax records haven’t been updated to show whether property owners have yet paid their 2022 taxes. Officials did not respond to questions about the group’s 2022 property taxes.

Or maybe this is another thing where they've got to wait on Erroll to update the spreadsheet. 

One last point about the REC. Montano et al are still being extremely cautious with their use of the American Rescue Plan dollars by projecting it out over the course of a five year hypothetical revenue gap instead of applying it toward the addressing the city's numerous critical human services and infrastructure needs. (Notice how they are not shy about throwing that money at police as fast as they can, however.)  Back in August, we wrote more about how this administration's ideological conservatism informs its approach to budgeting.   On Wednesday, the projections we saw did not account for the next tranche of ARP dollars promised to cities because there was still talk in Washington about clawing those funds back in the next spending authorization.  As of this writing, though, it looks like that money is still coming.

Under the emerging deal, Mr. Romney, said, most of the $10 billion would be repurposed from the $1.9 trillion pandemic law Democrats muscled through without Republican support last March. But direct funds for state and local governments would likely not be touched, after Democrats balked at this money being clawed back. Mr. Romney said negotiators had discussed taking back some funding from a program that allowed states to give grants to local businesses.

That's pretty good news. But it could be better.  The way it looks right now the primary benefit of the federal bailout is it allows the city to keep letting wealthy property owners slide on their responsibility at the current rate. Without it, they'd still do that, of course. But they'd have to crack down even harder on the poor than they currently do to make up the difference.