Insights for Investors: Understanding the Latest Short-Term Rental Rules in New Orleans
If you’re an investor exploring short-term rental opportunities in New Orleans, it’s crucial to stay informed about the latest regulatory changes. Recently, the city council approved new rules governing short-term rentals, and understanding their implications for your investment plans is essential.
First and foremost, the new regulations impose limits on the number of short-term rentals per square block. Each square, defined by four streets, can have a maximum of three short-term rentals. This restriction significantly influences property options in specific areas.
Another noteworthy aspect is that one permit per square will be granted through a lottery system. Not all applicants will receive a permit, making it a matter of chance to secure one for your investment property. The remaining two permits can be obtained through a special exemption application process, which may involve meeting specific criteria set by the city council. (We have reservations about this special exemption process.)
It’s important to recognize that the new regulations only allow one short-term rental permit per owner/operator. If you own multiple investment properties, you’ll need to select one to operate as a short-term rental. Additionally, only individual property owners can obtain permits, meaning that LLCs or companies cannot acquire permits for non-commercial short-term rentals.
One of the most significant changes is the requirement for the owner/operator of a short-term rental to reside in the rented space. This implies that purchasing a property solely for the purpose of operating it as a short-term rental will no longer be possible. Instead, you must live in the property yourself and offer any unused space as a short-term rental.
Lastly, it’s crucial to be aware that enforcement of these new rules will commence on July 1. Short-term rentals operating in violation of the regulations after this date may face penalties or fines. As an investor, it’s your responsibility to ensure compliance with these regulations to avoid legal complications.
By limiting permits per city square, implementing a lottery system, and mandating owner/operators to reside in the properties they rent, the city council aims to regulate the market and mitigate the negative impacts experienced in our neighborhoods. Whether this solution meets residents’ expectations remains to be seen
Here is a link to the ordinances for short-term rentals.