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In the fight to regulate short-term rentals, New Orleans had a novel idea—it would hold a lottery. The plan was simple: Carve up the city into blocks and use a hand-cranked lottery machine to draw numbers, allowing one rental property per residential block. For the winners, the prize was a license to keep listing their property on sites like Airbnb and Vrbo. For the losers, despair.
But the controversial rules, enacted in March 2023, led to just one lottery before being temporarily halted by a federal judge in August. As the city awaits a final decision, short-term rentals in New Orleans have been left in limbo. The city has said it is no longer accepting applications for the short-term rental licenses it requires hosts to have, nor is it renewing existing ones. And, until the court makes a final ruling, the lottery balls have stopped spinning and the city has halted enforcement of its latest licensing rules.
The limbo stems from an ongoing lawsuit against the city from a short-term rental services company and a group of hosts who were unable to even enter the lottery due to narrow licensing rules.
Like many popular tourist cities across the world, New Orleans has a lot of short-term rental listings. On Airbnb alone, there were nearly 7,000 listings in early September—the majority of which were whole-home or short-term rentals, according to Inside Airbnb, a housing advocacy group that tracks Airbnb data. That’s about one listing for every 54 residents. By comparison, New York City had one Airbnb listing for every 220 residents before it enacted a sweeping law that caused the number of listings to plummet.
The average rent for an apartment in New Orleans is around $1,350 per month, but the average price per night of an Airbnb in the city is $198 per night, according to Inside Airbnb. That’s nearly $6,000 per month if booked each night. Officials say there are nearly 9,000 short-term rental listings in New Orleans, though the city did not answer questions from WIRED about how it tracks that number. More than 200 of those have been added in the past month.
Dawn Wheelahan, an attorney representing those suing New Orleans over the lottery law, disputes the idea that the city has too many Airbnbs. In a court document that uses city data, Wheelahan mapped which blocks would have multiple short-term rental applicants, and found most only had one applicant, while more than 50 blocks had three or four applicants and only one block had five applicants. “I just don’t see that there’s any proliferation” of short-term rentals, Wheelahan claims.
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Whole-home rentals—the sort of bland and luxury stays that have become popular for travelers— are the ones perceived to eat away at housing stock, and can be owned by big-time landlords. New Orleans has tried and failed to stamp those out. Last summer, a federal court blocked another New Orleans law intending to ban whole-home, short-term rentals, ruling that it interfered with interstate commerce by barring people from out of state from owning and operating rentals in the city. Under the new, halted rule, people can own out of state, but there must be a host living on the property.
New Orleans wants to see the lawsuit resolved so it can “provide certainty and stability in this area of law for all citizens of New Orleans,” says Ashley Becnel, the chief zoning official with the city’s Department of Safety and Permits. The city maintains that the laws enacted this year “are constitutional” and “[it] is hopeful that the injunction will be lifted in the near future.”
In New Orleans, housing advocates say short-term rentals are hurting local residents—many of whom work in the tourism industry—and pushing them farther from the French Quarter, the city’s hub of bars, restaurants, and clubs. But residents fighting against the proliferation of short-term rentals face a Sisyphean task.
“It’s an industry that requires a lot of work to regulate, because [the short-term rental companies] don’t want to be regulated,” claims Allen Johnson, president of the Faubourg Marigny Improvement Association, a neighborhood group in the district next to New Orleans’ French Quarter. “It’s not really an industry that you can come to some sort of settlement with,” he argues. When one attempt at regulation fails and another is introduced, Johnson adds, there are new plaintiffs ready to challenge them. “It’s starting to feel like a game of whack-a-mole for legislatures.”
And for short-term rental hosts, the confusion and erratic shifts in regulation bring frustration and financial loss. Elisa Cool Murphy, a real estate agent, was operating a small Airbnb attached to her home in New Orleans. She says she entered the lottery for a license this summer before the court put a pause to the law. Like some other hopeful hosts, Cool Murphy was pitted against her own neighbors to compete for a lucrative short-term rental license.
Cool Murphy has a small suite on the property where she lives. She put the place—just a kitchenette, bed, and bathroom—on Airbnb. It’s not the kind of property a full-time tenant would likely lease, she argues. She says she took it off Airbnb temporarily due to the changing licensing requirements. The chaos around the lottery and the subsequent court delays have “needlessly caused a lot of anxiety and stress to people,” she says. Cool Murphy put the little suite back online in October after learning that the latest licensing rules weren’t being enforced.
Smaller short-term rental hosts like Cool Murphy say the New Orleans rules unfairly shut down dependable side hustles. Before the new rules were enacted, Airbnb hosts in New Orleans made a combined $114 million in 2021, with an average host earning over $16,500, according to the company. Airbnb also positions itself as a source of income and tax revenue for hosts and cities; in 2022, the company said it collected and remitted around $23 million in tourism taxes in New Orleans alone.
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Airbnb isn’t involved with the current lawsuit, but the ruling would have implications for the company’s hosts. “The majority of hosts in New Orleans share just one home, and one-third say the income from home-sharing has helped them avoid foreclosure or eviction,” Nia Brown, an Airbnb regional policy manager, tells WIRED. “We believe there is a path forward to craft a sensible alternative to the current rules and hope lawmakers will bring all stakeholders, including our host community, to the table to find common ground.”
The saga in New Orleans is the latest example of a city trying to wrest back housing and calm rising rent and property prices. It’s been a problem around the globe ever since companies like Airbnb made short-term rentals a lucrative alternative for landlords.
In Florence, Italy, lawmakers recently voted to ban new short-term rentals in the city center. New York City began enforcing a strict law on short-term rentals earlier this month. The change immediately led some 15,000 short-term rentals on Airbnb to either disappear or convert to long-term listings. The move is seen as a test: If America’s biggest city can stamp out illegal short-term rentals, it sends a loud message for other cities looking to do the same. But the latest languishing court case in New Orleans shows just how difficult it can be for cities to wrap regulations around the unwieldy short-term rental industry. As it sits in limbo, the bookings continue.
