With scofflaws dominating short-term rental listings, New Orleans enforcement stalls | Local Politics

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.

As a condition of doing business, online platforms are not allowed to list unpermitted rentals under the city’s 2019 law. But it’s not clear how often the municipal regulators are snuffing out those listings. In 2021 budget meetings, city officials said there were about 200 open cases of short-term rental violations, but that they had scheduled only 10 enforcement hearings for the entire year.

“We know we need to be doing more. And we know that we need to be more firm on this. So we will be hitting way more cases next year,” Peter Bowen, the deputy chief administrative officer overseeing short-term rental enforcement at the time, said in November.

The administration’s online adjudication docket shows only upcoming cases, not past ones, so it is difficult to see how many short-term rental cases have been heard this year. If the April schedule is any indication, there has been a modest increase in hearings, with three scheduled for the month.

But with unpermitted rental listings possibly numbering in the thousands, a handful of hearings per month won’t do much to stop the free-for-all on the rental platforms. The current rate of hearings is also a far cry from Bowen’s suggestion last fall that Mayor LaToya Cantrell’s administration could institute quarterly “super hearings,” in which hundreds of cases could be heard in one day.

Bowen, who was fired in January after being arrested for drunken driving, also said last fall that the administration would competitively procure software to scrape platforms for noncompliant rentals, automatically delisting them. But four months after selecting a vendor, the administration has yet to sign a contract. City officials said in early February they hoped to sign the vendor, Granicus, by the end of that month.

The administration and Granicus did not make anyone available for interviews for this story, or provide a reason for the holdup. An administration spokesperson, Melissa Newell, said the contract is still “routing through the legally required procurement process,” but did not provide additional details. 

‘You’re going to get shot’

As part of its pitch for the contract, Granicus said it had identified 6,448 unique short-term rental units available in New Orleans, although it did not say how many were illegal. At that time, City Hall’s registry showed about 1,850 active permits, or less than one third of the total listings that Granicus identified.

The 2019 law created separate permits for residential and commercial rentals, and residential applicants must prove they live on site with a homestead exemption. But in a recent City Council meeting, Faubourg Marigny resident Wade Kodrin presented photographs, property records and social media posts showing that a homeowner on his block was listing and renting an entire house while living out of state, possibly committing homestead exemption fraud in the process.

Stranded rental guests outnumbered permanent residents on the block during the Hurricane Ida blackout, and relations were tense, Kodrin said.

“I get a knock on my door from drunk frat bros with beers in their hand looking for candles or a flashlight,” Kodrin recalled. “They knocked on all my neighbors’ doors, too, until they got threatened that ‘You’re going to get shot. Go inside.’”

Kodrin said he has reported the property through City Hall’s 311 service line numerous times, to no avail. City Council members were so impressed with his research they jokingly – or half-jokingly – offered him a job to help with enforcement.

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. 

Yet the administration’s inefficiency is hampering short-term rental operators as well, said Bob Ellis, an attorney who represents operators. A backlog of pending renewals is one reason there are so many illegal listings, he said. Ellis said automated enforcement tools such as the Granicus software are a good idea, but the administration should take steps to automate renewals, too.

“Taking somebody’s property offline – They are relying on this income, they do everything right and the city’s paperwork causes them not to be compliant – is wrong,” Ellis said.

No permits, no problem 

Bowen’s hiring in 2020 was controversial because he had been an executive of Sonder Holdings, one of the city’s largest commercial rental operators. The controversy deepened after his financial disclosures showed he still owned stock in the company.

Sonder almost exclusively lists properties with permits that are expired, still awaiting approval or already denied. Sonder has applied for more than 700 permits, including renewals, since 2017, according to City Hall’s short-term rental registry. Only one of those permits is currently active.

The company’s offerings include two connected properties, neither with a valid permit, that together comprise a 19-bedroom rental complex at the intersection of Piety Street and Burgundy streets in Bywater. Both properties are listed on Airbnb and Sonder’s website, which cites expired permit numbers. The listings allow two guests per room, or 38 total.

One of the properties, facing Burgundy, has been cited several times for renting and advertising without a permit. The owner, Geoffrey Lutz, was denied new permits in June. He reapplied in February, and while the status of that application is unclear, the city employee who reviewed it noted the zoning district necessitates a conditional use ordinance.

Lutz, who acquired the property with partners in October 2020, said in a brief phone call that he and his partners are complying with the municipal law.

“We are following the rules and intend to be permitted,” Lutz said, before hanging up.

Sonder representatives did not respond directly to questions about its invalid permits, nor to specific questions about the Bywater properties. They said the company is “aware and supportive of the city’s licensing compliance program,” adding that New Orleans should “make the compliance process efficient for all parties.” 

A boutique hotel next door

Neighbors have complained to city officials about Sonder’s Bywater properties for at least two years. In 2020, before Lutz bought them, the properties became an all-night party venue, at a time that strict occupancy and distancing rules forced legal venues to shut down or open on a limited basis, said Maria Ludwick, who lives next door.

“People would be out there checking IDs and checking to see if people paid,” Ludwick said.

Lutz has been more responsive than the previous owner, Ludwick said, but the continuous flow of guests in an accommodation the size of a boutique hotel creates an endless series of nuisances for the neighborhood.

On the evening of St. Patrick’s Day, one of the guests parked in Ludwick’s driveway, blocking her car for several hours, she said. Four days later, a tornado passed nearby and blew the property’s 95-gallon, unsecured garbage bins down the street. Even without tornadoes, the half-dozen or more garbage bins lining the curb tend to overflow quickly, Ludwick said.

She said she is bracing for what is to come over the next few months.

“Jazz Fest and French Quarter Fest and everything – that sucker is going to go. It’s going to be packed,” Ludwick said. “I don’t know how they get away with that.”