NEW ORLEANS — Airbnb has initiated legal action against the City of New Orleans, contesting a requirement that it and other short-term rental platforms ensure properties they advertise comply with local laws.
City Council President J.P. Morrell highlighted that the lawsuit indicates Airbnb’s reluctance to adhere to regulations during a statement made late Tuesday afternoon.
Airbnb claims that the lawsuit was a last resort after attempting to find reasonable solutions with the city.
New Orleans officials have grappled with managing a surge of illegal short-term rentals that cater to millions of tourists visiting the city each year, all while addressing a critical shortage of affordable housing.
In a previous legal ruling, a federal court struck down a 2019 policy that prohibited short-term rentals in properties owned by individuals residing out of state. As a response, the city instituted new regulations in 2023 requiring property owners to live on-site and limiting short-term rental licenses to one per block. However, city leaders express that enforcement has proven challenging, allowing illegal properties to reappear on Airbnb. This matter is currently under review by a federal appeals court.
The city council approved new regulations last year, which are set to take effect in June, that demand Airbnb and similar companies confirm that all properties listed in New Orleans possess the necessary permits issued by the city. Morrell described these new regulations as a critical shift that will eliminate the ability to falsely list properties with fake permits.
Airbnb argues that it should not be responsible for enforcing city regulations and has previously challenged regulatory efforts in other city environments, including New York and San Francisco.
In its recent federal court filing, Airbnb contended that it is not liable for the actions of its hosts, referencing legal protections that shield social media platforms from liability due to user-generated content. The company further claimed that it has no duty to confirm compliance with municipal regulations, describing them as a stringent and punitive system.
According to their lawsuit, the onus of enforcing the law falls on the government, not on Airbnb. They criticized some city regulations, which even include a lottery system for obtaining permits, as violations of property owners’ rights.
Airbnb also raised concerns about the requirement to disclose “confidential, sensitive, and private data,” such as tax collections and the number of bookings per property in regular reports to the city.
The lawsuit asserts that a typical host in New Orleans generated approximately $16,000 in earnings in 2023 and that hosting contributes positively to the local economy and the unique cultural character of New Orleans.
Currently, the City of New Orleans has around 1,350 legally licensed non-commercial short-term rental units.
However, there are over 7,000 active listings on Airbnb, indicating the presence of many unlawful short-term rentals, according to Angela Owczarek, an advocate from the Jane Place Neighborhood Sustainability Initiative.
Monique Blossom, the director of policy at the Louisiana Fair Housing Action Center, remarked that New Orleans is facing an affordable housing crisis similar to those witnessed nationwide, highlighting a lack of 47,000 housing units affordable for individuals earning at or below the city’s median income, as per a 2022 report from the National Low Income Housing Coalition.
Blossom stated that short-term rentals like Airbnb contribute to this crisis by removing residential units from the market for tourists, thereby limiting availability for families who wish to live and work in the city.
Airbnb contended in a statement that the city’s regulatory measures do not tackle the core issues of its housing challenges, such as escalating insurance costs.
Morrell suggested that should the lawsuit proceed, it might necessitate banning Airbnb altogether, asserting, “If we cannot regulate short-term rentals, there will not be any.”
Another council member, Oliver Thomas, suggested it might be prudent to wait for the outcome of ongoing legal proceedings before making further decisions.
The lawsuit includes other plaintiffs as well, comprising short-term rental owners like Bret Bodin, 64, and Brad Newell, 47, who acquired a property in the historic Treme neighborhood in 2013.
Newell mentioned that utilizing Airbnb for the property’s guesthouse and loft made sense as it allowed for visits from friends and family.
With the rapid rise in costs related to insurance, utilities, and inflation, the couple has become increasingly reliant on Airbnb for income, claiming that city regulations have restricted them to renting only one guest space.
“What started off as kind of side-income turned into essential income,” Newell explained. “We’re all getting hit with unexpected rising costs, and we’re just trying to keep up.”
