Between a Rock and a Hard Place to Stay

Short-term rentals in New Orleans
Illustrations by Tony Healey
Jennifer Gibson Schecter was once a tourist in New Orleans herself and is now proud to call NOLA home. She also writes the Wednesday Tourism Blog on BizNewOrleans.com.

When I was 15, my Nana gifted me money so I could afford a school trip to Spain. It was my first time on an airplane. We traveled throughout the country, but Barcelona stood out as a city that juxtaposed ancient roots with a modern purpose. I remember walking through the Old City and wondering what steps I should make in life so I could end up living in that incredible neighborhood.

I never made it back to Barcelona, but I do have something in common with my could-have-been neighbors. We are all frightened that we can’t afford to rent in our beloved cities anymore, due in part to short-term rentals (STRs).

The biggest player in the STR sector is Airbnb. It’s estimated worth is $30 billion, with 81,000 cities represented and an annual guest target of 1 billion by 2028. The company is making international news as both a successful business model and one that could be killing the local culture of cities.

A few friends of mine are Airbnb hosts. They have been able to make ends meet as artists, pay for private school tuition and travel with the money they made via Airbnb. I also have friends who have been evicted from their homes because their landlords converted their apartments into Airbnbs. The economics are clear – property owners make more money on short-term rentals than long-term leases.

The Airbnb website lays it out. When I clicked on “Become a host,” a pop-up window told me I could “Earn up to $1,583 a month hosting in New Orleans.” An entire home for six guests — so in New Orleans speak, a three-bedroom shotgun — has a monthly potential of $2,063.  An internet search of two-bedroom shotguns in the Bywater showed an average rent of $1,500.  

There are over 380,000 guest reviews for New Orleans homes, with an average of 4.8 out of 5 stars. As of press time, there were 20 homes verified as Airbnb Plus and more than 300 homes listed. Some of them were advertised as being part of Sonder, an entirely separate short-term rental company that leases properties directly. They are never anyone’s “home.”

A search of Sonder for a two-week stay in September for two people revealed nearly 50 available properties, with 17 of them on North Scott Street in Mid-City. Each one has a different Vacation Rental License Number. A bell rang in my mind and I remembered a Nola.com story in the spring about one apartment building having multiple short-term rental units. Sure enough, reporter Chelsea Brasted found that Sonder had leased multiple apartments in the 26-unit Mid-City iLofts building at 635 N. Scott St.

The building’s website touts a “community” that has shared outdoor amenities such as an outdoor kitchen with a grill, sofas and chairs, as well as basketball, handball, tetherball and bocce ball courts. I shudder to think of the condition of shared spaces when more than half of the building’s “residents” are short-term renters. But prior to being developed as iLofts, the building sat empty with boarded-up windows and served as a canvas for local graffiti artists. The fact that a developer invested in this property is good for the neighborhood, right?

The discomfort of it all is in the marketing. Airbnb continues to market itself with the experiences of individual hosts, yet it is very aware of the fact that many of its “hosts” are actually companies that own multiple properties. Stories abound of negligent and faceless landlords who employ people to serve the host function for their STR properties. Airbnb’s growth goals actually rely on such models. There is a limited number of individuals who have the capacity to deal with travelers’ demands, but the amount of companies looking for new revenue models is limitless.

That is why we need thoughtful and enforced regulation of STRs. As a traveler, I want the option to book a whole home so I have access to a kitchen and room for my family to spread out. We can’t afford the same square footage in a hotel. But as a citizen, I also want to make sure that the STRs in our community aren’t causing rents to rise and neighborhoods to sit empty between weekends.

Change is always uncomfortable, especially in a city like New Orleans that treasures its traditions. The fact of the matter is that the sharing economy and STRs are going to be around for a while, and local leaders need to find the way forward that benefits most. The rules currently in place aren’t doing enough to help short-term rentals do more good than harm.


 

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