Airbnb is suing New Orleans over regulatory ‘regime’

Airbnb is suing the City of New Orleans for requiring the company and short-term rental platforms ensure properties they market are in compliance with city laws.

“What we’re looking at now due to Airbnb’s lawsuit is that they do not want to be regulated,” City Council President J.P. Morrell said in a late afternoon Tuesday statement.

Airbnb said its lawsuit comes “after exhausting all available paths toward sensible solutions.”

For years, New Orleans leaders have struggled with how to manage the influx of illegal short-term rentals catering to the millions of visitors who flock to The Big Easy annually while managing a lack of affordable housing.

A federal court struck down a 2019 New Orleans policy barring short-term rentals at properties owned by out-of-state residents. The city responded by adopting new regulations in 2023 mandating Airbnb owners live on site and limiting short-term rentals to one per block, but enforcing these rules proved difficult and illegal properties were easily able to resurface on Airbnb, city leaders say. A federal appeals court is currently reviewing these policies.

Last year, the city council adopted regulations set to go into effect in June requiring Airbnb and other companies verify that all New Orleans properties listed on their platform have permits from the city. Morrell called the policy a “game-changer” that would “gut the ability to illegally list fake permits and Airbnbs.”

Airbnb said it should not be tasked with implementing the city’s policies. The company has pushed back against other cities’ efforts to regulate it, including suing New York and San Francisco.

Airbnb decries the city’s regulatory ‘regime’

In its lawsuit filed in federal court last week, Airbnb said it has no responsibility for the actions of its hosts, citing the same law that protects social media companies from liability for users’ posts. And the company denied that it had any obligation to verify listings were in compliance with city regulations, which it described as a “highly punitive enforcement regime.”

“It is the government’s job to enforce its laws, not Airbnb’s,” the lawsuit said. It described the city’s regulations—including in some cases requiring a lottery for permits—as a violation of homeowners’ rights.

Airbnb also protested having to turn over “confidential, sensitive, and private data” such as taxes and fees it collected and the number of bookings per property in monthly reports submitted to the city.

A “typical host” in New Orleans earned $16,000 in 2023 and “hosting strengthens local economies and contributes to the cultural richness New Orleans is known for,” the lawsuit states.

An abundance of illegal Airbnb listings

There are currently about 1,350 non-commercial short-term rental properties with legal licenses, according to City of New Orleans data.

But there are more than 7,000 active Airbnb listings in New Orleans revealing thousands of illegal short-term rentals, said Angela Owczarek, an affordable housing advocate with the Jane Place Neighborhood Sustainability Initiative.

New Orleans is experiencing an affordable housing crisis mirroring many cities around the country, said Monique Blossom, director of policy at the Louisiana Fair Housing Action Center.

The city had a deficit of 47,000 housing units that someone making at or below the city’s median income could afford, according to a 2022 report from the National Low Income Housing Coalition. The city has a population of less than 400,000 residents based on U.S. Census data.

“Airbnbs and short-term rentals play into that, taking residential units off the market and saving them for tourists instead of having them available for the families that want to live and work in New Orleans or who are already here,” Blossom said.

Airbnb said in a statement that the city’s short-term rental regulations do not address the issues underlying its housing challenges, such as high insurance costs.

Morrell, the city council president, suggested the lawsuit meant the city should ban Airbnb. “If we cannot regulate short term rentals, there will not be any,” he said.

Another councilmember, Oliver Thomas, said the city should first wait to see how pending litigation plays out. Other councilmembers and a City spokesperson did not provide comment.

Skyrocketing costs for some Airbnb owners

Airbnb’s lawsuit includes several other plaintiffs who are short-term rental property owners in New Orleans, including longtime Airbnb hosts Bret Bodin, 64, and Brad Newell, 47, who bought a home together in the historic Treme neighborhood in 2013.

Renting out the property’s attached guesthouse and loft on Airbnb appealed to them because they could still have friends and family visit, Newell said.

With skyrocketing insurance, utilities, and inflation, the couple have become more dependent on Airbnb and say they struggled because the city’s regulations limited them to only renting out one of their guest spaces.

“What started off as kind of side-income turned into essential income,” Newell said. “We’re all getting hit with unexpected rising costs, and we’re just trying to keep up.”

Brook is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Brook on the social platform X: @jack_brook96.

—Jack Brook, Associated Press/Report for America

https://www.fastcompany.com/91281097/airbnb-suing-new-orleans-over-regulatory-regime?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss