New Orleans further limits STRs in residential areas with new ordinance

Short-term rentals (STRs) will be limited to a maximum of three per city square in residential areas under a new law passed by the City Council.

The new measure goes into effect July 1. It comes in response to a federal appeals court decision that invalidated key parts of the city’s previous ordinance. The city was given a deadline of March 31 to create new rules.

The previous law required vacation rental hosts in residential neighborhoods to have a “homestead exemption,” meaning they live there and claim the property as their primary residence. The federal judge’s ruling in August 2022 found that the law discriminated against out-of-state property owners.

Under the new law, the homestead rules are replaced by a requirement that operators must live on the same lot as the short-term rental unit. STR permits are limited to one per city square, meaning four city streets that form a square. Those permits will be allocated via a lottery, which will include existing permit holders. 

Up to two more short-term rental permits per city square may be issued to operators who individually apply for a special exemption. That process requires neighbor notification and comment as well as City Council approval.

The ordinance also limits permits to “natural persons,” not corporate entities, and only one permit will be issued per person. Short-term rental permit holders must also:

• Resolve complaints within one hour
• Include permit numbers in advertisements
• Have at least $1 million in commercial general liability insurance
• Follow rules on quiet hours, occupancy limits, safety, and more

Short-term rental platforms such as Airbnb and Vrbo must require all listings to have a valid permit number from the city.

According to the law, violations by vacation rental operators can result in minimum fines of $500 per offense — with each day considered a separate offense — as well as permit revocation. Hosts with “sustained violations” can be banned from operating a short-term rental for four years.

The new law only applies to short-term rentals in residential areas, and the council may address commercial rules later this year.

New Orleans vacation rentals are also subject to lodging taxes that include Louisiana state sales tax and several city taxes, including sales tax, a short-term rental occupancy fee, occupancy privilege tax, and a short-term rental equalization occupancy tax. Short-term rental operators in New Orleans are required to register and file lodging tax returns with city and state tax authorities.

Airbnb collects both city and state taxes on behalf of its hosts. Vrbo also collects city taxes for hosts in New Orleans, but does not collect Louisiana state taxes. Hosts are required to collect and pay taxes that are not collected by their platform, and they must register and file lodging tax returns even if taxes are being collected on their behalf.

MyLodgeTax can help short-term rental hosts in New Orleans simplify and automate lodging tax compliance. See our Louisiana Vacation Rental Tax Guide for more on short-term rental taxes in the state. If you have tax questions related to properties in New Orleans, drop us a line and we’ll get back to you with answers.