When the New Orleans City Council imposed a limit on short-term rental permits last year, it included exceptions meant as a compromise to homeowners who said they need the tourism revenue to combat exploding insurance costs and taxes.
At least 16 permit-seeking landlords frozen out by the one-per-block limit have applied for exceptions, and the council on Thursday considered the first three. All three were awarded, including two that the City Planning Commission recommended denying.
Both of those were in District A, represented by Joe Giarrusso, who poked at the Planning Commission’s method for coming up with recommendations and said he would use his own rubric for granting exceptions.
“I don’t take these short-term rental exemptions lightly,” Giarrusso said. “Our job is to look at the totality of the circumstances.”
Council Budget Chairman Joe Giarrusso authored two city charter amendments on the ballot this year.
The Planning Commission considers six criteria for recommending approval, related to compatibility with surroundings, safety concerns and any benefits of additional short-term rentals. Applicants must meet four of the criteria to pass to be recommended for approval. They also must hold a meeting with neighbors to explain their plans, but neighborhood input is not included in the criteria. Giarrusso said both of the exceptions he granted had near unanimous support from neighbors.
The third exception, in Council member Eugene Green’s District D, aligned with the Planning Commission’s recommendation. Green, who came up with the one-per-square block rule, had been the strongest supporter of strict regulations during the debate over the new law. He voted against allowing any exceptions.
In allowing an exception on busy North Claiborne Avenue, Green cited the Planning Commission recommendation and noted that the property is zoned in a mixed-use business district.
New Orleans City Council member Eugene Green Jr., photographed Wednesday, Oct. 11, 2023.
Bob Murrell, who ran and lost against Giarrusso in 2021, spoke against the exceptions, pointing out that Giarrusso had campaigned against expanding short-term rentals.
“Across New Orleans we have trouble housing people with affordable rent. Every short-term rental is one less long-term rental for someone in need of housing,” Murrell said.
Giarrusso acknowledged that he has criticized short-term rentals in the past, but said said he also must consider homeowners who rely on short-term rental income to combat rising insurance costs and property taxes.
One of the exceptions Giarrusso granted went to Layla Alizadeh, who said she plans to rent one of seven bedrooms in her house on Wilson Drive on a short-term basis. Alizadeh said her mortgage payment has increased by $2,800 since she purchased the home in 2021.
Robert "Bob" Murrell
“We had not planned on really doing any STR, but we really needed some income,” Alizadeh said.
Alizadeh was the only homeowner who spoke on Thursday. The other exception Giarrusso granted is on Jeannette Street.
The 2023 law passed after the 5th Circuit Court of Appeal deemed the city’s previous law unconstitutional because it barred out-of-state owners from operating short-term rentals in residential areas. The court suggested capping the number of permits as an alternative way to regulate the industry.
Plaintiffs in that lawsuit filed a fresh complaint over the new law, claiming numerous constitutional violations. U.S. District Judge Ivan Lemelle upheld the law in February. That decision is once again pending before the 5th Circuit.