Airbnb Files Lawsuit Against City of New Orleans Over Rental Regulations
The City of New Orleans is facing a lawsuit from Airbnb over its requirement for the company and other short-term rental platforms to ensure that the properties they market comply with local laws. City Council President J.P. Morrell expressed concerns about Airbnb’s resistance to regulation, stating that the company seems to be opposed to oversight.
Airbnb has stated that it pursued legal action as a last resort after exploring various solutions. The ongoing issue stems from the challenge of managing the surge in illegal short-term rentals in New Orleans, catering to the city’s high tourism traffic while also addressing the lack of affordable housing options.
A federal court previously struck down a 2019 policy that prohibited short-term rentals at properties owned by out-of-state residents. In response, the city implemented new regulations in 2023, requiring Airbnb hosts to reside on-site and limiting short-term rentals to one per block. However, enforcing these rules has proven difficult, allowing illegal properties to resurface on Airbnb.
The debate over regulation is now under review by a federal appeals court. In an effort to combat illegal listings, the city council passed a policy set to take effect in June, mandating that Airbnb and similar companies verify that all listed properties have city permits. Morrell hailed this as a significant step forward in cracking down on illegal listings.
Airbnb argues that it should not be responsible for enforcing the city’s regulations and has challenged similar regulatory efforts in other cities. In its lawsuit, the company claims that it is not liable for hosts’ actions and should not be required to ensure compliance with local laws. The lawsuit also criticizes the city’s regulations, calling them punitive and a violation of homeowners’ rights.
Despite the legal dispute, Airbnb emphasizes the positive economic impact of hosting for local economies. However, advocates point out that the prevalence of illegal listings exacerbates New Orleans’ affordable housing crisis. With thousands of illegal short-term rentals in the city, there is a pressing need for effective regulation to address the housing shortage.
The city has a population of fewer than 400,000 residents according to U.S. Census data. Blossom highlighted the impact of Airbnbs and short-term rentals on the availability of residential units, stating that they are taking housing options away from local families in New Orleans by catering more to tourists. In response, Airbnb mentioned that the city’s regulations on short-term rentals fail to address the root causes of housing challenges, such as the high costs of insurance. Morrell, the city council president, raised concerns about the lawsuit and proposed the idea of banning Airbnb if regulation is not possible. Councilmember Oliver Thomas suggested waiting for the outcome of pending litigation before making decisions. Other councilmembers and a City spokesperson declined to provide comments on the matter.
Among the plaintiffs in Airbnb’s lawsuit are Bret Bodin, 64, and Brad Newell, 47, who are long-time hosts on the platform. The pair purchased a home together in the historic Treme neighborhood in 2013 and found Airbnb hosting appealing as it allowed them to still have friends and family over. However, with soaring insurance, utility costs, and inflation rates, they have become increasingly reliant on Airbnb income. They expressed difficulties due to the city’s restrictions that limit them to renting out only one of their guest spaces. Newell emphasized how what started as supplemental income has now become essential to their livelihood as they struggle to cope with unexpected rising expenses.
Brook is a corps member for The Associated Press/Report for America Statehouse News Initiative, a program that places journalists in local newsrooms to cover overlooked issues. Follow Brook on the social platform X: @jack_brook96.
