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New Orleans approves change allowing more short-term rentals

  • Mar 22, 2022 | Jennifer Sokolowsky

Downtown New Orleans

The New Orleans City Council approved a zoning change that will allow more small multifamily buildings throughout the city that can include short-term rentals. The new rules are part of an effort to create more affordable housing within the city.

Under the change, residential buildings with three and four units can now be built in many areas of the city’s core that previously limited buildings to two units. Within these buildings, at least one unit must be reserved for renters making up to 80% of the median income in the area — around $39,000 per person. Around two-thirds of New Orleans renters fall into this category. The income restrictions will apply for 15 years.

The number of New Orleans residential properties with three to 19 units has fallen by more than 20% over the past 20 years, according to U.S. Census data. The destruction of Hurricane Katrina in 2005 contributed to this decline.

The new rules for small multifamily buildings also allow one unit to operate as a short-term rental, following the city’s existing vacation rental regulations that require hosts in residential neighborhoods to live on their properties.

Councilmember Helena Moreno, who voted to pass the zoning change, said she would introduce a ban on any short-term rentals under the new zoning designation in 14 areas. Vacation rentals have long been controversial in New Orleans, with recent debates focusing on how well the city is enforcing short-term rental laws.

In New Orleans, the short-term rental ordinance, which went into effect in 2019, requires all short-term rentals to be licensed. Vacation rental hosts in residential neighborhoods are required to have a “homestead exemption,” meaning that they live there and claim the property as their primary residence. Vacation rentals are illegal in residential areas of the Garden District as well as most of the French Quarter, and they may take up no more than 25% of commercial or mixed-use property.

New Orleans short-term rental hosts are required to collect 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 must 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 New Orleans hosts, 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 New Orleans properties, drop us a line and we’ll get back to you with answers.

Cover photo by Canva

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.
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