A federal appeals court has struck down a New Orleans law restricting licenses for short-term Airbnb-style rentals to city residents, ruling that it unconstitutionally blocks out-of-state property owners from the vacation rental market. The rule was passed to slow the spread of "whole-home" vacation rentals amid complaints that they were driving up property costs and tax assessments, that full-time residents were exiting historic neighborhoods, and that vacationers' all-night parties and noise were disruptive. A key provision states that a person can obtain a short-term rental license only for their primary residence, but the Fifth U.S. Circuit Court of Appeals decided that it unconstitutionally restricts interstate commerce. The three-judge panel overturned a lower-court judge's support of the law because he said "the burden it imposed was not 'clearly excessive in relation to the putative local benefits.'" Judge Jerry Smith wrote that New Orleans must explore alternatives that do not eliminate out-of-state property owners, like higher taxes on short-term rentals, limits on the number of licenses issued in a given area, or mandates that short-term rental owners hire an operator to stay on the property overnight, "thus acting as the 'adult supervision' that the City ostensibly hopes live-in owners will provide."
Associated Press (08/23/22) Kevin McGill