City Council Calls Lawsuit an Attempt to Avoid Regulation
Airbnb has filed a federal lawsuit against the City of New Orleans, challenging new regulations that require short-term rental platforms to ensure that properties listed on their sites comply with city laws. The lawsuit comes as the city continues its yearslong battle to manage the explosion of short-term rentals, which officials say have contributed to the affordable housing crisis.
“What we’re looking at now due to Airbnb’s lawsuit is that they do not want to be regulated,” City Council President J.P. Morrell said in a statement Tuesday.
Airbnb, however, said it had “exhausted all available paths toward sensible solutions” before resorting to legal action.
Struggles to Regulate Short-Term Rentals in New Orleans
New Orleans officials have long grappled with how to balance the booming short-term rental market, which caters to millions of tourists annually, with the city’s pressing housing needs.
A 2019 policy barred short-term rentals at properties owned by out-of-state residents, but it was struck down by a federal court. In response, the city enacted new rules in 2023, requiring short-term rental owners to live on-site and limiting rentals to one per block. However, enforcement proved difficult, and many illegal listings resurfaced on Airbnb. The legality of these policies is currently under review by a federal appeals court.
In 2023, the city council took further action, adopting regulations set to take effect in June that would require platforms like Airbnb to verify that all listed properties had city permits. Morrell called the move a “game-changer” that would “gut the ability to illegally list fake permits and Airbnbs.”
Airbnb Pushes Back Against ‘Punitive’ Policies
Airbnb argues that it should not be responsible for enforcing city laws, citing the same legal protections that shield social media platforms from liability for user-generated content. In its lawsuit, Airbnb described the city’s regulations as a “highly punitive enforcement regime” and claimed the rules violate homeowners’ rights.
“It is the government’s job to enforce its laws, not Airbnb’s,” the lawsuit states.
The company also objects to requirements that it submit monthly reports to the city, disclosing confidential data such as booking numbers, taxes collected, and fees paid.
Airbnb has a history of resisting local regulations and has previously sued New York and San Francisco over similar efforts to hold rental platforms accountable.
The Impact of Short-Term Rentals on Housing
New Orleans currently has approximately 1,350 licensed short-term rental properties, according to city data. However, there are over 7,000 active Airbnb listings, suggesting thousands of unlicensed rentals are operating illegally.
Housing advocates argue that short-term rentals exacerbate the city’s affordable housing crisis. According to a 2022 report from the National Low Income Housing Coalition, New Orleans had a deficit of 47,000 affordable housing units.
“Airbnbs and short-term rentals play into that, taking residential units off the market and saving them for tourists instead of having them available for the families that want to live and work in New Orleans,” said Monique Blossom, director of policy at the Louisiana Fair Housing Action Center.
Airbnb, however, denies that short-term rentals are the root cause of the city’s housing challenges. The company argues that issues such as high insurance costs are more significant factors in the housing crisis.
City Council Divided on Next Steps
Morrell suggested that if the city is unable to regulate short-term rentals, it should consider banning them entirely.
“If we cannot regulate short-term rentals, there will not be any,” he said.
Councilmember Oliver Thomas, however, urged the city to wait for the outcome of the pending litigation before taking further action. Other councilmembers and city representatives declined to comment on the lawsuit.
Airbnb Hosts Face Rising Costs
Airbnb’s lawsuit includes several property owners as co-plaintiffs, including longtime hosts Bret Bodin and Brad Newell. The couple, who have rented out a guesthouse and loft in the historic Treme neighborhood since 2013, say they have become increasingly reliant on Airbnb income due to rising costs.
“What started off as kind of side-income turned into essential income,” Newell said. “We’re all getting hit with unexpected rising costs, and we’re just trying to keep up.”
As the lawsuit plays out in court, the future of Airbnb in New Orleans remains uncertain, with the city and the company locked in a high-stakes battle over the future of short-term rentals.
