New Orleans attempted to control short-term rentals with a lottery system. It was a mess

In the fight to regulate short-term rentals, New Orleans had a novel idea: it would hold a lottery. The plan was simple: Divide the city into blocks and use a hand-cranked lottery machine to draw numbers, allowing one rental property per residential block. For the winners, the prize was a license to continue listing their property on sites like Airbnb and Vrbo. For the losers, despair.

But the controversial rules, adopted in March 2023, resulted in only one lottery before being temporarily suspended by a federal judge in August. As the city awaits a final decision, short-term rentals in New Orleans have remained in limbo. The city said it is no longer accepting applications for the short-term rental licenses it requires from hosts and is not renewing existing ones. And, until the court issues a final ruling, the lottery balls have stopped spinning and the city has suspended enforcement of its final licensing rules.

The limbo stems from an ongoing lawsuit against the city by a short-term rental services company and a group of hosts who couldn’t even enter the lottery because of narrow licensing rules.

Like many popular tourist cities around the world, New Orleans has many short-term rental listings. On Airbnb alone, there were nearly 7,000 listings as of early September, the majority of which were entire homes or short-term rentals, according to Inside Airbnb, a housing advocacy group that tracks Airbnb data. This represents approximately one registration for every 54 residents. For comparison, New York City had one Airbnb listing for every 220 residents before enacting a sweeping law that caused the number of listings to plummet.

The average apartment rent in New Orleans is about $1,350 per month, but the average nightly price for an Airbnb in the city is $198 per night, according to Inside Airbnb. That’s almost $6,000 per month if you book every night. Officials say there are nearly 9,000 short-term rental listings in New Orleans, although the city did not respond to WIRED’s questions about how it tracks that number. More than 200 of them have been added in the last month.

Dawn Wheelahan, an attorney representing those suing New Orleans over lottery laws, disputes the idea that the city has too many Airbnbs. In a court document using city data, Wheelahan mapped which blocks would have multiple short-term rental applicants and found that most had only one applicant, while more than 50 blocks had three or four candidates and only one bloc had five candidates. “I just don’t see there being a proliferation” of short-term rentals, Wheelahan says.

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