On Thursday, June 8, 2023, the New Orleans City Council passed what may be its last of a series of Interim Zoning Districts (“IZD’s”) targeting the Short-Term Rental (“STR”) industry. The Motion and Amendment, both proposed by Councilmembers Morrell and Harris, passed the council unanimously. Among other limitations, the IZD prohibits new Commercial Short-Term Rentals (“CSTRs”) anywhere in the City.

An initial motion attempted to create an IZD covering the entire City of New Orleans, prohibiting CSTRs, Hotels, Motels, Timeshares, and Hostels as allowable uses. The initial motion was also susceptible of an interpretation that would have drastically limited the City’s usual “grandfathering” process for properties where the owner has expressed an intent to engage in a permitted use and made progress towards that use before the use is prohibited.

The motion was met with harsh criticism from developers, especially hoteliers. The authors deferred the bill twice and offered the amendment that was ultimately passed. The amendment removed mention of Hotels and Motels from the motion entirely. It limited Timeshares, while leaving only Hostels and CSTRs in the category of wholly prohibited uses. The amendment also removed the language limiting the City’s grandfathering practices.

When the dust settled, the City Council effectively cut off any new applications for Hostels and CSTRs city-wide for a year. Those business that already have those licenses will face the City’s complex rules governing vested property interests and existing uses.

Sternberg, Naccari, & White represents many property owners who operate Commercial and Non-Commercial Short-Term Rentals. The regulatory landscape changes almost constantly. Contact Graham Williams for more information.