Avalara MyLodgeTax > Blog > State & Local News > HomeAway offers New Orleans proposal for short-term rental rules

HomeAway offers New Orleans proposal for short-term rental rules

  • Aug 8, 2018 | Jennifer Sokolowsky

New Orleans home

As the New Orleans City Council gears up to consider possible new short-term rental rules, online short-term rental platform HomeAway has proposed policies it hopes will become part of city regulations.

This past spring, the City Council directed the City Planning Commission to expand a study on the effect of short-term rentals. The commission will make its study available to the public on August 21 and will send its recommendations for new regulations to the City Council by September 21.

HomeAway is aiming to avoid an all-out ban on short-term rentals in the city while still addressing community concerns. HomeAway’s proposal includes:

  • Limiting short-term rentals to two on each block
  • Allowing owners who renovate blighted properties to offer them up as short-term rentals for five years
  • A citywide short-term rental license cap of 6,000
  • Reversing the ban on short-term rentals in the French Quarter

HomeAway also supports raising a nightly fee that goes to support affordable housing from $1 per night to 2 percent of the rental price — and requiring the fee to be assessed on all short-term lodging, including hotels and bed-and-breakfasts.

HomeAway believes the 2 percent fee could raise about $20 million for the Neighborhood Housing Improvement Fund. Airbnb contributed nearly $550,000 into the Neighborhood Housing Improvement Fund between April 2017 and February 2018.

HomeAway is also apparently looking at collecting short-term rental taxes for its bookings.

"We are just now where we can provide that service (remitting taxes) and New Orleans is at the top of the list" to come into compliance, Ashley Hodgini, a governmental affairs manager for HomeAway, told The Times-Picayune.

HomeAway recently began collecting lodging taxes on behalf of its hosts in some locations, most recently in Washington and Oregon.

Part of New Orleans’ current short-term rental rules includes an obligation for hosts to collect lodging taxes from guests and pass them on to the government. New Orleans hosts must collect a 4 percent Hotel-Motel Sales Tax, a Hotel Occupancy Privilege Tax of 50 cents per night, and the Neighborhood Housing Improvement Fund Fee of $1 per night. Hosts must also collect a 5 percent state sales tax on bookings.

Currently, Airbnb is the only short-term rental platform that collects New Orleans lodging taxes on behalf of its hosts. Airbnb collects both the state and city taxes for hosts listing on its platform. Hosts using HomeAway, VRBO, or other platforms must collect lodging taxes themselves. MyLodgeTax can help short-term rental hosts in New Orleans comply with all lodging tax requirements.

Short-term rentals have been a source of controversy in New Orleans. In May, the New Orleans City Council placed a moratorium on issuing new short-term rental licenses for whole homes for nine months, or until the council passes new rules. The ban applies to a new “interim zoning district,” which includes the Central Business District, where most of the short-term rentals in the city are located, as well as many historic neighborhoods, including Bywater, Faubourg Marigny, Mid-City, Treme, and much of Uptown. Short-term rentals are already completely banned in the French Quarter.

Shortly after the moratorium was passed, Airbnb discontinued its “pass-through registration” system for New Orleans hosts. The pass-through registration allowed new Airbnb hosts in New Orleans to automatically apply for a city short-term rental license through Airbnb’s site as soon as they listed their property. Once the license was approved, the license number would automatically be posted on the listing.

Without the pass-through registration system, Airbnb hosts must now apply for licenses directly with the city. While hosts still have the option of posting license numbers manually on their listings, Airbnb no longer automatically posts those for them.

Short-term rentals are big business in New Orleans. A recent study from the University of New Orleans concluded that visitors using short-term rentals in New Orleans spent nearly $900 million related to their stays last year, $150 million of that on lodging alone.

The report also found that short-term rentals generated $263.1 million additional earnings for New Orleans residents in 2017, up from $56.1 million five years ago.

The city has collected about $6 million in taxes and fees from Airbnb since the short-term rental law took effect in April 2017. 

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.