Airbnb has arrived in the Crescent City.  After the city loosened restrictions on short-term rentals, except most of the French Quarter, it only took a license for homeowners to lease out a room.  By December 2017, in one district near the French quarter, one in 10 residences are registered as Airbnbs.Residents need a license to rent out their spaces up to 90 days a year. In October, the New Orleans City Council is moving toward restricting short-term rentals to commercially zoned areas after about 18 months of allowing “temporary” licenses in residential zones.

In February 2018, a report announced that for 10 cities with the largest Airbnb market share in the US, the entry of Airbnb resulted in just 1.3 percent fewer hotel nights booked and a 1.5 percent loss in hotel revenue. But the economic effect of Airbnb goes beyond the Hotel Industry: one study of 100 U.S. studies showed that a 10-percent increase in Airbnbs causes a 0.4-percent increase in rents.

 

Are all short-term rentals Airbnb-style arrangements in the city? Not necessarily.  The Jung Hotel, a newly renovated hotel on Canal Street has leased 111 residences on the hotel’s upper floors to the short-term rental company Sonder, which uses a smartphone application and an online website for booking. Unlike AirBnB, the only people that ever stay in Sonder apartments are guests. None of the 111 units, which had a price tag of $3,900 and $5,900 per month, ever found renters.

 

Sonder applied and received a hotel licence instead a short-term license, exempting them from the future short-term rental regulations.

 

“We’re a deconstructed hotel,” said general manager of Sonder New Orleans to Nola.com. “”It’s a different expectation of service. That’s why I think we’re the future.”

 

 

But what does the economic future look like for New Orleans and short term rentals? Unlike Los Angeles, San Francisco, or Los Angeles, New Orleans is economic profile is different. The city’s tourism industry accounts for nearly 40% of tax revenue. 18 million visitors spent more than $8.7 billion in 2017, according to the New Orleans Advocate. After Hurricane Katrina,  the city’s rebounding Tourism industry helped bring more people back to New Orleans.

 

Airbnb has shared details regarding the positive economic impact of the business, citing that Airbnb guests “stay longer and spend more in diverse neighborhoods throughout the city.” In 2017, Airbnb said that they delivered  $3 million in fees and taxes for short-term rentals for the city.

However, a study released in July tells a slightly different story about how short term rentals are changing the city. The study, which utilized data from  from the Bureau of Labor Statistics, the Census and Airbnb in addition to Yelp reviews, showed that while  white “Airbnb” neighborhoods saw a growth in restaurant employment, restaurants in black or Latino “Airbnb” neighborhoods did not see a similar increase in employment or Yelp engagement.

 

In New Orleans, the parts of the city that have the highest Airbnb concentration are nearly are nearly 50 percent white, compared with 34 percent in the city as a whole.

In study by Loyola University New Orleans professors John D. Levenis, Ph.D., and Mehmet F. Dicle, Ph.D. from 2015 estimated that the Airbnb’s visitors accounted for 4,480 additional jobs that year, with a total value added to the New Orleans economy of 135 million dollars.

Since deregulation in 2017,  locals say that the economic benefits of Airbnb are speeding up the pace of gentrification in the city as well. An investigation by The Lens and HuffPost reported that though tourism lowers crime rates and and cleaner streets, rising rents and home prices are pushing long-time residents out.

“On our block we didn’t have neighbors; we had guests living on our block Thursday to Sunday,” said Christian Rhodes, a New Orleans resident to Huffpost. “Airbnb kind of guaranteed there would be no families.”

 

Sources:

 

https://www.theadvocate.com/new_orleans/news/business/article_3e30be30-5301-11e8-ac87-2f04ffdf5e01.html

https://unsplash.com/photos/ZofZqMM3UU0

https://www.nola.com/politics/index.ssf/2018/10/sonder_jung_hotel_short-term_r.html