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A NEW ORLEANS TRIBUNE EDITORIAL:

AN OPEN LETTER TO THE NEW ORLEANS CITY COUNCIL AND CITY PLANNING COMMISSION

When are short-term rentals acceptable? City officials and business leaders recently celebrated a ribbon cutting at 1016 Canal Street, a building that real estate acquisition and management company Sonder will be converting into 47 downtown apartments to be rented in the short-term market for more money per night than some folk in this city earn in week. Meanwhile, owners of residential property fear they will be prevented from turning a profit on their investments by the city’s STR policy.

Let’s get real.

If the debate about short-term rentals was really about neighborhood integrity, the culture of this city and affordable housing, there would be no debate

Those issues are real, to be sure. But when have they ever created the sort of contestation, contemplation and consideration that short-term rentals have commanded over the last year or so. It seems as if city leaders are spending more time discussing short-term rentals than they do the city budget. And big business is more concerned about stopping regular folk from benefiting from the industry than they are about offering living wages.

Actually, it makes perfect sense because the anxiety and alarm over short-term rentals is all about profit. The big boys—corporate giants in the hotel and real estate industries simply want it all. They have even entered the short-term rental industry themselves. Name nearly anyone of them—the Marriot, the Hilton, the Hyatt—they are making investments in the short-term rental industry across the globe.

Locally, hotel developers are inking high-dollar deals with real estate firms to manage dozens of ritzy apartment units inside hotels on the short-term market. For some reason, this is okay. Why?  And where is their responsibility to the affordable housing crisis? Surely if a big-time local developer can build a hotel filled with luxury condos and penthouses, he can build an apartment complex filled with affordable units. And if local people that have invested in residential property across the city can somehow be blamed for the lack of affordable housing, surely the a developer with deep pockets bears some responsibility.

Local property owners that have finally gotten the opportunity to reap some reward from the multi-million dollar tourism industry, a decent profit from an investment or two now wait in fear for city leaders to pull the rug from under them with rules designed to cut them out the industry. Meanwhile, members of the City Council are crossing their fingers that 200 walk-up condos and apartments along Canal Street will be a boon for the city when they are converted to short-term rentals. Real estate acquisition and management giants like Sonder get a ribbon-cutting—A RIBBON CUTTING—for 47 downtown apartments that, instead of being offered as affordable housing options for poor and working class New Orleans that toil in the hospitality industry or at an area hospital, school or police station in this city, will be rented in the short-term market for more money per night than some folk in this city earn in week. Our city leaders applaud this, but assail local men and women who are just trying to get ahead. Let’s see, so far that is 245…246…247 apartments that could be rented in the heart of the city at rates people can afford going on the short-term rental market and our leaders are excited about it. Yeah, so how we’re not buying that weak argument about how STRs are pricing poor New Orleans out of the city.

Let’s get real.

Short-term rentals have not come under attack because they are responsible for the city’s affordable housing crisis or because they are dismantling neighborhoods. Those pretexts have been successfully used by anti-STR interests to fool some people in this city. But the reality is that STRs have come under attack because they pose competition for the hotel industry. The people that “oppose” short-term rentals in neighborhoods across the city don’t really want a responsible industry. They want a monopoly on the industry.

Let’s get real.

There is actually no such thing as “anti-STR”. If there were, city leaders would not celebrate Sonder with a ribbon-cutting, yet debate when a local property owner rents out a house to a short-term visitor in the 7th Ward or the Garden District or Mid-City. The folk that are pretending to be anti-STR are just against regular people having an opportunity to benefit from the STR industry because it takes away just a tiny bit from their bottom line. They want it all. They are greedy. And that is real.

The STR debate that has raged in New Orleans is NOT fair. And it isn’t about affordable housing or neighborhoods either. It is about the almighty dollar.

Let’s Get Real.

If you are looking for an honest assessment of the city’s affordable housing problem, disregard the bogus arguments against STRs that are being floated and funded by millionaire hoteliers and developers to stop small-time, middle-class New Orleanians from profiting from their residential real estate investments. Thirty-two percent of local STR operators are African-American—men and women who are trying to make use of a small-time wealth building opportunity to strengthen their family’s future and create generational wealth. The issue of STRs is about economic equity and parity at its core.

And if you really want to understand how New Orleans has arrived at this place—the place where 61 percent of renters pay more than 30 percent of their income on housing and 36 percent are severely housing cost burdened, meaning they pay 50 percent or more of their income on housing—we will be glad to tell you…AGAIN.

Under the guise of “de-concentration of poverty”, the poorest residents of this community were pushed out when public housing was demolished. Private developers were allowed to benefit from the redevelopment of public housing, creating fewer units with only a portion made available to residents that relied on subsidized housing and offering the rest at top-dollar market rates. More working poor and even middle-class New Orleanians soon began to feel the push as well, as they watched their long-time neighborhoods gentrify and property values (along with tax bills) soar. They felt the pinch even more so as home prices and rental rates skyrocketed over the last 13 years. Meanwhile, over the last decade, developers have been given the go ahead to build thousands of luxury condos and over-priced rental units to attract newcomers and entice the well-heeled to return from their post-segregation suburban retreats with little or no attention to the mostly Black, working and middle-class New Orleanians who have always been here and who make New Orleans the cultural jewel that it is, but who cannot afford $1500 a month rent for a one-bed, one-bath apartment. Make no mistake about it, the people struggling to pay rent or mortgages, insurances and taxes…the people getting priced out and pushed out of the city—many of them are the people that the shadow government never wanted to return to New Orleans after Hurricane Katrina in the first place. This affordable housing crisis was not happenstance. It was by design. In fact, it seems to us that our city’s business and political leaders didn’t even recognize or at least want to admit that New Orleans had an affordable housing crisis until unintended targets couldn’t afford to rent or buy a decent place in New Orleans either. All of a sudden, leaders and experts want to make clear that “affordable housing” is not just subsidized housing or housing for the poor. Now that people who earn good wages and salaries can’t afford to live in the Big Easy, we really have a problem. Uh…ever consider that we wouldn’t have to worry about how “hard-working, middle-class, good-wage earning” New Orleanians could afford to live here if we would have given a damn about how “hard-working, poor, low-wage earning” New Orleanians could afford to live here too.

Nonetheless, here we are smack in the middle of this crisis. And the men and women who returned to New Orleans and remained in New Orleans, managed to hang on to homes and even invest in a property or two are threatened as the campaign mounts against STRs. It’s clear that the big-time developers want it ALL.

Why else would they take time from their busy schedules to sit in on a neighborhood meeting at the Corpus Christi auditorium where attendees were spoon-fed, perhaps even force-fed, a false narrative about the big, bad STRs? Why else would they reach into their deep pockets to fund organizations like Jane’s Place, which received more than $400,000 in 2017. By the way, there is no hard data that points to the claims STR opponents have made. There is nothing that indicates that crime or nuisances have increased in the communities where STRs are located. There are no statistics that categorically point to STRs as a cause of the affordable housing crisis. In fact, although about 4000 STR licenses have been issued, only about 2100 are in use, roughly 2.1 percent of the city’s housing stock.

Let’s Get Real.

These anti-STR groups only feign concern about the city’s “mounting housing crisis”. To all of the self-righteous anti-STR folk now clamoring about neighborhood integrity, the culture of the city and housing affordability, where were you when public housing residents—many of them the city’s real culture bearers—were mocked with blown kisses and tossed to the wind?

By 2015, more than $543 million had been invested in the construction of about 7,500 housing units in the decade following Hurricane Katrina. So why does New Orleans still desperately need housing that its citizens can actually afford? Why? Because developers have been busy building housing for the people they want to see in New Orleans as opposed to the people that are here. New Orleans is demographically richer and whiter than it was before August 2005. Ah, but it seems someone didn’t think this thing through; and NOLA still is not rich enough or white enough for a charter school teacher to afford $2500 month for a decent three-bedroom apartment or the mortgage on a $500,000 house in the ever-gentrifying 7th Ward or $300,000 for a modest 1,500 square-foot cottage in Broadmoor so their family of four can live comfortably. That’s why we have a crisis.

And all of this has transpired as the city’s leaders watched and approved development after development. It transpired as greedy outside interests and some inside ones, too, took advantage of a ravaged city, gobbled up property to resale at inflated costs. Now, those same developers with their “build it and they will come” mentality are using smoke and mirrors to blame STRs with one hand, then turning to ask for more corporate welfare with the other so that they can build more tony hotels and more high-priced condos, penthouses and so-called luxury rentals that are out of reach of regular folks. Thank you, BGR for lending your influential voice in opposition to such plans.

Give us a break!

If STRs are outlawed and small property investors are forced to sell their real estate, the indigenous people that have been and are being driven from their “land” will not benefit. Their neighborhoods will continue to gentrify and be priced out of reach.

But thankfully, the CPC has stopped for a minute to give more thought to the issue. Lots of suggestions are being made, including requiring a homestead exemption in order to have a property licensed as a short-term rental. Okay, let’s think about that. Y’all know full well that local residents are using their homestead exemptions for the homes they live in. They want STR licenses for a few investment properties. To require a homestead exemption to use a property as a STR is the same as prohibiting locals from the industry. It will shut out nearly every small-time property owner that calls New Orleans home, leaving only a handful of folk that claim homestead exemptions on small multi-family units, like duplexes. The rest of the STR operators will be out-of-town and out-of-touch corporations and big-time developers. Once again, big business wins. And that’s great for the one percent. Giant corporations will have a lock on the industry, while the people we see every day will have to go back to figuring out how they can afford mortgages, insurances, taxes and maintenance costs on a handful of properties without charging astronomical rent that many New Orleanians couldn’t afford any way. In other words, stopping regular folk from benefiting from the STR industry will NOT fix the city’s affordable housing problem. Local investment property owners will have to put their property on the market for at least $2000 a month or more to meet their bottom line, effectively making those units just as inaccessible to local, low-wage and even middle-income earning renters as listing them for $200 a night on Air BnB.

If you want the STR industry to contribute to addressing the issue the answer is simple. Allow both local property owners and corporations to participate. But give priority consideration for licenses to residents and regulate them accordingly, with rules that fit each situation. Create a reasonable cap for what is considered a small STR operator and one for what characterizes a larger operator as well. Be fair and practical. A developer that constructs a downtown apartment complex then converts nearly all of the units into STRs is a hotelier, not a short-term rental operator. The rules you should be working on now ought to focus on preventing that from happening…again. It is unfair and unrealistic to have rules that apply to a local owner with three or four investment properties and apply those same rules to some real estate giant. That’s how you get one guy with 100 STR units in buildings in the CBD instead of 100 housing units that hotel and restaurant workers, many of whom are earning less than $8 an hour, could afford. Finally, tax the industry and earmark the revenue to fund policy and programs that support affordable housing solutions.

For full disclosure, the publishers of The New Orleans Tribune are operators of short-term rental properties. And they also fight against gentrification and the deconstruction of their neighborhoods. For every short-term rental that they operate, they offer a quality, affordable housing unit—a full one-to-one ratio. They don’t get tax credits for renting a home at a rate that a hardworking mother can afford to pay. They do it for the same reason they began investing in properties decades ago—to preserve the integrity of neighborhoods, especially those that Black New Orleanians have historically called home. And yes, operating a few STRs has now made it more practical for them to offer long-term housing options that locals can afford. But they have always been compelled to help working people remain in their communities without any inclusionary zoning incentives from the government, and they are going to keep using properties they own to create spaces for locals to live, work and even operate businesses regardless of what ultimately happens to STRs because it is important to them.

Still, we are concerned by any suggestion that would require small-time short-term rental owners to somehow mitigate the affordable housing crisis. This suggestion only makes sense if we are talking about huge corporations that own scores of apartment units, condos, and houses across the city. We all know who they are. Our city celebrates them. Word of their business deals makes the news. But, these are the entities for which short-term rental rules need to be tightened and restrictions placed on the number of units they can own. But for small-time property owners, local residents that have a few investment properties that they are now able to use to help make ends meet, save for retirement, send children to college and otherwise live their best lives, forcing these resident-operators to address an issue that our own city leaders have dropped the ball on would be preposterous. Our leaders have failed to hold the feet of big-time, wealthy developers to the fire when it comes to addressing affordable housing. It would be unjustifiable and absurd to create rules to make, say . . . a retired teacher or police officer with a couple of investment properties on the STR market responsible for bailing New Orleans out of the affordable housing crisis.

In fact, the only thing more absurd than that would be blaming a retired teacher or police officer with a couple of investment properties for the affordable housing crisis.

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