New Orleans lawmakers are considering a new ordinance targeting Airbnb, a peer-to-peer economy company connecting tourists seeking short-term housing and hosts who provide places to stay.
In April, the New Orleans Community Development Committee, a city government committee tasked with reviewing city housing laws, recommended a new ordinance that would allow taxpayers to participate in short-term home-sharing under a framework of regulations and tax rules.
Short-term housing services such as Airbnb are currently illegal in the city, but existing restrictions on housing arrangements are rarely enforced by the government.
Kevin Kane, president of the Pelican Institute for Public Policy, says lawmakers should focus on government’s core functions instead of trying to crack down on innovative businesses.
“It is hard to imagine the city will ever be able to effectively enforce regulations and taxes on Airbnb participants,” Kane said. “The city struggles to provide and regulate some very basic services. It seems unlikely it can keep a lid on something like the vacation rental business.
“While there may be some reasonable role for the city to play in supervising the vacation rental market, the fact is that people want to stay in authentic New Orleans properties when visiting the city, and online marketplaces like Airbnb provide a valuable and necessary service,” Kane said. “An aggressive approach to taxing and regulating such a vibrant market is likely to fail.”
Spurring Urban Revitalization
Kane says taking a hands-off approach toward peer-to-peer economy housing services will encourage homeowners to improve their neighborhoods, because it ties curb appeal to homeowners’ bottom lines.
“New Orleans has thousands of dormant properties in need of renovation,” Kane said. “This activity could spur an increase in renovations that would benefit the city as a whole.”
‘Unfair to Tax Them’
John McGinnis, a constitutional law professor at Northwestern University, says governments should not treat Airbnb like commercial hotels.
“It would seem to be unfair to tax them, in my view,” McGinnis said. “I generally agree with the impulse that it’s wrong.”
McGinnis says city lawmakers would better accomplish the goal of improving housing by allowing the short-term housing market to encourage homeowners to make their neighborhoods more beautiful.
“Cities should focus on the real quality of life,” McGinnis said. “That’s better than prohibiting the rentals. Allowing the rentals will give the owners incentives to fix up the properties.”
Jenni White ([email protected]) writes from Oklahoma City, Oklahoma.
Jamila Jefferson-Jones, “Can Short-Term Rental Arrangements Increase Home Values?: A Case for Airbnb and Other Home Sharing Arrangements,” The Cornell Real Estate Review, June 1, 2015: https://heartland.org/policy-documents/can-short-term-rental-arrangements-increase-home-values-case-airbnb-and-other-home-/