New Orleans Short-Term Rental Rules: The Legal Battle and What Comes Next

The Ongoing Struggle with Short-Term Rentals in New Orleans

Walking through neighborhoods like Treme, it’s hard to ignore the transformation sparked by short-term rentals—row houses with bright doors hosting travelers, blocks where local families once knew everyone now peppered with suitcases rolling by. In a city famous for its vibrant communities, the debate around short-term rental (STR) regulations touches every street. For property managers and owners in cities such as Denver, stories from places like New Orleans serve as a real-world case study in both the challenges and opportunities that come with STR regulations.

A Brief Look at Regulation History

New Orleans began allowing short-term rentals almost ten years ago, but the ground has shifted often since then. City leaders orchestrated a series of rule changes, aiming to address resident frustration with noise and increasing housing costs, while also recognizing property owners’ interests in renting to guests.

For companies such as Airbnb and VRBO, these evolving guidelines determine how they operate within the city. Licensing, safety protocols, guest limits, and community caps are just a few of the hurdles for platforms trying to stay compliant.

Legal Pushback and Industry Involvement

The result? Multiple rounds of legal challenges. Most recently, Airbnb itself partnered with local property owners to file a lawsuit—their first time joining in as a plaintiff on this particular front. The central argument: city restrictions overstep, pressuring platforms to become the city’s enforcers and blocking property owners from fully using their own homes.

“New Orleans has implemented some of the most severe short-term rental rules in the country,” Airbnb stated, emphasizing that local hosts depend on STR income and that the broader economy benefits when visitors stay in residential neighborhoods.

What Counts as a Legal Short-Term Rental Here?

Here’s how the current system works: since 2016, only properties approved through a city permitting process can host travelers for periods of 30 days or less. Unpermitted rentals are considered illegal.

The most significant regulation? Only one permitted rental per city block in residentially zoned areas. If multiple owners apply, a lottery picks a winner. LLCs and similar corporate structures can’t secure permits, and individuals are limited to just one property.

Every rental is also required to have a full-time, onsite property manager. The point is to ensure someone local can quickly address any issues that arise—something out-of-state property owners cannot guarantee. Additionally, there are outright bans in specific districts, including the French Quarter and much of the Historic Garden District.

Exceptions and Their Status

The city made room for a handful of exceptions: previously, up to two extra permits per block could be approved, but that option was frozen in December 2024 for at least a year. Case-by-case reviews are still clearing a backlog, but the exception process itself has drawn criticism for being unpredictable and inconsistent. Data shows that most exceptions have received council approval, even when city planners recommended rejecting them.

Lawsuits Targeting City Ordinances

Airbnb and several hosts filed a suit arguing that new ordinances unreasonably limit their property rights and go against both state and federal constitutions. The main complaints focus on two issues: first, that owners are blocked from using their homes for STR income; and second, that platforms are forced to police compliance, collect data, and remove non-compliant listings.

One of the city’s measures, set for implementation in June 2025, requires companies like Airbnb to take down any listings for rentals lacking city permits—effectively putting some of the enforcement burden directly on the platforms themselves.

“We never expected to litigate against New Orleans, but these rules threaten our way of life,” shared one property owner involved in the ongoing legal proceedings.

There’s also a reporting mandate: platforms must submit monthly data about city listings, a requirement that Airbnb says forces them to breach guest privacy.

According to Airbnb’s communications team, they’ve invested in helping the city enforce these rules, offering data and digital tools, yet the city’s internal coordination and enforcement remain sticking points.

How Enforcement Actually Works

Despite the restrictive image projected by the ordinances, some say the city’s actual oversight hasn’t matched its ambition. Thousands of properties still operate without proper permits. As of February 2025, more than 2,400 licenses had been granted—about half in residential areas—while third-party research estimates over 7,000 actively listed short-term rentals.

Investigative reports and even internal city communications have highlighted a persistent understaffing problem: with few resources and limited staff, the city’s STR enforcement is often inconsistent, and in some cases, nearly absent. Recent legislative moves now put more responsibility on hosting platforms, holding them accountable for ensuring listings meet the new standards.

“Platform accountability keeps neighborhoods intact, but Airbnb hasn’t shown interest in these solutions,” commented a spokesperson for local officials.

On the flip side, Airbnb continues to point hosts toward detailed local rules and highlights its “City Portal” tool as ways to help enforce and promote legal, responsible renting.

The Road Ahead for STRs in New Orleans

All eyes are on the legal system. The latest lawsuit echoes earlier court battles, including a 2019 challenge that questioned proof-of-residence requirements for STR owners. While the city won that round, appeals are ongoing.

Officials have made it clear: if the courts overturn the city’s ability to regulate, banning STRs altogether is on the table. In fact, legislation to do just that is already waiting on City Council’s agenda, held in suspense as these cases move forward.

At the state level, the debate continues. In 2024, new bills aimed to curtail local government authority over STRs—one would have made it easier for private property owners to sue municipalities, another sought to keep cities from regulating platforms like Airbnb. For now, none of the 13 pre-filed bills in the legislature’s 2025 session have targeted STR oversight specifically, but this could change as public pressure and legal outcomes shift.

Denver’s property owners are watching closely—not just out of curiosity, but because the way New Orleans handles STRs could ripple into how cities across the country develop their own market-specific regulations. For anyone invested in the Airbnb space, what happens on these famous streets is more than just a local issue—it’s a preview of changes and debates that may soon shape rules in other communities.