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Airbnb gentrifies Black New Orleans neighborhoods, report says

3rd April 2018   ·   0 Comments

By Meghan Holmes
Contributing Writer

Short-term rentals are pushing Black residents out of their neighborhoods. That is the conclusion of a report released last week by local affordable housing group Jane Place Neighborhood Sustainability Initiative (JPNSI) on the impacts of short term rentals in New Orleans.

Overall, the research finds that short term rentals accelerate gentrification and displacement of African-American residents through both increases in home costs and the removal of homes from the market as a result of short term rentals.

Compiling information from New Orleans’ permit database and online short term rental platforms’ usage reports, as well as data from the website Inside Airbnb, JPNSI found that, since 2015, the number of short term rentals in the city listed on Airbnb has increased from 1,764 to 5,215. More than three quarters of these short term rentals are whole home, single units, as opposed to an accommodation within an operator’s residence. Currently, more than 2,000 short-term rentals operate in New Orleans illegally, without a license. There are around 4,300 licensed short-term rentals.

“Above all else this is a housing issue,” says JPNSI program manager Breonne DeDecker. “Airbnb purports to be a home-sharing service that helps homeowners make ends meet, and our report exposes that as a lie. Residents are being displaced by tourists, and what’s happening is not home-sharing, but a hotelization of residential housing.”

The recently released study, “Short Term Rentals, Long Term Impacts,” utilizes information collected since the city began regulating short-term rentals in 2017, leading to a shared data system between regulators and short term rental platforms. City officials can access anonymous data on short-term rental permit holders (and subpoena more detailed information on users), but JPNSI argues that the system has significant flaws.

“Loopholes make it easy for commercial entities to gobble up thousands of homes for hotel rooms, and we can’t enforce what little restrictions we do have in place,” DeDecker says.

Research shows that some permit holders use different name spellings and/or register permits under the names of employee, making it difficult to know how many short term rental permits an individual or corporation may have received. Currently, 18 percent of permit holders control nearly half of the licensed short term rentals in the city.

“The top 10 operators in the city control 568 units of housing,” DeDecker says. “That’s the equivalent of five apartment buildings the size of the Maritimes, which is eighty percent short-term rentals right now. These are not financially strapped people occasionally renting out space.”

The report also illustrates the powerful economic incentive fueling short-term as opposed to long-term renting. An apartment in the Seventh Ward, with an average price of $1,000 per month, costs a New Orleanian roughly $32 a night to rent. An average short-term rental in the same neighborhood rents for $187 per night, meaning that six nights on Airbnb produces the same amount of revenue as an average month of rent.

“We empathize with neighbors capitalizing on this as an opportunity to pay bills and living expenses, however the majority of short-term rentals are not operated by our neighbors,” says Lydia Nichols, public programs coordinator with JPNSI. “Many of these entities are based out of state.”

The report also shows that certain neighborhoods have been disproportionately impacted by short-term rentals, and contends that historically Black neighborhoods around the downtown area — ones that previously did not have a tourist focus — have felt the greatest racial out-migration, in part perhaps due to short term rentals.

According to the report, “the historically Black neighborhoods with the highest concentration of STRs have all experienced tremendous declines in number of Black households. [Comparing the maps] [a]longside one another, the displacement and license maps lead us to infer that STRs are capitalizing on and contributing to the displacement of Black Communities.”

Black households declined from 79 percent to 46 percent in Tremé; from 90 percent to 65 percent in Mid-City; and from 75 percent to 45 percent in Leonidas/Pigeon Town, the report notes.

“I grew up in Central City, where short-term rentals have increased 178 percent,” Nichols says. “After Katrina, my family was displaced for a year but they came back, spending years rebuilding while we lived upstairs in a gutted shotgun. Many of my friends from childhood can’t, partly because of rising rental costs, and residential homes being converted into short-term rentals. Where do all these people call home now?”

There are no limits on the number of homes or apartments per block permitted for short-term rental use, and certain blocks of Central City, the Seventh Ward and Tremé have seen significant shifts away from long-term African-American residents and towards short-term rentals on a block-by-block basis. Twelve legal short-term rentals operate on the 1200 block of Kerlerec Street, meaning 61 tourists can spend each night on the residential block.

“These neighborhoods have amenities tourists want but residents need,” says DeDecker. “The city’s permissible short-term rental laws have enabled and encouraged intense disruption in housing markets due to speculative investments, leading to higher purchasing costs and higher property values. These are commercial ventures driven by profit, and that’s impacting costs for New Orleanians,” DeDecker says.

The study also offers recommendations to city officials and individual residents to mitigate the negative impacts of short-term rentals.

Moving forward, JPNSI’s study advocates for changes to the city’s short-term rental policy, including more accountability on the part of short-term rental platforms.

“We want platforms to remove illegal listings, and we want them to be penalized, if they don’t comply,” Nichols says. “We also want short-term rental permit eligibility to be limited to New Orleans residents.”

In addition to these regulatory changes, Nichols also emphasizes that individual decisions impact housing access and affordability.

“We are calling on cultural groups, institutions, musicians, everyone, to make a pledge to support housing access and encourage visitors to stay in hotels and designated tourist areas,” Nichols says.

This article originally published in the April 2, 2018 print edition of The Louisiana Weekly newspaper.

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