How to Obtain a Short Term Rental Permit in New Orleans

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Short term rentals in New Orleans have taken off in recent years. Offering a number of benefits, including better amenities, more space, and comfort, they are increasingly becoming the preferred option for travelers looking to explore The Big Easy. But a wider choice of accommodation isn't just good news for adventurers.

​​It's a fantastic opportunity for real estate investors and homeowners who wish to make money by listing their properties, either full-time or part-time.

For years, the mostly unregulated short-term rentals have sparked heated debates over their impact on local communities. In response to locals' complaints, new regulations have been introduced in New Orleans, making acquiring vacation rental permits trickier than before.

What steps do you have to take to legally operate a short term rental in New Orleans? Are there any rules you must follow? We find answers to these and other questions in the article below.

How Are Short Term Rentals Regulated in New Orleans?

While there is still no data about how many visitors New Orleans welcomed last year, the Louis Armstrong International Airport report shows an 8.4% growth in passengers arriving at MSY. With more travelers visiting Crescent City, demand for accommodation increases, providing an opportunity for real estate investors looking to enter the market. But keep in mind this is only possible with a short term rental (STR) permit.

So how can you get one? You'll have to go through an application process regulated by New Orleans' Short Term Rental Administration. According to it, a short term rental is considered any property rented out for less than thirty consecutive days.

In March of 2023, several new regulations were introduced, which now makes it more challenging to acquire a permit. Nevertheless, it's possible! But you must follow a couple of steps.

Determine Which STR Permit You Need

The first step in getting a vacation rental permit is figuring out which type you need – a Non-Commerical STR (NSTR) or a Commercial STR (CSTR). This depends on your property's zoning district and your relationship to it.

Generally, NSTR permits are given out for rentals where the owner or their operator lives on-site. CSTR permits, on the other hand, can be acquired for commercial or mixed-use properties.

But even before applying for a permit, you should carefully consider the location of your future rental. Keep in mind that the number of short term rentals allowed per square block is currently limited. According to the new regulations, there can only be up to three properties per square.

Of course, usually, more people apply than permits are given out. That's why the city organizes a lottery to determine who gets the first permit. If you lose the lottery, you can still apply for the special exemption process to potentially acquire one of the two remaining permits allowed per square block.

Ensure You Meet the Necessary Requirements

Last year brought a significant update for those interested in the rental market. Now, if you own a property you'd like to rent out, you or your operator have to live there too. This new rule means that instead of buying a place just to rent it out, you'll need to make it your primary residence or have an operator live on-site and obtain an operator permit.

This, consequently, also means that having multiple real estate properties rented out is currently not an option. The new regulations allow only one short term rental permit per owner/operator. Those already owning several vacation properties must decide which they'll put into business.

Always Monitor Updates

As you can see from what we've explained above, getting a short term rental permit in New Orleans can be tricky, especially if you'd like to operate your vacation rental in a prime spot. The good news is that some of these rules might change, as they've come under much legal scrutiny. So, to ensure you're following all the necessary regulations, make sure to check for updates regularly.

Need Help Acquiring a Short Term Rental Permit?

Keeping up with the changing requirements is quite a hassle. But if you go through the process of getting a permit, the struggle will certainly pay off.

One way to reduce some of that weight on your shoulders is to get help. I specialize in STR acquisition as a realtor at the largest local brokerage in New Orleans. My goal is to help ensure the process will be as smooth as possible and that your property will be as profitable as it can be.

So, if you're hoping to get into New Orleans' short term rental business, I'd love to help you! I can even connect you with the city's best vacation rental management services. Just reach out to my friendly team here, and we'll discuss all the details.

FAQ

1. What specific criteria does the New Orleans Short Term Rental Administration use to determine the eligibility of properties for STR permits?

The eligibility for a short term rental (STR) permit in New Orleans involves an understanding of the property's use, including tax, licensing, permit history, zoning restrictions, and code compliance. A complete list of requirements can be found here.

2. Are there any costs or fees associated with applying for and maintaining a short term rental permit in New Orleans

The fee for obtaining a Non-Commercial Short Term Rental (NSTR) License is $500 (plus a $50 application fee), whereas the expense associated with acquiring a Commercial STR permit is $1000. These amounts (except the application fee) are the same as the annual renewal costs.

3. How does the lottery system for short term rental permits work in New Orleans?

The lottery system is used when the number of applications exceeds the permits available for a specific area (on a per-square block basis). Lotteries are conducted quarterly, and the selection process is live-streamed to ensure transparency. More information can be found here.