Governmental Affairs Committee Meeting: Short Term Rental Enforcement City of New Orleans August 29, 2019 Contents I. Current STR Enforcement Efforts and Quality of Life Spending II. Updated - STR Enforcement Efforts City of New Orleans 1 Current STR Enforcement Efforts Current Direct STR Enforcement Efforts In the last 3 years, Safety and Permits has adjudicated cases that touch approximately 20% of all short term rental listings, both legal and illegal STR Cases by Year 1600 1400 Status 1200 1000 800 1454 600 1342 937 400 200 2017 2018 2019* Investigation 114 340 353 Adjudication Pending 178 229 235 Adjudicated 239 173 46 Closed in Compliance 891 588 300 Case Review 32 12 3 *YTD through Aug 15 0 2017 City of New Orleans 2018 2019* 3 Current Direct STR Enforcement Efforts (cont’d) As part of Council’s request (R-19-7) to examine STR enforcement efficiencies, the Administration explored the need for 24/7 staff to respond to complaints Average Contact per Day of Week Average Hourly STR Contacts 1000 1600 900 1400 800 1200 700 1000 600 500 800 400 600 300 400 200 100 200 0 0 Sunday Monday Tuesday 311 Wednesday Email Thursday Friday Saturday In Person 311 City of New Orleans Email In Person 4 Other STR Enforcement Efforts Beyond direct costs, multiple agencies provide support STR licensing and enforcement efforts Examples: - Neighborhood Engagement will continue to exist as a point of access for bringing complaints to the City’s attention - Public Safety agencies will respond to disruptive and suspicious activity at STR units - Legislation and rules involve Council, Mayor, CAO, CPC, etc. - Physical location for enforcement includes property management City of New Orleans 5 Quality of Life Fund Disbursement The state collects and appropriates the funds and enters into a CEA with the City for disbursement State Appropriation CEA Drawn One-time (fund balance) $2.0M $2.0M $2.0M Recurring SFY 18/19 $6.2M $6.2M $4.1M + pending Recurring SFY 19/20 $4.3M pending pending City of New Orleans 6 Quality of Life Spending The City submits documentation to State Treasury to draw down the QoL funds as reimbursement Short Term Rental Code Enforcement Costs ($) City of New Orleans Estimated PERSONAL SERVICES Salaries Related Benefits TOTAL PERSONAL SERVICES OTHER OPERATING Travel Advertising Printing Insurance Maintenance of Equipment Maintenance of Office and Grounds Rentals Software Licensing Dues and Subscriptions Telephone and Internet Services Postage Utilities Other Office Supplies Acquisitions and Major Repairs TOTAL OTHER OPERATING TOTAL Personal Services Other Operating TOTAL COST 2,500,000 750,000 3,250,000 CEA 1 ($2M) 7,461 3,169 40,143 196,243 304,926 949,433 107,606 13,458 3,758 84 20,249 233,845 2,748 32,026 91,179 2,006,329 2,500,000 750,000 3,250,000 CEA 2 ($4.3M) 9,035 333 34,644 204,248 733,339 1,866,515 70,932 3,250,000 2,006,329 5,256,329 3,250,000 4,127,210 7,377,210 4,378 16 5,921 697,893 388,819 45,447 65,690 4,127,210 Agency Expense Assumptions CEA Percentage Agency Name 2.5% CLERK OF CRIMINAL DIST COURT FIRE MISCELLANEOUS POLICE REGISTRAR OF VOTERS 6.1% CHIEF ADMINISTRATIVE OFFICE CITY PLANNING COMMISSION CIVIL SERVICE COUNCIL HEALTH HISTORIC DIST LANDMARKS COMM. LAW MAYOR OFFICE OF INSPECTOR GENERAL PROPERTY MANAGEMENT PUBLIC WORKS SANITATION VIEUX CARRE COMMISION 12.2% FINANCE 21.1% SAFETY & PERMITS 7 Potential Revenue Implications Changes to STR regulations will have an impact on the revenue the City receives from STR sales taxes 9000 Ineligible Units 25% 50% 75% Estimated Revenue Reduction* ($2.55M) ($5.1M) ($7.65M) 8000 7000 6000 5000 * Depends on occupancy and rental rates of ineligible units which cannot be determined; Assumes all units have the same rates 64%-76% of Current Listings 4000 • The revenue loss could change depending on which units will no longer remit sales tax. 3000 2000 1000 0 Permitted STRs Listed STRs • The decrease in revenue would be offset by any net increases in STR permit fees for use in the City’s general fund ESTIMATED Eligible Under New Regulations Ineligible Under New Regulations City of New Orleans Note: Commercial permitting is assumed to have no change 8 Updated - STR Enforcement Efforts Updated STR Enforcement Efforts Additional STR enforcement efforts are being explored across multiple departments and will be implemented in at least two phases Phase I - Key Functions  Oversee hearings, appeals, caseprep, and craft related procedures and policy  Provide support for hearings, appeals, case-prep, and craft related procedures and policy  Ensure compliance with safe harbor provisions  Conduct investigations of illegal listings  Conduct additional audits and tax collection enforcement  Conduct additional audits and tax collection enforcement City of New Orleans Phase II - Key Functions 10