Study shows Airbnb has positive economic impact for New Orleans
An independent study performed by Inside Airbnb reveals that property owners have benefited from the growth in short-term rentals. Here are some of the facts they have discovered:
- Property owners tend to make a little more than $2500 a month through rentals.
- Two-thirds of properties are entire houses and apartments, the rest are either single rooms or shared rooms.
- A little less than half of Airbnb hosts have multiple listings.
- Those who rent out properties tend to be tourists.
- The average nightly rental rate for Airbnb is $167 a night, compared to an average hotel room cost of $138 a night.
- Airbnb properties are generally located in upscale sections of the city, such as the French Quarter and Uptown.
One of the concerns of neighborhood activists is that owners would prefer to use their properties for Airbnb rentals rather than long-term rentals to tenants. But in the case of New Orleans, most Airbnb listings are in sections of the city not known for affordable housing in the first place. Airbnb properties are not apparently playing a role in gentrification of poorer sections of the city — at least, not yet.
The target market for Airbnb in New Orleans are tourists who want the opportunity to stay in historic properties and have a firsthand experience of the history of New Orleans. These are properties that often are more expensive to maintain, due both to their age and to historic preservation rules. Space-sharing is a way keep those more expensive properties in commerce, instead of sitting fallow for long periods of time.
The report also show Airbnb has provided more accommodation options for tourists in general, which is important for the city’s numerous big events, such as Mardi Gras, Essence Festival, the Sugar Bowl and Jazz Fest. It allows the city to increase its available accommodations and allow more tourists to come into the city and to spend more money. The availability of Airbnb also serves as competition to the hotel/motel industry, which keeps the cost of hotel rooms in check for those who prefer that route.
Considering that most of the available Airbnb rentals in New Orleans are entire houses and apartments, it still provides a better bang for the accommodation dollar. As tourists get better value for their money, it leaves them more money to spend in the city. The obvious winners are local businesses and even the city government, which benefits from increased sales-tax revenue.
Despite Airbnb’s benefits to the city, members of the New Orleans City Council are planning new ordinances that would continue to restrict its use. Currently, short-term rentals are formally banned. New Orleans Councilwoman Stacy Head is proposing an ordinance that would legalize Airbnb, but with the catch though that it would outlaw renting entire properties and non-owner occupied properties through the service.
While legalizing and regulating Airbnb and other similar services would be an improvement over the status quo, the proposed restrictions are troubling. However, Head does offer one “carrot” to space-sharing renters that is intriguing. As a way to engage the Airbnb community in helping to bring New Orleans’ more than 10,000 blighted properties back into commerce, it would allow owners who agree to fix up the properties to use them for short-term rentals, for at least a few years.
The idea is that the space-sharing landlords would help stabilize property values and allow the neighborhoods in question to become more desirable, while simultaneously increasing the supply of affordable housing. This would in turn diminish the upward pressure on rental rates for long-term residential properties.
Regardless what direction the City Council goes on this particular ordinance, it appears that even the critics of Airbnb have conceded that it has a role to play in the future of New Orleans.