A city hearing officer on Wednesday revoked the short-term rental permit from a house in the St. Claude neighborhood, issuing a $2,500 fine and demanding the owner provide confirmation that all pending bookings have been cancelled within 48 hours or face $500 daily fines.
The ruling came as a relief to Ada Phleger, who lives on the same block. As The Lens reported last week, Phleger discovered earlier this year that the house’s permit appeared to have been issued improperly and sent her findings to the city’s Department of Safety and Permits in an attempt to get it revoked.
Phleger eventually went so far as to rent out the Airbnb herself — with her mother and grandmother who were visiting town — to prove that the homeowner, Julie Groth, had misled the city on her permit application.
“I feel very heard right now,” Phleger said at the hearing. “While the whole time I was being told I was crazy.”
Phleger started looking into the house across the street from her in March of this year after she discovered that it was being renovated to be a short-term rental. It would become the fourth short term rental on her block, all managed by the same Massachusetts-based company: Heirloom, also known as Stayloom.
As of Wednesday, the company had 66 listings in New Orleans on its website, some of which average over $2,000 per night. The Lens previously confirmed the addresses of 34 Heirloom listings in New Orleans. Nineteen of those were operating with expired permits.
The New Orleans City Council has been working for a year to overhaul the city’s short-term rental regulations to make them more restrictive, especially in residential neighborhoods. But short-term rental opponents and council members have pointed out flaws in how the city currently enforces its short-term rental regulations.
One of the biggest issues, according to February memo from the Department of Safety and Permits, is that short-term rental platforms, such as Airbnb and Homeaway, aren’t providing the city with the data necessary to effectively enforce regulations. This is one of the reasons that the city’s system has become complaint based — waiting for citizens to report potential violations instead of actively ensuring compliance among all properties.
City Councilwoman Kristin Palmer recently introduced an ordinance that would change how enforcement works. One big change is that short-term rental platforms, like Airbnb, and professional management companies, like Heirloom, would need to be licensed. Currently, only the person offering a home for rent — a property owner, long-term tenant, or in some cases, the operator — needs to have a permit.
Groth’s house, which opened for business as a short-term rental in early 2019, appeared to be out of step with city regulations. The city issued an accessory permit for the house on Feb. 1, the same day Groth applied. Accessory permits, one of three types of permits the city has issued since short-term rentals were legalized in 2017, are intended to allow owner-occupants to rent out a part of their properties, from a spare room to an unoccupied half-double.
“I also looked for, and was unable to find any evidence that an individual actually resides in the house. I did not find any personal items at all in the house.”—Ada Phleger
Previously, Groth could have qualified for another type of permit: a temporary permit, which allows owners or long-term tenants to rent out whole houses for up to 90 days per year. But last year, the New Orleans City Council put a freeze on temporary permits in many historic neighborhoods, including this one. Nor could she qualify for a commercial permit — which allows whole houses and apartments to operate as full-time, year-round Airbnbs — because the house is on a residentially-zoned block.
The city requires property owners to have a valid homestead exemption on a proposed short-term rental property — proving they use the property as their full-time residence — in order to get an accessory permit. They’re also required to stay at the property while hosting guests.
Phleger’s research indicated that the property failed to meet the requirements. And, she said, Groth’s permit application was inaccurate. The application said the permit would be used for one half of a double. But Phleger found blueprints showing that the house had been renovated into a single-family home. And on the night that she and her mother rented it through Airbnb, she and her guests had the entire property to themselves.
On Wednesday, a hearing officer appeared to agree after looking at the 22 pieces of evidence submitted by the city, some of which was originally dug up by Phleger.
Groth didn’t appear at the hearing, but a lawyer was there to represent her. She still has the option to appeal the ruling to Orleans Parish Civil District Court.
City Short-Term Rental Administrator Berrian Eno-Van Fleet said that Groth did not have an active homestead exemption for this year, but she has been approved for one for 2020. A spokesman for the Orleans Parish Assessor’s Office told The Lens on Thursday that she applied for the homestead exemption in January and confirmed that the application was approved.
Among the evidence presented on Thursday were three affidavits, from Phleger, her mother and a guest who ate dinner at the house when they rented it, saying that there was no evidence that a full-time occupant lived in the house: no clothes in the closets, no photographs or personal mementos, no food in the refrigerator, no toothbrushes in the bathroom.
“I also looked for, and was unable to find any evidence that an individual actually resides in the house,” Phleger’s affidavit said. “I did not find any personal items at all in the house.”
This story was updated on Thursday, June 27 with additional information from the Orleans Parish Assessor’s Office.