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A sign sits in the window of a home on Ursulines avenue that is next door to homes with short term rental permits in the Treme neighborhood in New Orleans, Tuesday, March 12, 2019.

New Orleans city planners are warning against proposals to allow all residential short-term rentals that have previously had licenses to operate to remain open even if new, more restrictive regulations are adopted this summer.

In a study released this week, the planners also poured cold water on suggestions to create areas of the city with laxer regulations so as to spur economic development there — at least until there’s a chance to see the impact of the new rules.

But the planners suggested there could be benefits in allowing exemptions to the new rules to spur historic preservation or to accelerate development along some commercial corridors.

The study adds yet another element to the City Council’s calculations as it decides how to regulate an industry built around renting homes to tourists through sites like Airbnb and HomeAway.

The council is considering a broad framework that would limit residential short-term rentals to properties whose owner lives on the site. Just last week, members introduced the first set of rules governing how those laws would be enforced.

The planners' latest study was set in motion by the council last year at the same time it started revisiting the more general short-term rental rules. It asked the City Planning Commission to look at suggestions from short-term rental owners, and some council members, to allow people who ran licensed short-term rentals under the old rules to continue to do so even if the new rules would ban them.

The main category of rentals that would be affected by the expected new rules would be entire homes that formerly could be rented out for up to 90 days a year. The city stopped issuing that type of license last year and they have expired, though there is evidence that many or even most of those owners are still renting their properties illegally.

On the question of grandfathering in existing rentals, the planning staff replied with a resounding “no.”

“This is fraught with potential complications as there would be issues of ownership changes, new permanent tenants and potential legal challenges based on the new system,” according to the study.

While some owners may have spent thousands of dollars to convert their properties to short-term rentals, the report notes that the limitations of such licenses “could not have been more obvious” and should have been part of the calculation for buyers.

“In any of these cases in residential districts, the property owner will still have the option to rent to a full-time tenant,” according to the report. “Given New Orleans’ residential rental rates, this should still be a profitable option.”

The report does say the City Council could consider allowing commercial short-term rentals, which are generally large-scale operations in condos and apartment buildings, to continue operating under the old rules.

Throughout the short-term rental debate, proponents have argued that the practice benefits the city by encouraging investors to improve properties in disadvantaged neighborhoods and that the council should have the ability to set looser regulations for specific areas. However, the report argues that this approach would be misguided.

“Temporary (short-term rentals) were inherently harmful to the residential fabric of neighborhoods,” according to the report.

That mimics criticisms many opponents have raised about the idea of carving out areas with laxer regulations. Breonne DeDecker, a critic who has called for strict rules to limit all short-term rentals, said easing regulations in some neighborhoods would encourage speculators and drive up property values, ultimately forcing out those who live there now.

“Who do you want to protect more: low-income renters who are being displaced or speculators that are distorting the housing market?” she asked.

The report recommends waiting at least a year to see how the new regulations work before even considering such “economic development zones.”

Representatives of the Alliance for Neighborhood Prosperity, a group of New Orleans short-term rental owners, did not respond to requests for comment on the study.

The report did say the council could consider some targeted exemptions, such as easing the rules for specific, blighted historic buildings the city wants to see restored and allowing more short-term rentals in commercial corridors where the city is trying to encourage the development of entertainment and cultural businesses.

However, the report does not include detailed plans for how those recommendations should be implemented. Instead, it offers a variety of ideas that could be considered by the City Planning Commission and ultimately the City Council.

The planning staff's report now heads to the City Planning Commission, which is scheduled to take it up June 25. That board will be able to make changes in it before sending it on to the council.

The council can do what it wants with the recommendations. If it decides to enact any of them, it would trigger another round of public meetings before both the Planning Commission and the council itself.

Follow Jeff Adelson on Twitter, @jadelson.​