New Orleans City Counsel is currently proposing banning short-term rentals in all residential areas of the city. This move comes after a federal judge placed a restraining order on the city's previous change to short-term rentals. The previous change restricted short-term rentals to one per city block via a lottery system with the possibility of two additional exemptions. There are also rumors that the city counsel is looking to increase fines of violators starting at $10k for first violations.
So what would these changes do to the real estate market here in New Orleans? I believe this will affect the current housing supply in a positive way for buyers. If City Counsel's proposed ban were to go into affect, I think we will see both short and medium term changes. In the short term, the market will see more long term rentals available which will drive down overall rents. In the medium term, depending on how much the increased supply of rentals is able to drive down rents, we might start to see more investors selling their properties.
Overall, the market is always trying to seek an equilibrium of buyers and sellers both being able to freely find their ideal homes and this move would probably bring down record home prices.
What do you think?
