Where Have All The Short-Term Tenants Gone?!

0[Alvin Brickman for Metrosetter Wire]

The city of New Orleans has experienced a deluge of short-term rentals on the market in anticipation of those who will be in attendance at this year’s Super Bowl. Short-term rentals are illegal in New Orleans, but many have nonetheless decided to cash-in on their purportedly high demand, placing their properties on online classifieds. A simple search on Airbnb, for instance, yields 188 results in New Orleans ranging from $300 to $5000, many of them newly listed, for the weekend of the most-watched game in the country. Unfortunately, the demand isn’t as high as expected — or is it?

According to the article below, local hotels and bed & breakfasts are sold out, yet short-term rentals languish on the market with no activity. Are travelers wary of being scammed, or are renters simply pricing their properties too high? Have they gone the way of the cowboys? Where have all the short-term tenants gone?! Again, read more about it below.

Richard A. Webster, “Short-term rental demand disappoints for Super Bowl 2013“:

The New Orleans “vacation rental” section on Craigslist is turning into a graveyard for the get-rich-quick dreams of people looking to rent their apartments for the Super Bowl 2013. The online classifieds website is littered with listings offering apartments, houses and condominiums for as much as $4,000 per night.

But to the surprise of many, there have been relatively few takers.

Aaron Whitney owns a six-bedroom house in Bay St. Louis with four bathrooms, an outdoor kitchen, and 1,200 square feet of porch space that is just 800 feet from the beach. He had a contract with an ESPN crew for $4,500 a day but it fell through and since then he hasn’t received any serious offers.

“We had a house in New Orleans for the Super Bowl in 2002 and we rented it for five days for $20,000,” Whitney said. “It may not happen for us this year.”

A homeowner in old Gretna, who asked to remain anonymous because short-term rentals can run afoul of local ordinances, decided to advertise his four-bedroom house on Craigslist after seeing media reports about people renting their homes for thousands of dollars. He received several phone calls early in the playoffs but hasn’t had an inquiry in a week, he said.

He still holds out hope that as game day draws closer people will get more desperate and willing to pay the $1,000 per night rate he is asking but he understands it’s not something everybody can afford.

“It’s all a matter of means. If you have several million dollars, spending $10,000 for a weekend is something you can accept,” he said. “If you are a more usual person and make less than six figures a year it would make more sense to get a $50 hotel room in Lake Charles and drive in from there.”

Short-term rentals didn’t pay off last year either when Indianapolis hosted the Super Bowl, said John Livengood, president and CEO of the Indiana Restaurant and Lodging Association.

“My business partner tried to rent out some properties and didn’t get any takers,” he said. “It happened more with the high-end homes where you had a celebrity who wanted a really nice place to rent for a week, but there wasn’t a lot of that.”

The majority of homeowners interviewed for this story asked to remain anonymous because it is illegal to rent a property in New Orleans for less than 30 days, or 60 days in the French Quarter. Any person who violates the law receives a written warning demanding any advertisements for the property be taken down; a second violation results in a $500 fine and a third offense brings a $500 fine and 30 days in jail.

The city looks into properties offering illegal short-term rentals based on complaints but given the limited resources it is difficult to crack down on everybody, said Ryan Berni, spokesman for Mayor Mitch Landrieu.

Bonnie Rabe, president of the Professional Innkeepers Association of New Orleans and owner of the Grand Victorian Bed and Breakfast on St. Charles Avenue, said she is disappointed in the city’s response. If it created a special category for short-term rentals where they could be licensed and taxed it could eliminate the need for people to operate outside the law and the city could use the revenue to bring the unlicensed businesses into compliance.

Rabe’s focus, however, is not on the people who try to rent their homes once a year for big events; it’s on the people doing it every day, she said.

There are approximately 200 licensed bed and breakfast rooms in the city and more than 400 unlicensed rooms. Some of these are businesses operating as bed and breakfasts but for some reason were unable to secure a city license while the others are homeowners who visit New Orleans for a few weekends out of the year and rent their house the remainder of the time.

“They’re not inspected by the fire marshal or pay taxes,” Rabe said. “That’s what really bothers us, these unprotected, uninspected places where if one would have a problem it would reflect bad on our whole industry. In the French Quarter there is a humongous amount of condos that people illegally rent out.”

Mia Matassa said she was working at her family’s store, Matassa’s Market on Dauphine Street, when she saw 10 girls walk into the apartment across the street.

“No one lives there,” said Matassa, a board member with Vieux Carre Property Owners, Residents and Associates. “It’s not occupied except on the weekends and this goes on all the time.”

There are three buildings in the 900 and 1000 blocks of Dauphine Street operating exclusively as year-round short-term rentals and it hurts their business, Matassa said.

“The neighborhood is no longer a neighborhood. It’s a dead area except on the weekends because no one lives there. If someone did we would get their business seven days a week.”

The people offering short-term rentals for the Super Bowl said they understand the concerns of people like Rabe and Matassa but don’t struggle with the concept that what they are doing is illegal.

“Everyone here is more than justified in making as much money as they can from the kind of onslaught the public faces due to the Super Bowl,” said the homeowner in old Gretna. “It’s taken over the city. It’s impossible to get anywhere. So that’s what I would say to anyone who thinks it’s gouging. It’s New Orleans (residents) getting something back.”

But with less than a week to go before the game, “getting something back” is proving to be a challenge.

The city expects a complete sell out of its 3,900 hotel and bed and breakfast rooms so most people offering short-term rentals thought demand would be through the roof. Price also wasn’t expected to be an issue given the exorbitant rates some hotels are charging.

David Teich, general manager of the Windsor Court Hotel, confirmed rumors that some downtown hotels are asking for as much as $4,000 per night.

“That’s gouging and it does upset me,” he said. “We are in it for long-term customers. It’s not worth it to make $2,000 in one night. It’s not worth a few extra grand to make someone feel like they’re getting ripped off and lose a customer for the rest of their life. It’s just ludicrous.”

Despite the absence of available and affordable hotel rooms, short-term rentals continue to languish without significant interest from visiting football fans. One homeowner who has unsuccessfully tried to rent out two properties in the French Quarter said the media coverage convinced everyone in New Orleans they could make some fast cash and that has saturated the market and driven down prices. She dropped the price of her house to $900 a night from $1,200 and still hasn’t had any luck.

“I have a friend with four properties asking $500 a night and they’re not getting any takers,” she said. “I’ve been doing (short-term) rentals in the French Quarter for five years and I’ve never seen anything like this. I figured that my places would be rented by Monday. There’s no cab or trolley or I-10 to sit on, they are in heart of the French Quarter. You just roll out the door. It blows my mind.”

She also blames the con artists for souring people on the idea of renting unlicensed apartments. They offer a house for a reasonable price, requesting half the money up front including a security deposit, and by the time people realize it’s a scam it’s too late.

During Mardi Gras last year, the French Quarter homeowner said she sat on her stoop and watched as tourists walked up and down St. Peter Street with their suitcases, confused, looking for an address that didn’t exist.

“The scam artists keep them on the phone until the day they arrive to convince them it’s real and once they get here they stop answering the phone. It was pretty sad watching these people. I can only imagine what will happen during the Super Bowl.”


One thought on “Where Have All The Short-Term Tenants Gone?!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s