Huge win for short-term rental rights
In a huge win for short-term rental rights, on August 22, 2022, the Fifth Circuit U.S. Court of Appeals in New Orleans held that a city cannot ban non-resident owners from renting out their homes for short terms. See Hignell-Stark v. City of New Orleans, 46 F.4th 317 (5th Cir. 2022).
New Orleans, like the City of Austin, forbids homeowners who do not make a home their "primary residence" from renting out their homes for short terms. Which means that, as in a case I'm handling here in Austin, a homeowner who has their homestead in Houston but a second, vacation home in Austin is forbidden from renting out their Austin home for short terms. Sound unfair?
It is. It violates the U.S. Constitution's prohibition on discriminating against interstate commerce. The effect of the ordinance is to limit STR's exclusively to Austin residents, a clear, plain violation of the Commerce Clause of the U.S. Constitution. So the Fifth Circuit ruled the New Orleans ordinance void. If STR's are allowed (with a license, for instance), the court concluded, a city must allow anyone who owns a home to obtain a license.
This, obviously, spells doom for the City of Austin's STR ban, which expressly denies non-occupying-owners the ability to get an STR license. My clients are now moving forward with injunction requests to prevent the City from enforcing its ordinance against those to whom it has refused to issue licenses.
New Orleans, like the City of Austin, forbids homeowners who do not make a home their "primary residence" from renting out their homes for short terms. Which means that, as in a case I'm handling here in Austin, a homeowner who has their homestead in Houston but a second, vacation home in Austin is forbidden from renting out their Austin home for short terms. Sound unfair?
It is. It violates the U.S. Constitution's prohibition on discriminating against interstate commerce. The effect of the ordinance is to limit STR's exclusively to Austin residents, a clear, plain violation of the Commerce Clause of the U.S. Constitution. So the Fifth Circuit ruled the New Orleans ordinance void. If STR's are allowed (with a license, for instance), the court concluded, a city must allow anyone who owns a home to obtain a license.
This, obviously, spells doom for the City of Austin's STR ban, which expressly denies non-occupying-owners the ability to get an STR license. My clients are now moving forward with injunction requests to prevent the City from enforcing its ordinance against those to whom it has refused to issue licenses.