The regulatory landscape for short-term rentals (STRs) in Orleans Parish shifted again this month, as a federal judge upheld nearly all of the City’s restrictive STR ordinances and Airbnb promptly announced that it will appeal the ruling to the U.S. Fifth Circuit Court of Appeals. This development represents the latest phase in ongoing litigation between STR operators, hosting platforms, and the City of New Orleans.

Background of STR Regulations

Since 2019, the City Council has adopted multiple ordinances aimed at curbing the expansion of STRs in residential neighborhoods. Early residency-based requirements were invalidated by the U.S. Fifth Circuit Court of Appeals in Hignell-Stark v. City of New Orleans (2022).¹ In response, the Council enacted new measures in 2023, including a one-per-square-block limit with permits distributed via lottery.² In 2024, Ordinance No. 34,806 added platform-level enforcement, requiring companies like Airbnb and Vrbo to verify permits electronically before allowing listings to post and to submit monthly compliance reports.³

Residential vs. Commercial STRs: How the Rules Differ

A critical distinction in New Orleans’ current framework is the difference between Residential (Non-Commercial) STRs and Commercial STRs, and the different density controls that apply to each.

Residential STRs – One per Square Block

In residentially zoned districts (e.g., S-RS, S-RD, S-LRS, HMR-1, HU-RD2), only the Residential or Non-Commercial STR license type is available. Under CZO § 20.3.LLL.1(f)–(g) and City Code § 26-617(g), there may be no more than one Non-Commercial/Residential STR per square block, and when multiple applicants compete, the City conducts a lottery on a per-square basis.⁴ This cap is tied to owner-occupancy and is designed to prevent the displacement of long-term housing stock.

Commercial STRs – Per-Building Cap

In contrast, Commercial STRs in commercial and mixed-use zoning districts (e.g., HU-B1A, MU-1, CBD subdistricts) are governed by a different density standard. CZO § 20.3.LLL.2(e) limits Commercial STRs to “no more than one (1) unit or twenty-five (25) percent of total units on a lot or a single building constructed across lot lines, whichever is greater,” with specific carve-outs for certain subdistricts (VCE, Canal Street frontage, EC/MC/LS/MI-Maritime).⁵ Thus, the one-per-square-block cap does not apply to Commercial STRs; instead, they are subject to this per-building unit percentage limit.

Absolute Prohibitions

Certain districts remain off limits entirely. CZO § 20.3.LLL.1(i) prohibits any STR or Bed & Breakfast use within the boundaries of the Garden District, and longstanding Vieux Carré restrictions effectively bar most STR activity in the French Quarter except in specified VCE subdistricts.⁶

Practically speaking, this means readers should not focus solely on “what neighborhood am I in,” but instead on “what is my property’s zoning designation” and “which STR license type applies.” The zoning designation dictates whether a property is eligible for a Residential STR (and thus subject to the one-per-square-block rule) or a Commercial STR (and thus subject to the per-building unit percentage cap), or prohibited entirely.

The February 2025 Lawsuit

In February 2025, Airbnb and several property owners filed suit in the U.S. District Court for the Eastern District of Louisiana, challenging these measures as unconstitutional. Plaintiffs asserted that:

• the one-per-block restriction unlawfully deprived owners of property rights;
• delegating enforcement to platforms was an impermissible governmental delegation; and
• the mandatory reporting obligations constituted a warrantless search in violation of the Fourth Amendment. ⁷

Judge Zainey’s Ruling

On September 8, 2025, Judge Jay C. Zainey issued a decision largely in favor of the City.⁸ The Court:

• Upheld the City’s authority to limit STR density, regulate permits, and impose platform verification duties;
• Dismissed property rights challenges, finding no unconstitutional deprivation; and
• Rejected due process claims, concluding the rules were rationally related to legitimate governmental objectives of protecting neighborhoods and preserving housing.

The sole exception was a narrow Fourth Amendment holding in favor of Airbnb: the Court found that provisions requiring detailed reporting of revenue, booking reconciliation, and transaction-level data amounted to an unreasonable warrantless search. That portion of the ordinance will require revision. ⁸

Airbnb’s Appeal to the Fifth Circuit

Following Judge Zainey’s ruling, Airbnb announced that it will appeal the decision to the U.S. Fifth Circuit Court of Appeals. ⁹ In a public statement, the company reiterated its disagreement with the City’s one-per-block restriction, platform verification mandates, and reporting requirements.

The appeal will place New Orleans’ regulatory framework squarely before a federal appellate court that has already shaped STR law nationwide through its Hignell-Stark ruling in 2022. Legal observers expect the Fifth Circuit’s decision to address not only property-rights and takings arguments but also Dormant Commerce Clause and Fourth Amendment issues with potential nationwide implications.

Immediate Implications

Pending appeal, the City retains full authority to enforce its current STR regime, including the one-per-square-block limit for Residential STRs, the per-building cap for Commercial STRs, and the platform verification and reporting requirements (minus the narrow Fourth Amendment carve-out). Airbnb and other platforms have already de-listed thousands of unlicensed rentals, reducing available inventory substantially. With civil fines of up to $1,000 per day for noncompliance, operators face heightened risks.

Although the ultimate outcome will turn on the Fifth Circuit’s review, Judge Zainey’s ruling, which is now on appeal, confirms that the City possesses broad police powers to regulate STRs in the interest of neighborhood stability and housing preservation.

Conclusion

The decision is a decisive victory for municipal regulators and neighborhood advocates, reinforcing the City Council’s regulatory authority after years of litigation. While the Fourth Amendment carve-out leaves some reporting provisions vulnerable, the broader framework – including density limits, permitting requirements, and platform verification obligations – remains intact and enforceable during the appeal. STR operators and market participants should carefully review compliance obligations under the City Code and monitor the appeal proceedings before the Fifth Circuit.

Footnotes

1. Hignell-Stark v. City of New Orleans, 46 F.4th 317 (5th Cir. 2022).
2. Comprehensive Zoning Ordinance (“CZO”), as amended by Council Ord. 33,678 (2023).
3. New Orleans City Council, Ord. 34,806 (Oct. 10, 2024), effective Mar. 1, 2025. 
4. City Code § 26-617(g) (lottery “per-square” basis for Residential STRs); CZO § 20.3.LLL.1(f)–(g).
5. CZO § 20.3.LLL.2(e) (Commercial STR density: one unit or 25% of total units on a lot or building, whichever greater; carve-outs for VCE, Canal Street, EC/MC/LS/MI subdistricts).
6. CZO § 20.3.LLL.1(i) (Garden District prohibition); CZO VCC/VCE provisions (French Quarter limitations).
7. Complaint, Airbnb, Inc. et al. v. City of New Orleans, Civ. Action No. 2:25-cv-00542 (E.D. La. Feb. 2025).
8. Order & Reasons, Airbnb, Inc. et al. v. City of New Orleans, Civ. Action No. 2:25-cv-00542 (E.D. La. Sept. 8, 2025) (Zainey, J.).
9. “Airbnb to appeal New Orleans short-term rentals court ruling,” NOLA.com (Sept. 13, 2025).