A new ruling out of the Fifth Circuit is likely to have significant impacts on the ways that municipalities may regulate short term rental properties (“STR’s”). In Hignell-Stark v. City of New Orleans, 46 F.4th 317 (5th Cir. 2022), the court reviewed a New Orleans ordinance which limited the right to use a residence as an STR to only people whose primary residence was in New Orleans.

In its holding, the court made two noteworthy determinations. First, it ruled that the City of New Orleans’s regulation of STR’s was not a “Taking”, and therefore New Orleans was not required to provide compensation to people who alleged their property value was decreased by the ordinance. Second, the court determined that the ordinance violated the Commerce Clause because it discriminated against people who were not residents of the state of Louisiana.
Continue Reading A New Federal Ruling Outlines Limits to Short Term Rental Regulation