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Tomorrow is Mardi Gras. It's always a hard time of year to find a room in New Orleans. This year it's particularly hard on Airbnb. The city has decided there are just too many Airbnbs. Reporter Tegan Wendland of WWNO in New Orleans partnered with our Planet Money team for this story.
TEGAN WENDLAND, BYLINE: When she was a kid growing up in New Orleans, Charlene Griffith remembers her dad telling her she was going to be a businesswoman.
CHARLENE GRIFFITH: That sounds good - didn't really know what it was. But I'm like, yeah, I'm going to be that business lady.
WENDLAND: After working in hotels as a housekeeper, then a manager, she wanted to go from hotel worker to hotel owner. She poured her savings into buying and rehabbing the old beat-up property next-door to her in the historically black neighborhood of Treme. She put it up on Airbnb.
GRIFFITH: We had the box spring and a mattress. We had...
WENDLAND: And normally Mardi Gras is her busiest time. This year, her big green house on Ursulines Avenue is eerily quiet. The beds are perfectly made, matching sheets waiting for guests, but covered in plastic.
GRIFFITH: Normally it wouldn't have this plastic on it. It would, you know, just be welcoming for guests to come in and take their leisure here.
WENDLAND: The city won't renew her permit. To understand why, you just have to take a short walk from Griffith's house. In some areas it feels like whole blocks have become hotels. Groups of college-age dudes carry coolers and cases of beer into one house. A group of Polish tourists wearing Mardi Gras beads heads out of another.
Most of the houses on this street have a look to them - clean but bland and with those keypad locks on the doors. On the corner, Richard Kendrick grumbles on his front stoop. He's lived here his whole life. He's 83 now.
RICHARD KENDRICK: Everything - everything in this block is B&B - everything.
WENDLAND: He says the whole neighborhood used to be filled with families, mostly black families with children.
KENDRICK: Oh, predominantly - nothing but children around here, but now you don’t see no children around here or nothing.
WENDLAND: City Councilwoman Kristin Gisleson Palmer says she hears from a lot of residents like Richard Kendrick.
KRISTIN GISLESON PALMER: There's become an influx of folks that they don't know. They feel less safe because of the constant turnover. You know, there's heightened trash, noise, those kinds of issues.
WENDLAND: It's gotten contentious. That's partly because the city has flip-flopped on how to regulate Airbnb. Two years ago, the city gave the big go-ahead and formalized rules that invited in lots of investment in short-term rentals.
PALMER: What we started seeing was that out-of-town investors would come in and buy property at a much inflated cost - right? - because they're looking at purchasing a house different than the way a homeowner purchases a house, right?
WENDLAND: One San Francisco-based company owns more than 300 units. They operate like hotels, with managers, cleaning staff. Palmer says that's driving up home prices, making it harder for locals to rent or buy. There's not a lot of research on New Orleans. But one study from New York City found that doubling the number of Airbnbs in an area can increase home values by up to 13 percent.
So City Council voted to change the laws. It's a major about-face, almost a ban. The regulations partially went into effect last fall but could take effect permanently this spring. The new rules create some special commercial districts. Otherwise, they only allow people who actually live in a home to rent it out.
PALMER: Those houses, quite frankly, where somebody lives in there and rents the other side or short-term rentals the other side, we've never heard complaints about that. It's when it becomes a business model for investors that come in and buy the properties for inflated costs.
WENDLAND: Airbnb told us banning whole home rentals will devastate New Orleaneans who depend on short-term rentals and will hurt the local economy. The city's facing a tradeoff, protecting people like Richard Kendrick and his block but also protecting homegrown businesswomen, like Charlene Griffith. Airbnb let Griffith go from hotel worker to hotel owner. And now her rental property next door is caught up in the new rules.
GRIFFITH: I'm trying to - how could you say - still claw my way, claw my way, hold on, hold on, hold on and try to make some funding because I don't want to dismantle this whole house.
WENDLAND: For now she's driving Uber to make ends meet. For NPR News, I'm Tegan Wendland in New Orleans. Transcript provided by NPR, Copyright NPR.