One Woman Against AirBnb is a Hollow Victory in New Orleans

New Orleans   I wanted to share what I hoped was a simple story of one woman’s persistence prevailing over a giant, rogue company and the ineffectual enforcement by a city of its regulations governing the company.

That story had as its activist, community hero a woman named Ada Phleger, a young attorney in the Federal Public Defender’s office in New Orleans.  Phleger had lived in the St. Claude neighborhood, where Fair Grinds Coffeehouse second location sits on the border.  She had lived in the area for eight years and moved into her current house recently.  When she moved there recently there were two whole-home short-term rentals on the block.  Then there were three.  She drew a line to fight when the fourth emerged, so began to try to beat the permit before there were guests.

The company is both on AirBnb and managed by Boston outfit, called Heirloom or Stayloom, owned by Frank and Dan Glaser, for some owners and on its own account.  They claim 100 properties in New Orleans, Boston, and New York according to research by The Lens, the local on-line news service.  Sixty-seven of the properties are in New Orleans.  The Lens, following up on Phleger’s fight, found the addresses on 34 with 19 having either no permits or expired permits.

Phleger’s fight was Biblical.  She kept reporting them to the city for violations and then having to get videos when photos of guests were not enough, the months drug on, and guests piled in with no enforcement action.  Finally, in frustration she used her mother’s AirBnb account and hosted a dinner party there for a family birthday party to prove it was being rented and to photograph the inside, establishing that no owner lived there.  Finally, the city canceled their permit since none of the requirements were being met.  There were stories in the local papers and on television one woman’s victory over corporate and governmental ineptness.  She was interviewed by NPR.

All good, but…

Reading more deeply in the stories and the Lens reporting, there’s no question that Phleger was a freedom fighter here.  That piece of the puzzle remains in place.   Some of the other pieces though don’t fit as well.

The city was not as inept and unresponsive as it seemed.  The initial regulations appear to have been Swiss cheese with as many gaping holes and, even worse, they were written so vaguely that the information AirBnb and other operators were supposed to provide was opaque and didn’t allow real enforcement.

AirBnb had touted the deal with the former administration of Mayor Mitch Landrieu as a pacesetter in the industry, attempting to establish that they could work with a city and play by the rules.  They did eliminate 3000 listings, but after that it seems they drove a truck through the holes in the regulations, which also allowed outfits like Stayloom doing mass-rentals to exploit the language as well.  All of which made the city look like chumps, re-enforcing the conservative narrative of ineffectual local government, when a closer look tells the old story about the devil being in the details, regardless of the headlines.

The local councilwoman claims that regulations close some of the loopholes.  Now, the question might be whether or not New Orleans – or any city really – can keep up with a floating crap game, supported by visiting consumers and some homeowners trying to make their own mortgages, and exploited by rapacious companies with money to gain and little to lose.

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Regulating Payday Lenders Out of Our Neighborhoods Like Porn Shops and Liquor Stores

52668645Houston       Payday lenders are by definition predatory no matter how they try to spin the story. Driving in torrential, blinding rains yesterday from Dallas to Houston, I listened to an ad from ACE Cash Express offering “free” loans of up to $1500 for 30-days supposedly without any interest or fees. ACE Cash Express just settled for $10 million with the Consumer Finance Protection Bureau for illegal collection practices, which makes it all clearer now. They don’t mind lending, because they know people will have trouble paying, and they browbeat the collection process to make their money of late fees, extra charges, interest past the due date, and any number of other scams.

As payday lending continues to rush into low and moderate income communities to fill the huge gap for small loans since banks have totally retreated from the field in most countries, despite their charter obligations to serve all of the public, their storefronts have become even more ubiquitous than overgrown vacant lots in most of our communities. Interestingly, communities in British Columbia may have found a way to curb some of these companies by managing the zoning and licensing process for payday lenders the same way they do for other public nuisance businesses like the way porn shops and liquor stores are handled in the USA.

Few working families can afford to live in Vancouver anymore, so there’s significant growth in low-and-moderate income, working families’ suburbs like Surrey, Burnaby, and others within commuting distance. Surrey first stumbled into a city bylaw or ordinance that would force any new payday lender to have to open up at a considerable distance from others and from schools as well, as if they were drug pushers, which is a pretty good comparable.

ACORN Canada’s local group in Burnaby is close to moving these payday lending restrictions using fines and zoning some giant steps forward. They have already convinced the Council that the issue has to be seem as a priority. Now after actions and meetings with planners, they have convinced the city to consider a range of alternatives including moratoriums on the issuance of licenses, a bylaw restricting the proximity between each outlet, substantially raising business license costs as well as giving city council discretionary power for approval over each payday lender license application. ACORN leaders have been imaginative, even suggesting that increased licensing fees go to a ‘renter’s bank’ for people who need emergency rent relief, which has also attracted interest. Another BC suburb, Esquimalt, has created a separate definition for ‘money lenders’ that exclude financial services such as credit unions, meaning credit unions would not be affected if they provide small, short term loans to clients, and Burnaby would have to also narrow its definitions.

None of this is a done deal, but there’s a lot of interest and encouragement from folks in and outside of City Hall so the prospects of huge breakthroughs look very, very likely, and perhaps even very soon. Regardless of the “when,” the “if” seems certain now that ACORN has increasingly ramped up its localized attack on payday lending in our communities and is gaining traction in a building consensus that views these rip-off artists as essentially the same as other peddlers who make their money off predatory practices and peoples’ weaknesses. Putting a triple XXX on payday lending locations in our neighborhoods makes sense. The only real difference between the porn palaces and the liquor stores may be that the payday lending folks steal even more money than those outfits from lower income families every time they walk through the door.

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Please enjoy Arctic Monkeys’ new single, Why’d you Only Call Me When Your High? from Kabf.

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