NEW ORLEANS – The co-owners of a residential property in New Orleans have filed a lawsuit against the city and its Department of Safety and Permits, pointing to their “pattern and practice of arbitrary and unlawful” denial of short-term rental permits.
Plaintiffs Mark G. Montiel Jr. and Rachel Michelle Jones Montiel filed their lawsuit in U.S. District Court for the Eastern District of Louisiana.
The named defendants include the City of New Orleans, the Department of Safety and Permits, and Celeste Parks, the department’s director.
The safety department is charged with the administration and enforcement of building codes, zoning regulations, and permitting requirements, including short-term rental permits.
“Defendants’ repeated denials of Plaintiffs’ STR applications do not cite a violation of any local city ordinances, nor do they cite any legitimate goals promoting the general welfare,” the 19-page complaint states. “In fact, Plaintiffs are in strict compliance with all city ordinances and even after repeated denials, have not been afforded any explanation for this regulatory overreach.
“The repeated government action depriving Plaintiffs of their right to enjoy the economic value of their private property is a taking unfounded by any legitimate governmental purpose.”
Mark Montiel, who is an attorney at Montiel Hodge LLC in New Orleans, claims the city has “effectively damaged” the property and deprived him of its “economically viable use” without just compensation.
Such conduct, the plaintiffs contend, amounts to a regulatory taking and/or damaging of property.
According to their filing, the plaintiffs have owned and operated a fully compliant short-term rental, or STR, in Orleans Parish since 2017.
They claim they have submitted complete STR applications that satisfied all published requirements including zoning, tax registration, safety compliance, and documentation.
With these applications, they also paid all required fees.
The plaintiffs contend they have filed both STR operator and non-commercial STR applications for their property more than six times over the past three years.
All of their applications were denied for vague reasons such as “application incomplete,” “application does not meet requirements,” and “deficient application,” they claim.
“The denial process lacked consistency or objective standards,” the lawsuit states.
When the plaintiffs tried to appeal the ruling, they claim they were told that no appeal process exists.
“Plaintiffs were not provided with clear standards, consistent rules, or any meaningful appeal review,” the filing states.
As a result, they argue they have suffered lost rental income, diminished property value, and ongoing financial loss.
“Plaintiffs' private interest in the continued lawful use and income-producing potential of their own property is substantial,” the complaint states. “The risk of erroneous deprivation is high, and additional safeguards would carry significant value, because Defendants have applied undisclosed and shifting criteria without providing Plaintiffs any statement of reasons capable of being tested or appealed.
“Defendants' interest in avoiding a meaningful appeal mechanism is minimal, as such a process would impose little additional administrative burden.”
The plaintiffs argue they have been stripped of all economic value in their home, and they are deprived of the ability to conduct short term rentals of their choice on their private property.
They seek mandamus-type relief compelling the administration and issuance of short-term rental permits; preliminary and permanent injunctive relief prohibiting arbitrary and capricious denials, damages sustained including lost rental income and attorney fees.
Mark G. Montiel Jr. and Dominic J. Carmello of Montiel Hodge LLC are representing the plaintiffs in the case.
