Fifth Circuit Denies Rehearing in New Orleans Airbnb Short-Term Rental Case

Fifth Circuit Declines to Rehear New Orleans Short-Term Rental Challenge

The legal battle over New Orleans’ short-term rental market remains locked in place. In an order filed on October 30, 2026, the United States Court of Appeals for the Fifth Circuit denied a petition for rehearing en banc in Bodin v. New Orleans, case number 25-30-524, leaving intact a regulatory framework that has sharply restricted platforms like Airbnb across city neighborhoods. The decision follows an original panel opinion issued on August 5, 2026, and seals the court’s refusal to reconsider the rules.

Can New Orleans harshly limit short term rentals like AirBNB? Fifth Circuit said yes. And then it declined to go to full court review by *one* vote. The vote was 8-9 against. If Judge Southwick 's successor is more like fellow Mississippian Judge Wilson, the outcome would change pic.twitter.com/6he0tEmtYR

— https://x.com/EWess92/status/2116333530946969711

The refusal to grant a full court rehearing came down to a narrow 9-to-8 split among the active judges. Eight members of the court voted in favor of taking up the case en banc, led by Chief Judge Elrod alongside Judges Jones, Smith, Willett, Ho, Duncan, Engelhardt, and Oldham. However, the nine judges voting against the poll—Stewarts, Richman, Southwick, Haynes, Graves, Higginson, Wilson, Douglas, and Ramirez—outvoted them, keeping the panel’s earlier decision firmly in place.

Two Ordinances at the Heart of the Dispute

The first is a 2023 ordinance restricting short-term rental licenses to a single property per residential block, with available slots distributed via a lottery system. In the historic French Quarter, the restrictions run even tighter: if an established bed and breakfast operates on a given block, the City refuses to issue any additional short-term rental licenses there.

The second measure, passed in 2024, targets the digital marketplaces themselves. It bans platforms like Airbnb from processing transactions for unlicensed rentals, requiring them to verify a property’s active license status before accepting payments. Furthermore, the rule mandates that platforms reverify this status every thirty days, or whenever they know or should know that the underlying verification data has shifted.

Weighing the Clash Over Neighborhood Character

The regulatory clash represents the latest chapter in a multi-year conflict between property owners and municipal leaders attempting to preserve residential cohesion. Prior to the rise of online booking platforms, New Orleans strictly banned property owners in residential zones from renting homes for less than thirty days. When the city partially lifted that total ban in 2017 to launch a licensing regime, the influx of transient visitors surged.

Studies cited in earlier appellate opinions pointed to severe quality-of-life degradation for permanent residents, including excessive noise, trash accumulation, and disruptive parties, alongside a shrinking supply of long-term affordable housing. Property owners and rental platforms fought back in federal court, achieving targeted victories against prior iterations of the law—such as a successful Commerce Clause challenge against an owner-occupancy mandate in 2019, and an Equal Protection victory against rules barring corporate ownership.

Yet, with the Fifth Circuit’s denial of rehearing in October 2026, the city’s latest round of block-by-block caps and platform liability requirements survives, leaving hosts and booking giants with dwindling judicial avenues to dismantle the local licensing regime.