Carmel snubs Indiana’s new short-term rental law


INDIANAPOLIS — Officials in one of Indiana’s wealthiest cities are thumbing their noses at a new state law aimed at restricting local governments’ power to regulate short-term rental platforms like Airbnb, which which raises the possibility of a legal battle.

Supporters applauded Indiana — now the fourth state, after Florida, Idaho and Arizona — for developing statewide standards for short-term rentals. They said the measure by Bern Rep. Matt Lehman, who is one of the most powerful Republicans in the House, would promote tourism and economic development, as well as generate tax revenue.

But opponents argue this is just the latest example of the Republican majority in the Indiana Legislature – a party that often touts the virtue of local control – backing legislation that would tie the hands of city and county governments. .

Step into upscale Indianapolis suburb Carmel, which approved new short-term rental regulations on Jan. 8 — just days after a statutory deadline for municipalities to grandfather their ordinances. .

“We are exempt from state law,” Carmel Republican Mayor Jim Brainard said.

He argues that the city’s short-term rental regulations, which are stricter than the new law allows, weren’t put in place through a new ordinance, but rather as an update. update of an existing ordinance that has been in effect for approximately 30 years.

It’s exactly the type of scenario that Lehman, who could not be reached for comment, had previously said he wanted to avoid. It also surprised a number of lawmakers, including Republican Carmel Rep. Jerry Torr, who opposed the bill.

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“I don’t think the new ordinance that Carmel passed on January 8 is protected,” Torr said.

Online home rental services such as Airbnb are seen by some as an innovative way to earn extra cash, but neighbors aren’t always enthusiastic. As the emerging market has grown, local restrictions in cities across the United States have increased, including New Orleans, Chicago, New York, Nashville, and several locations in Indiana.

Carmel has sought to ban landlords from renting second homes that are not their primary residence. This will be prohibited under the new law, although municipalities are allowed to pass restrictions, such as requiring a rental permit or passing noise and nuisance ordinances.

Homeowners associations are also allowed to restrict short-term rentals.

“The legislature doesn’t trust the people who elected them,” Brainard said. “They took charge of all the decision-making.”

Opponents say it continues a trend.

Two years ago, as city officials in Bloomington debated a ban on plastic shopping bags, the legislature passed a bill prohibiting local governments from instituting such a ban. Property tax caps, which have been put in place in recent years, also have a similar effect, removing a source of local revenue often relied upon for funding schools.

Even Indiana’s 2015 Religious Objections Act, which was amended after sparking a firestorm of national criticism, was initially intended to circumvent local governments such as Indianapolis that had passed anti-discrimination ordinances protecting gay people.

Lehman argued during the legislative session that the measure was an effort to strike a balance between protecting property rights and preserving local governments’ ability to self-regulate.

“We authorized the updating of existing orders,” said Republican Senator Mark Messmer, who led the bill in the Senate. “Whether Carmel meets that definition or not, I couldn’t say for sure.”

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Torr said Carmel’s argument that he’s exempt is a legal question he’s not sure anyone can answer “until a court makes a decision.”

Indiana is one of Airbnb’s fastest growing destinations. The company said Indiana hosts last year made a combined total of nearly $21 million, or about $4,700 in annual revenue for the typical host.

Indianapolis, South Bend, Bloomington, Michigan City and Fort Wayne saw the most Airbnb stays while Carmel hosted about 1,570 guest arrivals with total revenue of $270,000.

For several years, however, Carmel officials attempted to curb its prevalence.

John Molitor, an attorney who has advised Carmel on zoning issues, believes the city’s new bylaws follow the letter of the law, if not Lehman’s intent.

“People may have different opinions on how legislation should be read,” he said. “We didn’t really challenge the legislation during the session because we viewed it as allowing us to do what we were doing.”

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