INDIANAPOLIS (AP) -
Officials in one of Indiana's wealthiest cities are thumbing their noses at
a new state law intended to curtail local governments' authority to regulate
short-term rental platforms like Airbnb, raising the possibility of a court
applauded Indiana - now the fourth state, following Florida, Idaho and
Arizona - for developing statewide standards for short-term rentals. They
said the measure by Berne 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
it's just the latest example of the Indiana Legislature's Republican
majority - a party that often extols the virtue of local control -
supporting legislation that would tie the hands of city and county
Enter the upscale
Indianapolis suburb of Carmel, which approved new short-term rental
regulations on Jan. 8 - just days after a cutoff deadline set in the law for
municipalities that want to have their ordinances grandfathered in.
"We are exempt from
the state legislation," said Republican Carmel Mayor Jim Brainard.
He argues the
city's short-term rental regulations, which are stricter than the new law
allows, were not put in place through a new ordinance, but rather as an
update to an existing ordinance that has been on the books for about 30
That's the exact
type of scenario that Lehman, who could not be reached for comment,
previously said he wanted to avoid. It also surprised a number of lawmakers,
including Republican Carmel Rep. Jerry Torr, who opposed the bill.
"I don't think the
new ordinance that Carmel passed on Jan. 8 is grandfathered," Torr said.
services such as Airbnb are considered by some to be an innovative way to
make extra cash, but neighbors aren't always enthused. As the emerging
market has grown, so have local restrictions in cities across the U.S.,
including New Orleans, Chicago, New York, Nashville, and several places in
Carmel has sought
to ban homeowners from renting out secondary homes that are not their
primary residence. That will be prohibited under the new law, though
municipalities are allowed to pass restrictions, such as requiring a permit
to rent, or adopting noise and nuisance ordinances.
associations are also allowed to restrict short-term rentals.
doesn't trust the people who elected them," Brainard said. "They have taken
over all the decision-making."
Opponents say it
continues a trend.
Two year 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 were implemented in recent years, also
have a similar effect, taking away a source of local revenue often counted
on for school funding.
Even Indiana's 2015
religious objections law, which was changed after it ignited a firestorm of
national criticism, was initially intended to circumvent local governments
such as Indianapolis that had adopted anti-discrimination ordinances
protecting gay people.
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 did allow for
updating existing ordinances," said Republican Sen. Mark Messmer, who
shepherded the bill through the Senate. "Whether Carmel meets that
definition or not, I couldn't say for sure."
Torr said Carmel's
argument that it is exempt is a legal question that he's not sure anyone can
answer "until a court makes a determination."
Indiana is one of
Airbnb's fastest growing destinations. The company said Indiana hosts last
year made a combined total of nearly $21 million, which was about $4,700 in
annual income for the typical host.
Bend, Bloomington, Michigan City and Fort Wayne have seen the greatest
number of Airbnb stays while Carmel hosted about 1,570 guest arrivals with
an income total of $270,000.
For several years,
however, Carmel officials have tried to rein in its prevalence.
John Molitor, an
attorney who advised Carmel on the zoning matters, believes the city's new
regulations follow the letter of the law, if not Lehman's intent.
"People can have
different opinion about how legislation should be read," he said. "We didn't
actually take issue with the legislation during the session because we
looked at it as if it allowed us to do what we have been doing."