Legislation limiting regulation of short-term rentals by local governments was approved Tuesday by Indiana lawmakers and is on its way to Gov. Eric Holcomb’s desk.
The bill’s passage likely marks the bookend of a yearlong debate over balancing property owners’ rights and neighbors’ concerns as businesses such as Airbnb continue to grow in the state.
“This legislation reflects the perfect balance of individual property rights and government oversight,” said the bill’s sponsor, Republican Rep. Matt Lehman. “I look forward to the governor signing this bill into law and making a national statement that Indiana is open for business.”
The measure would guarantee homeowners the ability to rent out their primary residence on online platforms such as Airbnb, HomeAway and VRBO. In those instances, the authority of cities and counties would be sharply curtailed.
For example, the Indianapolis suburb of Carmel, which has some of the state’s highest average incomes, adopted strict rules this year limiting the ability of residents to list their primary homes on short-term rental websites and completely banned renting out secondary homes.
The measure was intended to discourage homeowners from using the service, with supporters of such rules arguing that short-term rentals could cause safety concerns, noises and other violations.
Under the bill, the city would be prohibited from enforcing much of the ordinance. But Carmel could still regulate secondary properties, including setting restrictive zoning standards and requiring a city permit.
However, other cities — unlike Carmel — which passed ordinances regulating short-term rentals before the end of 2017 would be grandfathered in and permitted to continue enforcement.
The bill is significantly scaled back from last year’s proposal that would have dramatically cut down regulations on short-term rentals. That effort fell one vote short of passage in the House.
This year, Lehman compromised, and the House voted 73-19 Tuesday pass the measure.
If Holcomb signs the bill, Indiana will become the fourth state — following Florida, Idaho and Arizona — to protect short-term rentals under state law, said The Travel Technology Association, a Virginia-based advocacy group.
“Indianapolis is Airbnb’s top trending U.S. city,” said Laura Spanjian, Airbnb Midwest policy director, in a statement. She added that their presence has boosted tourism industry in South Bend, Bloomington, Fort Wayne and Evansville.
It is uncertain that whether the governor will sign the bill into law.
“This bill is not a part of the governor’s legislative agenda,” said Stephanie Wilson, spokeswoman for Holcomb. “He will review all bills that arrive on his desk carefully before making a decision.”