Senate passes bill to protect Airbnb rentals
The Indiana Senate voted 27-20 on Thursday to approve a bill that would prevent local governments from banning Airbnb and similar short-term rental services.
The legislation has been an issue in Carmel, which informed homeowners in January that city zoning prevented them from listing their homes on online rental sites. Carmel appears to be the only community in Central Indiana that has restricted such rentals, though Fishers has formed a committee to study the issue.
Rep. Matt Lehman, R-Berne, filed House Bill 1133, which also would limit owners from renting their rooms for 30 consecutive days or more than 180 days per year. An influential member of the Republican caucus, he ushered through similar legislation in 2015 for ride-hailing services such as Uber and Lyft.
The House voted 53-40 in February to approve the legislation. Sen. Randy Head, R-Logansport, who sponsored the bill in the Senate, said the bill would go to a House-Senate conference committee to hammer out a final version.
The Senate made one major change to the legislation. The House had voted to require homeowners to retain insurance coverage of $1 million per incident for third-party claims. The Senate softened that language to remove the amount per incident.
The bigger issue, though, might be legal definitions within the bill. Lawmakers were working this week to ensure the procedural language of the bill is sound.
While the bill passed, some senators argued lawmakers should allow local governments more control of zoning.
Sen. Karen Tallian, D-Portage, who voted against the legislation, said residents should be able to rely on zoning laws that separate residential from hotel uses. She unsuccessfully tried to change the bill to allow local governments to enact a permitting process.
"The point of zoning laws is that we use them to rely on property values," she said. "You know that when you buy a house in a (residential) zone that it's going to be for a residential use."
Head, though, said the legislation would prevent local governments from stamping out homeowners' rights.
"This bill gives homeowners more freedom to profit from their investments," he said.
More changes could be coming down the pike, though. Fiscal Policy Chairman Brandt Hershman, R-Buck Creek, said the legislature may consider whether to apply the state hotel tax to short-term rentals in future sessions.
Carmel has continued to oppose the legislation. Mayor Jim Brainard directed city officials to mail letters in January to area homeowners active on Airbnb, warning they were in violation of city zoning laws and had 10 days to cease operations.
He said adjacent property owners are worried their property values and quality of life would be damaged by problems such as noise, speeding and increased traffic caused by a high turnover of short-term renters who don't care about the community. Hotels, he said, face stricter zoning regulations than homeowners and are worried they are losing business in an unlevel playing field.
There's little evidence Hamilton County hotels have been affected by short-term rentals. Whitney Riggs, spokeswoman for Visit Hamilton County, told IndyStar in January that a side-by-side analysis using Airbnb data showed no appreciable effect on local hotel occupancy.
Groups such as the Indiana Restaurant & Lodging Association and the Indiana Association of Cities and Towns, now called Accelerate Indiana Municipalities, have opposed the bill. They think local governments should maintain control of zoning decisions.
Airbnb has been supporting the legislation.
Laura Spanjian, Airbnb Midwest policy director, issued a statement within minutes of the bill's passage that stated: "This represents a big step forward and a victory for the 2,700 Hoosiers who help infuse economic growth across the state by responsibly sharing their homes. We look forward to further facilitating collaborative partnerships between our Indiana host community and local policymakers."
Call IndyStar reporter Chris Sikich at (317) 444-6036. Follow him on Twitter: @ChrisSikich and at facebook/chris.sikich.
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