Bill would allow property owners to lease rooms, homes

Under a bill proposed Tuesday, cities and towns in Indiana wouldn't be permitted to ban short-term rentals that are found on websites such as Airbnb.

Many cities in other states have already either banned short-term leasing or added inspection and permit fees. While Indianapolis has taken a less restrictive approach, Carmel issued a warning to residents Tuesday that listing homes on Airbnb is violating city zoning ordinances.

Rep. Matt Lehman, R-Berne, said the bill wouldn't take away control from local governments. He said he is trying to find the balance between the rights of Indiana residents to use their property as they please and protecting home rule.

"This is an attempt to thread that needle," he said. "We want to allow this emerging technology to continue."

Airbnb is a global home-sharing network that allows people to temporarily rent homes, apartments or rooms.

According to the bill, cities and towns in the state could still impose laws regulating public safety and sanitation as long as "enforcement does not prohibit the use of a property as a short term rental." The bill allows homeowners associations to have limits on rental units.

The House Government and Regulatory Reform Committee added an amendment that would require a $1 million liability insurance policy for such rentals. The coverage could be a separate policy or an endorsement or rider to the traditional homeowners' policy.

Katie Maddox of the Indiana Restaurant & Lodging Association said she supports the insurance amendment but is concerned about the bill overall. She said the group supports property owners' rights to occasionally rent space, but said some are doing it year-round and "basically running illegal hotels out of their houses."

The committee could vote on the bill as early as next week.