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MIBOR opposes Carmel's short-term rental restriction

January 20, 2017

Opposition to the city of Carmel’s plan to restrict short-term housing rentals is growing.

The MIBOR Realtor Association announced Friday that it “strongly opposes” the letters Carmel sent earlier this week notifying Airbnb hosts that they are in violation of city zoning laws and demanding they cease operations within 10 days or request a zoning variance.

“Short term rentals provide an opportunity for communities to showcase their neighborhoods, promote tourism and generate revenue in the community,” MIBOR’s statement read. “Short term rentals have become a great option for consumers and are a very popular alternative for some travelers who prefer something other than the traditional hotel accommodations.”

The city said the action was in response to complaints from local residents, homeowner associations and hotels.

Properties within residential zoning areas are only allowed to be used for housing, not businesses like hotels or bed-and-breakfasts, unless a variance is granted by the city.

“Your home is an area that is classified as a residential single-family zone, which means you are welcome to use your home as a residence,” the letter Carmel mailed to 28 residents said. “But you are not able to suddenly turn it into a restaurant, a dry-cleaning business, factory or—as is apparently the case now—a hotel or bed-and-breakfast. Doing so would be unfair to your neighbors and to our local businesses, and would be contrary to the community’s zoning laws.”

MIBOR argues that the action places “unnecessary zoning and legal variance requirements upon private property owners who wish to offer their property for short-term rental.”

“Rental restrictions infringe upon private property rights, limiting a homeowner’s ability to reasonably use their property in a way that does not negatively impact neighbors,” MIBOR’s statement read. “Concerns about noise, crowds, disorderly and disruptive tenants, traffic and parking are simply unrealistic fears. Comparing a short term rental to a business such as a dry cleaner or factory is also unrealistic.”

The Realtor association, which represents 7,500 members in 12 counties, said the 10 day window to remove listings was “an unreasonable time frame.”

Carmel Mayor Jim Brainard said requiring Airbnb hosts to go through the same process as other home businesses would allow for input from neighbors.

“MIBOR appears to be arguing that one should be able to start a home business in a residential area and be able to cut off the voice and opinions of neighbors who have made their biggest investments in their homes,” Brainard said in a written statement.

Brainard said the city isn’t imposing any new restrictions, but rather enforcing existing zoning laws.

"To say that there is no impact on neighbors is to discount the many complaints the city has received by citizens and homeowners associations who have a justifiable concern that a single family residential home could become a rental home with an absentee owner who may not take care of the home and therefore potentially drive down the property values of the homes in the neighborhood,” Brainard said.

In Indianapolis and the surrounding suburbs, hundreds of homes and bedrooms are listed on Airbnb and other peer-to-peer lodging sites. Most communities, including Indianapolis, have simply deferred taking action to regulate the business. At least one—Lebanon—has publicly supported the service.

According to data released in December from Airbnb, approximately 83,000 people used the service statewide in 2016, generating a total of $10.6 million in income for hosts. Carmel was ranked the fifth busiest community in the state for guest arrivals, with 1,900 overnight visitors using Airbnb. The business generated a total of $239,000 for hosts in Carmel.

The top four cities were Indianapolis, South Bend, Bloomington and Michigan City, respectively.

A bill filed earlier this week by Rep. Matt Lehman, R-Berne, could prohibit cities and towns in Indiana from banning short-term rentals.

Lehman said the bill isn’t aimed at taking control away from local governments, but finding a balance between the rights of Indiana homeowners and protecting home rule.

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.

The committee could vote on the bill next week.

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