Fishers passes rental home cap, while Carmel introduces its own

Fishers became the first city in Indiana on Monday to approve a plan to cap the percentage of single-family rental houses in the community’s subdivisions and create a registration program for landlords.

Meanwhile, Carmel could follow its Hamilton County neighbor’s footsteps after its City Council heard an introduction of a similar ordinance to create a rental registry and cap. But an amendment to a bill at the Indiana Statehouse could throw both cities’ efforts into question.

The Fishers City Council voted 9-0 to approve the ordinance following a 35-minute public hearing session.

The ordinance passed the same day that last-minute language was added to House Bill 1389, which would limit local governments’ ability to restrict vehicle and outdoor equipment sales, to also prevent local governments from instituting rental caps. State lawmakers from both the House and Senate will need to approve the language during the legislative session, which is set to end this week.

Mayor Scott Fadness said the vote on Fishers’ ordinance came 2-1/2 years after city officials began exploring a plan after institutional investors began purchasing more and more single-family houses throughout the city and turning them into rentals.

“It’s one thing to build a great city. It’s quite another thing to maintain a great city that’s not just a snapshot in time, but it lives on, today, tomorrow, 10 years, 20 years, 30 years in the future,” Fadness said. “I think that it’s incumbent upon us as elected officials to think about it from that framework. What are we doing to ensure the long-term sustainability of our city?”

The ordinance will require landlords to register rental houses and receive a permit that would remain valid until the owner decides to sell the property. The plan limits the percentage of single-family rental units per subdivision to 10%.

Houses that are registered as rentals before Dec. 31 will be grandfathered into the plan and will not be subject to the 10% cap until they are sold to a new owner, who will be required to register the home. An application will be denied if a subdivision has reached the 10% limit.

Landlords who do not register a rental house by Dec. 31 will be subject to a $250 fine. Operating a rental house without a permit will result in a $1,000 fine for the first violation and fines ranging from $5,000 and $7,500 for subsequent violations.

Exemptions will include people renting a house to family members or legal dependents, people renting out a house due to a job relocation, people who are on military deployments and people who are renting out a house because selling it would cause undue burden.

The ordinance will go into effect Jan. 1, 2026.

Fourteen residents and members of organizations spoke at Monday night’s meeting, and more people were in line to speak when City Council President Pete Peterson ended the public hearing. The speakers and other people in the full house at Fishers Municipal Center were generally split between those for and against the ordinance.

Some residents said their neighborhoods have deteriorated over the years as more houses have been purchased by companies that have put them up for rent.

According to the city, single-family rentals account for at least 10% of the total houses in 50 subdivisions across the city. In some subdivisions, such as Brooks Chase and Brookston Place on the city’s east side, the percentage of single-family rentals reaches 30% to 40%. City leaders say almost half of the single-family rentals in Fishers are owned by out-of-state landlords and 25% are owned by institutional investors.

“Over time, I’ve watched the feel and fabric of the neighborhood slowly begin to unravel. Today, over 25% of the homes in Royalwood are rentals,” Fishers resident Jennifer Brammer said. “Many of them, not all, but too many are not being maintained the way they should be.”

Other residents said they do not agree with the idea that the city should be able to put a regulation on if they can rent out their house or not.

“I’m not saying I disagree with you. I feel like there’s a middle point,” Fishers resident Marti Brown said. “I don’t feel like people in New York with suits on can come in and buy our properties. But I also don’t feel like you can tell me that as an American citizen who has paid for 11 years on my mortgage that I can’t rent [out my house. It] is absolutely the thing that is most non-American.”

Most Fishers City Council members explained why they supported the ordinance. Several said the city can adjust the ordinance if problems are found as the officials begin rolling out the new regulations.

The MIBOR Realtor Association previously voiced opposition to the proposal over concerns that it would restrict property rights, limit housing options in Fishers and interfere with the free market. The Indiana Association of Realtors also opposed the ordinance, while OneZone, the joint chamber of commerce in Carmel and Fishers, expressed support for the rental cap and registry system.

“I want to make this very clear. All investors are not bad actors. Virtually all renters are not bad,” Councilor Todd Zimmerman said. “This is not to speak against Realtors. This is not to speak against MIBOR. This is not to speak against those investors that are in the community. That’s not what this is about. This is about a much larger issue that some point we’ve got to do something, and I feel like the time is right to do that.”

Next in Carmel

Members of the Carmel City Council also heard an introduction of a similar plan to create a rental registry and cap rental units per subdivision or the city as a whole at 10%.

The Carmel ordinance would also grandfather existing rental properties as of Dec. 31 and take effect Jan. 1, 2026.

“We’ll hear people, a lot of people, saying that this isn’t a big problem. What are you trying to do?” Councilor Adam Aasen said. “Well, if we waited for everything to become big problems before we dealt with them, we’d be too late.”

Under the current proposal, landlords who do not register a rental house by Dec. 31 would be subject to a $250 fine. Operating a rental house without a permit would result in an initial $2,500 fine. If the landlord failed to get a permit after 30 days, the owner would be fined $100 per day that the house goes without a permit.

Exceptions to the ordinance would be short-term rentals; when homeowners rent out their houses when they will be away from the city for up to six months and plan to return; work relocations; active members of the military; someone who has experienced a death in the family, divorce or was transferred to assisted living; renting to immediate family members; when a house was inherited following a family member’s death; and if the house is listed for sale on the multiple listing service.

City Council members voted unanimously to send Carmel’s rental ordinance to the city’s Finance, Utilities and Rules Committee for further study.