Mark Fisher: Rental caps would limit opportunities for homeowners

Indiana Realtors are advocates for a fair and inclusive housing market, protecting the rights of current property owners while supporting Hoosiers who are still on the journey to buying a home. We have a saying: “Good renters become good homeowners.”

Affordability challenges have made the journey longer than ever for many young and moderate-income families, as the average age of first-time buyers hovers near historic highs. The last thing we need are more government-enforced controls on housing supply that would make things even worse.

That’s why we oppose proposed rental caps in Fishers, where median home prices and rents are already among the highest in the state.

Overruling private property rights with arbitrary caps on rental properties won’t help Fishers continue to grow. It will widen the gap between housing supply and demand and worsen affordability in a community where 42% of renter households are already cost-burdened.

Specifically, the Fishers proposal limits single-family rentals to 10% of homes in any single subdivision. Mayor Scott Fadness and other proponents say it’s tailored to address an epidemic of out-of-state investors buying up single-family properties. But the policy takes a sledgehammer approach to a scalpel-size issue, catching individual landlords, local investors and mom-and-pop property managers in the same net.

And imagine being a homeowner in one of the subdivisions singled out by the city’s public registry of areas at or near the 10% cap. You’re ready to sell; perhaps your family is growing or it’s time to downsize and leverage your equity for retirement. But your home lingers on the market while nearly identical houses nearby sell faster and for higher asking prices. After all, buyers can avoid a layer of regulation and skirt government-sanctioned innuendo about rentals by looking one or two streets over—you pay the price.

And who are the direct casualties? Young families who would rather lease a home than an apartment, perhaps, or recent college graduates wanting to stay close to family as they save for a down payment. Certainly they include employees of Fishers-area businesses who want to cut their commutes.

It’s hard to understand why Fishers wouldn’t welcome these new residents who contribute to the community. And it’s also difficult to see why local officials are so concerned about “oversaturation” of single-family rentals once we look at the facts.

Fishers has a laudable 77% homeownership rate, consistent with the rest of Hamilton County and well above Indiana’s rate of 70%. Less than 9% of Fishers’ single-family homes are renter-occupied, within a percentage point of Hamilton County (8%) and well below the metro (14%) and state (13%) levels.

Analyzing county-level residential sales disclosures, we find that investors and wholesalers purchased roughly 4% of homes in Hamilton County in 2023. Even if numbers are slightly higher in Fishers, they clearly didn’t push the county anywhere close to the metropolitan rate of 14% in the year when peaking mortgage rates would favor investors the most.

In short, we believe a single-family rental cap creates more problems than solutions. We agree that homeownership is an essential ingredient for strong and thriving communities—but ask any Realtor, and you’ll likely hear that encouraging new housing development is the best way to protect and expand homeownership.

Again, the numbers speak for themselves: Out of nearly 1,500 homes listed for sale over the last 12 months in the 46037 and 46038 ZIP codes, just 25 were priced below $250,000. This is the market dynamic that shuts out homebuyers and attracts cash investors.

Increasing housing supply improves affordability and access without heavy-handed regulation. Realtors are ready and eager to stand with Fadness on new programs helping first-time and moderate-income homebuyers—but must oppose policies that erode property rights, threaten hard-earned equity and diminish rather than defend homeownership opportunities.•

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Fisher is CEO of the Indiana Association of Realtors.