City of Carmel could consider ordinance regulating Airbnb rentals

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In January, the City of Carmel announced it would be crack down on Airbnb hosts operating within city limits. A letter was sent to the users of the short-term rental website that stated they must rezone their property as a commercial business or cease operations.

A bill recently failed in the Indiana General Assembly that would have prevented local governments from banning Airbnb. Carmel Mayor Jim Brainard said the bill’s sponsor has expressed an interest in reintroducing the bill next year, so Carmel might draft an ordinance to deal with Airbnb locally.

“We can then say to the sponsors of this legislation, ‘Look, we have a good local process already,’” he said.

Brainard said local officials should make their own decisions about how to deal with sites like Airbnb. Some rules are needed, he said, because it’s not fair to neighbors who should have a say about whether they live next to a regular Airbnb host.

“You could put your entire life savings into your home and wake up and find that the home next to you had been turned into a hotel with transient guests every night,” Brainard said.

Brainard said city officials will work with the Carmel City Council to draft legislation regulating Airbnb without banning it. Airbnb rentals are permitted in Carmel, but hosts must be  rezoned as a commercial business or apply for a zoning variance. Brainard said a variance is often more appropriate because it is limited to the particular owner and not the land itself.

Brainard said the new process hasn’t been finalized. The goal is to create a system where someone who wants to rent a room on Airbnb is able to do so without prohibitively high costs. At the same time, city officials and neighbors are able to weigh in on whether it’s a good idea for the area. Brainard said there might be an abbreviated process with lower fees. He said the idea is that would-be Airbnb hosts could go through the process without hiring an attorney.

Brainard said he’s stayed in an Airbnb rental before on his travels and enjoys them. He said they can be good for the city and a great way to attract out-of-town guests to who spend money at local businesses, but he stressed the need for a management system. He said it’s one thing to have an occasional room for rent during big events like the Indianapolis 500, especially if the homeowner has spoken to neighbors and discussed parking. But most residents don’t want dozens of college students renting a house next door to party and make lots of noise.

“You still want to preserve the right for neighbors to come in and say no,” he said.

Some have suggested that homeowners associations can make their own rules about Airbnb hosts. Brainard said that can work in places, but some older neighborhoods don’t have such protections.

“That’s not the solution, to rely on a patchwork of HOA covenants,” he said.

Brainard said he’s open to listening to Airbnb hosts and users before drafting legislation,  but he wants to protect neighboring homeowners. He said every city will deal with the issue differently, which is why he opposed the state legislation.

“My point is that one size doesn’t fit all,” he said.

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