When a Carmel woman rented her home to young adults on a shortterm basis, loud parties ensued with cars lining the street.
Douglas Haney, corporation counsel for the city of Carmel, compared the situation to “without overemphasizing it, scenes out of ‘Animal House.’” The city is pursuing an ordinance to have its Board of Zoning Appeals regulate, but not ban, short-term rentals such as those offered through the Airbnb or vacation rental by owner services.
Similarly, a legislative interim study committee is examining government restrictions on short-term rentals. The issue arose last session through an unsuccessful bill that would have barred local governments from banning short-term rentals. The bill arose after Carmel began to ban short-term housing rentals.
Houston-based Airbnb often makes presentations to cities about zoning laws and stresses “fair, common- sense regulations,” said Laura Spanjian, public policy director for the company.
“We’re very supportive of regulation. Of course, we don’t want to see our business banned,” Spanjian said.
Airbnb has 4 million rental listings in 65,000 cities worldwide, Spanjian said. There are only three countries in the world without Airbnb, she said. Indiana has 3,100 host sites, including 40 in Carmel and 1,200 in Indianapolis, Spanjian said.
However, some rental owners have been unaware that they must pay taxes on the rentals. Depending on the community, Hoosier bed and breakfasts must pay retail or innkeeper’s tax, among others. Airbnb has entered into agreements with nearly 300 jurisdictions to pay those taxes for the owners. Airbnb is attempting to work with Indiana on a tax-paying proposal, she said.
To that end, Lisa Smith, who operates the Nestle Inn bed and breakfast in Indianapolis, asked for equity among lodging facilities. She pays retail and innkeepers’ taxes among other fees.
“Airbnb calls their platform the ‘sharing economy,’” she said. “The actuality is that Airbnb hosts who are listed and not regulated to pay taxes really don’t share with anyone.”
The Interim Study Committee on Commerce and Economic Development is to make a recommendation for legislation, said chair Sen. Mark Messmer, R-Jasper. “To protect the rights of the person’s private property, that’s my first and foremost concern of whatever else we do,” Messmer said.
“Airbnb technology is here to stay. I’ve used it. I’ve used the technology. I love it.
"When I travel, it’s very convenient but I know there’s some concerns in the local government world that the commercialization of rental property doesn’t explode in their communities. I get that. I’m sensitive to that,” Messmer added.
A handful of Indiana cities have looked at zoning controls.
For one, Lafayette had finished a revitalization project and encountered two homes that had become troublesome short-term rentals. Neighbors complained to city hall, said Mayor Tony Roswarski.
The city passed an ordinance that created three distinctions for “transient” rentals, including the prohibition of short-term rentals in districts zoned for single-family homes. Short-term rentals are allowed in that district if the property receives approval from a panel of five residents.
Short-term rentals have been in existence for decades but are now being driven by consumer demand and online convenience, said Matt Kiesling, vice president of short-term rental policy for the Travel Technology Association.
He said that bans on short-term rentals could hurt local tourism economies.
“It doesn’t seem like the most logical step to put all that travel and tourism economy in front of a [board of zoning appeals] that has to make an educated decision on what should be happening with short-term rentals,” Kiesling said.