Carmel will follow in the footsteps of Fishers by implementing a plan to regulate the number of single-family rental houses in the city.
Members of the Carmel City Council voted 9-0 on Monday night 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. Fishers approved a similar ordinance in April after about 2-1/2 years of planning.
“The city of Fishers has been working on this for over two years, and while we have begun talking with our neighbors and their technology partners about what they have learned and how we might move our process forward with the passage of this ordinance, we will still have much undertake,” Mayor Sue Finkam said.
As in Fishers, Carmel’s 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%.
Carmel’s plan will grandfather existing rental properties as of Dec. 31 and take effect Jan. 1, 2026.
Landlords who do not register a rental house with the Carmel Department of Community Services by Dec. 31 will be subject to a $500 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 are 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; owners who are active members of the military; an owner who has experienced a death in the family, a 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.
Councilor Rich Taylor said the ordinance is an important step to maintaining a balance between single-family houses that are owned versus rented.
“This is an issue for many neighborhoods who either don’t have HOA protection or have so many rental single-family properties in their neighborhood that they’re not able to update or change their [conditions, covenants and restrictions],” Taylor said.
Councilor Anita Joshi said that while the ordinance will place a cap on rental properties, it will not be a quick fix for subdivisions that currently have more than 10% rentals.
“Those neighborhoods that are already over the 10% are going to take years, potentially, to recover from that, and it will take time for this to happen,” Joshi said. “So, people who are excited about passing this need to also understand that there’s going to be some patience required. You’re not necessarily going to see the change overnight.”
Councilor Adam Aasen also said the city will need to remain flexible and potentially make changes as the city works to put the ordinance into practice.
“We are building the railroad track as the train is moving, which kind of gives me a little bit of heartburn, but I have the utmost faith in our city staff to come up with a great plan to implement this,” Aasen said. “And I know that we’ll be patient and give time to collect the data and come up with a good process with this.”
Six residents spoke during a public comment period at the start of Monday night’s meeting with five expressing support for the rental restrictions and one resident who said he is against the move.
After the vote, the MIBOR Realtor Association released a statement saying the organization sees the ordinance as “a serious misstep with far-reaching consequences for the community.”
“Following the flawed example recently set by the City of Fishers, MIBOR is troubled by Carmel’s decision and stands in firm opposition to its implications,” MIBOR’s statement said. “This action was taken without adequate consideration, sufficient data, or analysis to understand its long-term impact and represents a troubling step backward for housing policy in central Indiana.”
During this year’s legislative session, lawmakers sought a last-minute amendment to House Bill 1389 that would have prevented local governments from instituting rental caps. The amendment was scrapped, but legislation against rental caps could return next year.
Copyright © 2025 All Rights Reserved.