Short-term rental inspections bill passes Senate panel, with changes

By: - February 10, 2023 6:30 am

A view of the Indiana Statehouse on Feb. 1, 2022. (Leslie Bonilla Muñiz/Indiana Capital Chronicle)

A Senate committee on Thursday unanimously passed a stripped-down bill letting local units of government charge short-term rental owners $25 annual inspection fees.

Sen. Mike Young, R-Indianapolis. (Courtesy Indiana Senate Republicans)

“There are good [short-term rentals] and bad ones — just like in every other aspect of life,” author Sen. Mike Young, R-Indianapolis, told the Senate Local Government Committee.

“… If [units] don’t have a smoke alarm, they don’t have a carbon monoxide alarm, if the wiring’s bad, the water is not working — that’s all health and safety,” Young added. He said people should be able to stay in safe facilities while visiting communities within Indiana.

The bill was originally more detailed before an amendment.

It would’ve blocked short-term rental owners from claiming homestead property tax credits on properties in which they don’t live full-time. It also would’ve barred owners from launching new short-term rentals within 400 feet of schools and specified that local code enforcement employees should inspect the properties for sanitation, safety and essential services.

Committee members approved the amended bill 10-0.

Long-term residents worry — and want more

Several Hoosiers living in historic Indianapolis neighborhoods spoke in support of Senate Bill 461, with hopes it could help preserve their tight-knit communities. Some were also concerned about related noise, trash, parking and public safety problems.

Airbnb is one of the most common short-term rental platforms along with VRBO.

“The Valley neighborhood has become ground zero for forces that, if left unchecked, have the potential to do great harm, by changing the very nature and fabric of our neighborhood,” Jay Napoleon of The Valley Neighborhood Association told lawmakers.

The neighborhood is experiencing significant redevelopment: Elanco Animal Health is remaking a long-abandoned General Motors site into its world headquarters, the zoo and White River State Park are expanding and the city is putting in a new bridge.

But with those “exciting” possibilities, Napoleon said, come more short-term rental units and fewer neighbors.

“My neighborhood is in danger of becoming a neighborhood of transient actors, a neighborhood of guests without any real connection to the people around them,” he said.

But most residents urged the General Assembly to go further than Senate Bill 461 in cracking down on short-term rentals.

Tom Abeel, volunteer president of the Historic Urban Neighborhoods of Indianapolis coalition, said he wanted legislation letting local units of government create mandatory short-term rental registries. He also suggested establishing maximum occupancies, guest parking requirements, fines for excessive noise and enforcement mechanisms.

Others pushed back against House Enrolled Act 1035, passed in 2018, which blocked municipalities from banning short-term rentals.

“It has pretty essentially exempted certain parts of the marketplace from accountability. And residents are paying the price for that,” said Kelly de Waal of Indianapolis’ Herron Morton Place neighborhood. “And we think this will be a long-term, long-range effort … to maximize benefits and reduce challenges.”

Owners want to weed out “bad” landlords

Several short-term rental owners also spoke in measured support of the bill, which they said could help improve relationships with long-term residents. Some had even formed a group, the Indiana Short-Term Rental Alliance, toward that goal.

“We’re just getting organized because we [also] want to root out the bad hosts, because they make us look really bad,” said Elizabeth Sickels, who leads a short-term rental consultancy and is an alliance member.

“We want to work with everybody to make things better for our neighbors all around Indianapolis and still be able to host guests and have them have a great time in our city,” Sickels added.


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Leslie Bonilla Muñiz
Leslie Bonilla Muñiz

Leslie joins the Indiana Capital Chronicle after covering city government and urban affairs for the Indianapolis Business Journal for more than a year. She graduated from Northwestern University in March 2021, and has reported for the Chicago Tribune, Voice of America and student publications in Evanston, Illinois, Washington, D.C., and Doha, Qatar.