Carmel revisiting short-term rental laws


The City of Carmel is considering new laws to regulate short-term rentals that officials hope will preempt future action by state legislators regarding the issue.

Toward the end of 2016, the City of Carmel began to publicly address how it would deal with short-term rentals in residential properties, such as users of the Web site Airbnb.

Carmel officials said they would crack down on Airbnb hosts operating within city limits, claiming that these homes were zoned for residential use and that businesses should not be operated out of a home without being properly zoned or applying for a variance.

Around the same time, some members of the Indiana State Legislature filed legislation to prohibit municipalities from restricting Airbnb hosts. That legislation never received a vote.

Now, the City of Carmel is considering new laws to regulate short-term rentals that officials hope will preempt any future action by state legislators.

“I fully support Carmel locking this down as tight as we have to,” City Councilor Jeff Worrell said.

The Carmel Plan Commission is considering amendments to the city’s unified development ordinance that would require approval for most short-term rentals. At some point, the Carmel City Council is expected to review and vote on the changes to zoning laws.

The amendments include:

— Creation of a special exemption that would allow homeowners to pay a $100 application fee and undergo a review from a Board of Zoning Appeals hearing officer.

— Some short-term rentals would be allowed by right in business districts but could only be a special exemption in residential districts. This means houses in Midtown or the Carmel Arts & Design District would be likely allowed to operate as an Airbnb more easily than those in a housing subdivision.

— Special exemptions would only apply for permanent residents of a house to prevent someone from buying a house for it to be solely used on Airbnb or other short-term rental sites.

— The mayor would have authority to suspend the provisions for up to 30 days a year for big events where hotel rooms might be full, such as the Indianapolis 500, NCAA Final Four, PGA golf tournaments or major conventions.

City Councilor Ron Carter said he expects discussion about how many days a year an Airbnb would be allowed to operate so it’s not a 24/7 business venture.

“I certainly think that citizens inside neighborhoods have the right to expect that there won’t be a commercial business operating directly next door,” he said.

Worrell said Airbnb hosts should be happy that the city is finding a way to legalize the practice instead of banning it outright.

“It’s a compromise,” he said. “I’m always looking for a win-win scenario.”

The city council will hold a public hearing on the proposed ordinance at 6 p.m. Jan. 8.

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