With tourism continuing to hit record highs, Indianapolis residents have become increasingly concerned over the prominence of short-term rentals and the noise and chaos they can bring to neighborhoods. Now, the city wants to intervene.
A proposal to create a short-term rental registry and permit process will make its way to the City-County Council after clearing a vote earlier this week in the Metropolitan and Economic Development Committee.
Short-term rentals are defined as private residences that can be booked for fewer than 30 days at a time. Rentals often consist of entire homes or apartments but can also be an individual room or floor of a larger residence occupied by a host.
Under the ordinance, short-term rental hosts who advertise their units on sites like Airbnb or VRBO would have to pay a one-time $150 fee to register the property and acquire a permit. Property owners with multiple rental units in one building would have to register each unit individually.
Under state statute, the city would be able to revoke a permit after three violations to the ordinance. If a property owner's permit were to be revoked, they would be allowed to reapply the following year.
"It's not about taking rights away," said Councilor Kristin Jones, sponsor of the proposal whose district includes parts of the near south and west sides of the city. "Many, many of these Airbnbs are owned by out of state, non-existent landlords who don't respond, and this is simply about providing a registry and a permitting process."
In 2023, which has many rentals of visitors in town for the Indianapolis 500 and other races, created a similar registry with a $150 permit fee. That registry largely influenced Indianapolis' proposal.
More than a dozen people spoke to the committee on Monday, ranging from concerned neighbors who have witnessed violent crime at nearby rentals to local hosts who earn a steady income from renting their properties.
Two years ago, in response to increased concern about violence at rentals, neighbors in Fountain Square launched the Coalition to Address Short-Term Rentals (CASTR). One of the coalition's first steps involved creating an online form for residents to report disorderly conduct at properties across Marion County, said Dakota Pawlicki, a coalition cofounder.
Over the span of 18 months, the coalition received 137 reports from residents regarding concerns over partying, safety and parking. Just 26 rental properties comprised 70% of the complaints, Pawlicki said Monday.
"The data confirmed that we had a problem and confirmed another hunch we had which is while there are many responsible local owners and operators of short-term rentals, the majority of these problems are actually coming from a handful of bad actors," said Pawlicki, who also serves as president of the Fountain Square Neighborhood Association.
Several local rental hosts expressed support for the proposal while asking for further clarification to protect their income. Matt Swickheimer, an Indianapolis-based flight attendant who lives in the old Southside neighborhood, said he rents out his primary residence while he is traveling and collects a third of his income from short-term renters.
"Protecting me as a homeowner and protecting my investment in my neighborhood is important to me, but I totally propose that this proposal should be voted for and I'm in favor of it because of the bad players that have been involved," Swickheimer said.
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The proposal will appear before the council during one of the city’s busiest years for tourism, as single one-off events have created huge surges for short-term residences and hotel rooms. Taylor Swift’s long-awaited stop in November resulted in a 7,000% increase in nearby rental searches.
Airbnb, the world's largest short-term rental booking site, says that large parties at its sites are "rare," with 0.035% of reservations globally resulting in a report of a party in 2023. According to a company report, Airbnb enforces technology and restrictions to deter "disruptive parties" on holiday weekends like Memorial Day Weekend and Fourth of July.
Attempts in 2017 by Carmel officials to ban short-term rentals sparked fierce debate in the General Assembly. Legislators ultimately passed a bill banning cities from prohibiting short-term rentals.
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The Indianapolis proposal passed the city committee 11-1 and will go before the full council for a vote next month. If passed, a registry would be created at the beginning of 2025.
Alysa Guffey covers growth and development for the Indianapolis Star. Know a business opening or closing? Contact her at amguffey@gannett.com.
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